The global pipeline of offshore wind projects stands at an all-time high, and the industry's biggest players command an increasing share of that portfolio.
“The growing 261-gigawatt offshore wind portfolio is a clear testament to the prospects of offshore wind across the globe,” said Søren Lassen, offshore wind analyst at Wood Mackenzie and author of a new report on offshore wind asset ownership, development and transactions.
“The big are going to get bigger,” Lassen added.
With growth and industry consolidation as the backdrop, there are several trends shaping the global picture for project development and ownership, Lassen said.
To start, leading European players are pursuing higher returns by breaking into emerging markets, defined by WoodMac as those without a commercial-scale offshore wind project installed.
Second, the pool of offshore wind investors is expanding and diversifying.
Finally, WoodMac highlights the rise of alliances among offshore companies and the growing importance of bidding consortiums in tenders.
The push beyond Europe
Ambitious European companies are looking to emerging markets for partnerships and acquisitions to position themselves for future growth.
Consequently, analysts recorded a spike in offshore asset transactions in 2018. Out of the 19.5 gigawatts' worth of projects that changed hands last year, 60 percent came from emerging markets such as the U.S., Taiwan, Poland and Ireland.
Emerging markets with maturing regulatory frameworks are the most appealing, though activity can begin well before the regulatory ink dries on the page.
Offshore wind developers are demonstrating a willingness to invest a significant amount of money to break into new markets, both by acquiring pipelines and companies, as with Ørsted’s acquisition of U.S. offshore wind company Deepwater Wind.
China remains largely exempt from the increasingly globalized nature of the offshore wind market.
While European players dominate the global industry, only one European company has secured a pipeline in China, where state-owned companies have a corner on the country's huge 84-gigawatt pipeline.
The size of China's emerging market is such that three out of the five largest offshore wind development portfolios in the world are now controlled by Chinese companies.
As emerging markets open to investment, the pool of offshore wind investors is diversifying. Institutional investors, Asian conglomerates and oil and gas majors are increasingly flocking to offshore assets as they gain a better understanding of construction and development risks.
This trend is also apparent in recent U.S. lease auctions, where Shell and Equinor have secured capacity in two of the past three auctions.
The final trend to watch is the rise of tenders and the related growth of alliances and bidding consortiums.
As more markets shift toward tenders and competiive auctions, bidding consortiums are becoming increasingly common. Almost 90 percent of companies participating in tenders in 2019 are expected to participate through consortiums.
Moreover, alliances are increasingly being used by developers to break into or fortify their position in new markets — in 2018 alone, 15 alliances were formed.
For more data and analysis of offshore wind ownership, access the full report and report brochure here.