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Essential Guide to Help Decide If You Should Buy or Build Your Way into the Wind Power Market
DUBLIN, Ireland-(Business Wire)-June 18, 2008 - Research and Markets http://www.researchandmarkets.com/research/101f95/wind_power_market has announced the addition of the "Wind Power Market Entry Strategies - Build Or Buy?" report to their offering.
Introduction
Proliferation of climate policies are instigating long-term wind strategies split between domestically-focused wind generators and firms applying global strategies to tap major growth opportunities. In the current context of soaring turbine prices, supply bottlenecks and record wind farm valuations, carefully crafted entry strategies are key to growing profitable and competitive wind portfolios.
Scope
Data concerning power generation costs for the five major renewable technologies and an awareness of associated subsidy systems across key markets Knowledge of the key factors governing wind power economics applied to generation costs and based on realistic onshore/offshore development costs Detailed insight into the cost, profitability and economic competitiveness of the three main onshore/offshore wind power market entry strategies A case study assessing the likely relative profitability of different onshore/offshore wind power market entry strategies in the UK and Germany.
Highlights
Today, wind is more competitive against fossil fuel than ever, despite higher turbine prices. The biggest price reduction of renewable technologies and learning curves are found in markets operating feed-in tariffs. This support system has delivered the most wind capacity, whereas quota and certificate mechanisms have largely underperformed Wind power projects are front-loaded and capital intensive, therefore hardware prices and financing standards and structures have a high degree of influence on the economics of wind farming. Wind power generation costs are also highly dependent on wind conditions, turbine load factor characteristics as well as operation and maintenance costs Onshore wind is profitable, provided that the four key parameters are optimized, with appropriate support mechanisms in place. Offshore wind, on the other hand, is a more high-risk high-reward business. Under the current market conditions, the most competitive portfolio is generally one that builds offshore but buys existing onshore wind capacity.
Reasons to Purchase
Understand how technical, financial, regulatory and legislative factors will impact the economics of your existing and/or future wind projects Evaluate the upsides and drawbacks, profitability profiles, and economic competitiveness of the main onshore/offshore wind market entry models Formulate and apply successful strategies to solidify existing portfolios and expand into new global markets to unlock further competitive advantages.
KEY ANALYSIS:
— The biggest price reduction of renewable technologies and learning curves are generated in markets operating feed-in tariffs.
— Wind is more competitive with fossil fuel than ever despite higher turbine prices pushing up the cost of wind generation.
— Feed-in tariffs have delivered the most wind capacity whereas quota and certificate mechanisms have underperformed.
— The pioneering work of successful feed-in systems has shaped the recent record growth in European installed wind capacity.
— Wind power generation costs depend on key financial and technology-specific factors.
— Wind power economics depend largely on four key sets of parameters.
— Wind farm projects, both new build and M&A, are front-loaded and capital intensive.
— Wind power generation economics are highly dependent on wind conditions and turbine load factor characteristics.
— The cost of capital, reflected in the discount or interest rate, has a high degree of influence on wind turbine development costs.
— Project lifetimes coupled with discount rate have a significant influence over the annual costs of wind power generation.
— O&M costs vary widely and can be uncertain, yet they represent a significant part of a turbines annual levelized generation cost.
— The most competitive portfolio is one that builds offshore but buys existing onshore wind capacity.
— In a market characterized by price increases and turbine scarcity, growing portfolios successfully calls for diligent entry strategies.
— Developing wind farms is gradually becoming a high risk high reward business.
— Onshore wind is profitable provided the four key parameters are optimized, with appropriate support mechanisms in place.
— On paper, offshore wind is high margin, however present concerns have injected high risk into offshore wind prospects.
— Acquiring onshore wind can deliver more value for money than new build development, but not at any cost.
— The high premium paid for the acquisition of offshore wind farms often makes the overall investment less attractive than new build.
— Despite recent escalating wind power generation prices, wind power has never been more competitive against thermal power.
— A case study of UK and German wind power markets reveals that the subsidy price alone is not sufficient to drive market entry strategies.
— The UK quota and certificate mechanism does not optimize wind investment structures, nor does planning permission limitations.
— Planning permission difficulties and a generous support scheme makes buying existing UK onshore wind more appealing than ever.
— UK offshore wind development costs have soared over the past few years, making the economics of such projects marginal at best.
— In Germany, proposed amendments to the Renewable Energy Sources Act (EEG) will drive further innovation and investment.
APPENDIX
— Definitions
— Ask the analyst
— Our consulting
— Disclaimer
For more information visit http://www.researchandmarkets.com/research/101f95/wind_power_market
Source: Datamonitor
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