Closed

Floating Offshore Wind - Project Finance (Lot 1) and Insurance (Lot 2)

Offshore Renewable Energy Catapult · £90,000 · closes 1 Nov 2021

£90,000

Estimated value

Closed

Deadline

1 Oct 2021

Published

Awarded

FTI Consulting LLP£89.6k · to 6 February 2023

Renewable Risk Advisers Ltd£89.6k · to 6 February 2023

Awarded 2 February 2022

This tender has closed.

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About this contract

This project investigates two separate but connected themes that affect the levelised cost of energy (LCOE) of FOW projects: bankability and insurability. Both are impacted by perceived risk, but impact project costs in different ways. The first large scale (>500MW) UK FOW projects are expected to use long-term debt to finance a substantial proportion of the project. This is one of the drivers of the anticipated rapid cost reduction in FOW LCOE at the end of the 2020s and early 2030s. However, to enable this low cost of capital we need to ensure the finance community understand FOW projects, technologies, risks and opportunities. This project is aimed at understanding the current views and proposed approach of the finance community to investing in FOW projects, what the industry can do to address any concerns, and raise the profile of the investment opportunities in FOW. At the same time, insurance premiums for offshore wind farms have been rising sharply in recent years driven by a range of factors. One of the key factors is an increase in claims in certain areas, and hence increased risk / exposure of insurance companies to such claims. All of these areas are directly relevant to FOW, and in some areas the risk profile in FOW may be perceived to be even higher - for example, cable technology. In addition, FOW projects include a number of novel components which shall be critical to performance and integrity of the project - for example, mooring and anchoring systems. In these areas there is a lack of information regarding technology reliability and risk in the context of their application to FOW. This project is aimed at understanding the current views and proposed approach of the insurance community to insuring FOW projects, what the industry can do to address any concerns, and what opportunities there might be for alternative / more appropriate insurance structures to be used within the industry to provide adequate insurance most cost effectively. To access the tender documents please register as a supplier on ProContract and search for Project DN573419.