Discussions aimed at securing the investment necessary to build the 288MW Butendiek offshore wind station in the German North Sea are ongoing, with developer WPD Offshore seeking to retain a 10% share in the project.
Speaking with Windpower Offshore, WPD Offshore managing director, Achim Berge, explained that the company hopes to create an "investment club of equals" to fund Butendiek, comprising perhaps five organisations. WPD needs to achieve financial close on Butendiek by the end of the year.
Several institutional investors withdrew from the project late last year and WPD is thought to be in discussions with a number of German regional energy companies about buying in. Other potential investors include large engineering companies, wind turbine manufacturers from China or Korea, as well as pension funds and private equity firms.
Butendiek remains the "best" and "lowest risk" offshore project currently being developed in German waters, argues Berge. Unlike offshore wind stations to be served by the HelWin 1 and BorWin 2 Cables, which are subject to significant delays, Butendiek will be linked to shore via the SylWin cable. Installation of SylWin is not delayed, says Berge, thanks in part to the attentiveness of Vattenfall, another developer within the SylWin cable cluster.
Another reason why Butendiek represents a lower-risk investment option compared to other German offshore wind projects is because WPD has a proven offshore wind track record, notes Berge. The company developed Baltic 1 through permitting as well as overseeing its procurement and construction. Baltic 1 is now owned by utility EnBW (Windpower Offshore 05-Jul-12).
For Butendiek, WPD will work with suppliers with which it already has strong relationships, such as Siemens and Ballast Nedam.
WPD also expects another of its German offshore wind projects, the 415MW Kaikas development, to move ahead this year, with a general building permit likely to be granted this autumn.
In France, WPD has a strong position. It holds a 30% stake in the 498MW Fécamp project and a 15% holding in 450MW Les Courselles (Windpower Offshore 11-Jun-12). In both cases, it has partnered with EDF and Dong, and is responsible for the permitting process and engagement with local stakeholders. With ten years' experience of developing onshore wind farms in France, WPD began to work on offshore options five years ago.
Berge says that WPD has three more potential projects in French waters, earmarked for the French energy ministry's second offshore wind tender, thought to be planned for late this year. WPD's partners for these projects have not yet been decided.
WPD also has preliminary development rights for two offshore wind farms in Scandinavia, one in Swedish and one in Finnish waters. The difficulty is that neither country has a financial incentive programme that supports development of offshore wind. Instead, Scandinavia's biggest energy sector players, such as Vattenfall and E.ON, are investing in offshore wind in the UK and Germany. WPD would like to see Sweden and Finland prioritise the development of domestic offshore generating capacity.
Other offshore wind projects in WPD's pipeline are Kriekers Flak III in Danish waters and one Italian project, Gargano Sud. As for the UK market, WPD was the runner-up amongst bidders for the Round 3 Hastings zone, losing out to E.ON (Windpower Offshore 02-Jul-12). Whether it will seek to enter the UK offshore market in future cannot be predicted, however, Berge notes that the "cost of entry" is very high.
Meanwhile, WPD is watching the American market, but is frustrated by the lack of a regional or national regulatory framework. Each US offshore wind project will be a one-off, says Berge, undermining its attractiveness to European developers seeking to build a portfolio of projects in particular countries.