Despite cost inflation, operators such as Ocean Winds and Sumitomo Corp could secure non-recourse debt primarily due to the $21bn InvestEU-EIB budgetary guarantee, which improves the project financing environment in the continent. Also, a recent EU amendment has simplified the permitting process for offshore wind projects and limited the approval period to two years, which reduces the investment risk.
Further, most key European markets witnessed a decline in power prices since the start of 2023, with the average monthly wholesale prices in France, Germany, and the UK falling to $125/MWh in Mar’23. This has incentivized off-takers to lock in long-term supply contracts, guaranteeing developers better tariffs compared to that of the recent CFD allocation rounds.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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