A report launched by K2 Management and insurance broker, JLT Specialty has identified the key challenges and trends that will shape the future of onshore and offshore wind projects over the next twelve months.
Reducing The Levelised Cost of Energy: Challenges, trends and opportunities in today’s wind projects for tomorrow’s business cases’ reviewed data from sixty onshore and offshore projects throughout Europe and Latin America. The project clients varied from independent developers, state-owned utilities and private investors, giving a broad view of the challenges and opportunities facing the sector from a variety of different perspectives. The key findings from the report include:
- A quarter of wind projects are looking to extend the life of their project, potentially by a further five years.
- Developers are taking action to reduce their risk exposure on projects, with 60% of pre-construction offshore projects adopting five or less Engineering, Procurement, Construction and Installation (EPCI) contracts.
- A quarter of projects had underestimated the costs of operational expenditure, leading to concerns that this could have huge implications on performance and valuation of the project further down the line. Many of the projects that were surveyed had not yet reached the twenty-year lifetime, and so much of the project budgeting was based on educated assumptions.
