Record German lease payments significantly above anything seen before in offshore wind

The 7GW worth of #German leases awarded earlier this week were the most expensive to date, beating out both the New York Bight auction last year and UK Round 4 in 2021 by a significant margin.

TotalEnergies now holds the record for the most expensive offshore #lease purchase ever ($4,162.5mn for 2GW in Project Site N-12.1). The company was awarded one further lease, increasing its global portfolio by 45% on an equity share basis, while bp picked up the remaining two sites, growing its offshore wind pipeline by 58% on an equity share basis (including JVs).

Just under $14bn was committed across the four sites, with 10% to be paid up front and the balance over 20 years from commissioning. This is a substantial sum (equivalent to 60% of the #offshorewind EPC capex expected to be committed in western Europe FIDs in 2023).

Concerns have been raised about the profitability of both #projects and #supplychain given the record lease fees. It is worth noting, however, that, under the German system, export infrastructure is provided by the transmission system operator, so equivalent capex can essentially be offset by the developer against the lease fee.

Author: Peter Lloyd-Williams

Data is driven from Westwood's WindLogix, a highly intuitive market intelligence solution covering the global offshore wind and power sectors. Gain a holistic view of the market, from lease round activity and commercial trends to supply chain outlooks and component spend. For more information or to request a product demonstration, click here or contact sales@westwoodenergy.com.