The global market for offshore wind projects is improving with governments and companies now offering high enough prices to make projects economically viable, the CEO of Portugal's largest utility Energias de Portugal (EDP) said on Tuesday.
Many countries are relying on a huge and rapid build-out of offshore wind farms to meet climate targets which have high upfront costs but over the longer term can provide cheaper energy than fossil fuel plants.
Spiralling costs amid high inflation saw developers cancel or pause projects in the U.S. and Britain last year that were no longer expected to be profitable leading to concerns over the long term outlook for the sector.
“We are seeing a major reset in prices for PPAs (power purchase agreements) and CfDs (government backed contracts) which are making projects viable,” EDP CEO Miguel Stillwell D’Andrade said in an interview at an energy event in Oxford.
EDP’s 50/50 offshore joint venture with ENGIE called Ocean Winds is involved in the development of several projects globally.
D’Andrade said fundamentally the offshore market is looking strong and that projects in the United States remain attractive, even if there could be a less climate-focused President in the country following elections later this year.
"The consensus seems to be the (IRA) Inflation Reduction Act has bipartisan support and a lot of the funding is going to Republican states," he said.
The U.S. faces an election this year and Republican candidate Donald Trump has threatened to axeDemocratic President Joe Biden's Inflation Reduction Act (IRA), which in 2022 set out a support package for clean technology worth $370 billion.
(Reuters - Reporting By Susanna Twidale; editing by Costas Pitas)