Almost 40% of pre-FID offshore wind projects are risky, Westwood says

Almost 40% of the offshore wind projects that are expected to reach a final investment decision (FID) by the end of the decade are potentially at risk, says energy market research firm Westwood Global Energy Group.

The London-based consultancy says in a new white paper associated with a Project Certainty feature developed for WindLogix that there are USD 353 billion in pre-FID projects potentially at risk.

In total, Westwood estimates the entire pipeline of pre-sanctioned projects at 380 GW of total capacity and USD 883 billion in combined value. Of this capacity, only about 9% is seen as “Probable”, while 51% is deemed “Possible” and 40% is “Risked”.

“Offshore wind market uncertainty is rife. Growing diversity of developers in the marketplace, combined with evolving development and commercialisation approaches has created a complex landscape. This is compounded further by the diversification of the investor landscape, with oil and gas majors, public investment funds, and even fashion houses entering the sector. However, despite this uncertainty, there is significant opportunity ahead to be capitalised on, but we must first understand the risk,” said Bahzad Ayoub, Senior Analyst – Offshore Wind, Westwood.

The market research firm says it came up with three scenarios leveraging project certainty statuses to calculate the total capacity of offshore wind projects that could have FID by 2030. The High scenario reaches 504 GW, while the Medium and Low scenarios reach over 351 GW and 157 GW, respectively. Across all three, Europe is the dominant region as it is expected to account for 208 GW, of which, however, less than half (47%) is “Possible”.

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