Bloomberg News

BTM Cuts Offshore Wind Forecast on German Grid, Sweden Incentive

November 19, 2012

Global offshore wind turbine installations are expected to grow more slowly than previously expected because of grid delays in Germany and the price of wind power in Sweden, according to Navigant Consulting Inc.

Navigant’s BTM Consult ApS unit cut its cumulative forecast for the five years through to 2016 by 11.6 percent to 23.9 gigawatts of offshore turbines, the company said in an e-mailed report. The largest downgrade of 1,700 megawatts was in Germany.

“Germany has been downgraded despite a huge pipeline of offshore projects in German waters as there is concern in the wind industry over grid availability and grid delays,” Aris Karcanias, an analyst at BTM Consult, said by e-mail.

Developers of offshore wind including Dong Energy A/S and EnbW Energie Baden-Wuerttemberg AG suspended projects in Germany on a lack of grid connection agreements, hampering the nation’s goal to build 25 gigawatts of turbines by 2030. The German government endorsed draft legislation in August designed to end delays and provide investor security by making grid operators accountable for financial damage.

Those penalties and high upfront costs will impact future developments, Karcanias said. He also reduced his forecast because Sweden’s incentive program for offshore wind doesn’t deliver a power price “sufficiently attractive to lure investors” when the cost of cable connections paid for by the project owner in Sweden are factored in.

Europe Leads

BTM Consult also said the cost of some new European projects increased to more than 4 million euros ($5.1 million) a megawatt, “which is 1.5 times to more than double the cost of early large scale European and Chinese offshore projects.”

The costs, pushed up as turbines are built further from shore in deep water and more difficult conditions, will begin to fall as new technologies and installation methods are introduced, according to Karcanias.

Europe will lead in offshore turbines to 2016 with Asia accounting for 25 percent, BTM Consult said. It predicts China, the U.K. and Germany will be the three largest offshore wind markets by the end of 2021.

BTM Consult found 470 megawatts of new sea-based turbines were added in 2011 bringing the cumulative capacity to 3,987 megawatts. Vestas Wind Systems A/S and Siemens AG shared 86 percent of the total, followed by REpower Systems SE and Sinovel Wind Group Co., according to the research.

To contact the reporter responsible for this story: Sally Bakewell in London at

To contact the editor responsible for this story: Reed Landberg at

The Good Business Issue
blog comments powered by Disqus