Commenting on the government’s announcement that it has approved five offshore wind farm projects, Adrian Scholtz, head of renewables at KPMG said:
"The government's announcement to approve five offshore wind farms puts the UK back in the driving seat, ahead of Germany and France. The industry must now seize the opportunity to invest in the domestic supply chain, successfully demonstrate incremental cost reductions and therefore increase the return on each project."
Capital will have an essential role in delivering these cost reductions, however the challenge for firms will be managing its cost. Experience, capital recycling and risk allocation will all have a role to play in optimising the cost of this capital throughout these projects’ lives.
"In addition, we are seeing a growing pool of active and speculative attention paid to the sector by a range of capital providers. Given these industry drivers, we are confident that the resulting reduced lifecycle cost of capital will help reduce the cost of offshore wind - ultimately securing the industry's long term future beyond today's successes."
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KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.