How will wind farms be financed?

New investors are now able to join a multi-billion-pound programme to help Britain meet its climate change targets.

It is part of the finalised system for regulating the undersea networks and infrastructure that will carry power from offshore wind farms – and has been put together by the Department of Energy and Climate Change, as well as Ofgem.

Successful bidders will be entitled to take part in the regime, with licences to build and operate offshore networks being subject to competitive offers.

"This approach is expected to rein in the costs of providing this crucial infrastructure," stated Ofgem. "[It] will deliver vital contributions to GB's drive to meet climate change targets and provide secure energy supplies while bringing value for money to consumers."

Meanwhile in the US, treasury secretary Tim Geithner and energy secretary Steven Chu announced $502 million (£307 million) as awards for clean energy projects.

Secretary Chu commented: "The initiative will help double our renewable energy capacity over the next few years and make sure America leads the world in creating the clean energy economy of the future."

Last month, UK private equity firm Terra Firma invested $350 million in Everpower - a company that develops wind farms – in what was its first American takeover.
The Finacial Times noted: "The … investment shows how private equity groups are turning to smaller, more innovative deals to cope with the lack of bank financing."

Lars Erik Maurud, Member of PA's Management Team and wind expert comments: "One observation we have made about the players entering the UK-bidding for offshore-projects is the sharp decline in the project-finance (off-balance sheet) models opening a great playing field for the big state-owned Nordics (Vattenfall, Statkraft, Statoil and DONG)".

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