Our offshore renewables investment lead discusses key trends to watch in 2022

Our Principal Consultant Thomas Carpenter sat down with A Word About Wind magazine as part of its Wind Investment Trends 2022 series.

In an in-depth, wide-ranging interview that explored the big opportunities and challenges for the industry post-pandemic, our offshore renewables investment and finance lead discussed:

  • Why candidates with skillsets across multiple renewables sectors will have an advantage in 2022 and beyond.
  • Why we’re expecting investment in wind power to grow globally this year.
  • The biggest opportunities for wind investors in 2022.
  • The macro trends that are seeing new market entrant portfolios rival legacy utilities.

Watch the full video here now, read the full report at A Word About Wind (subscribers only) and see below for an edited transcript.

 

Interview Transcript

A Word About Wind: Are there enough skilled people out there to deliver the energy transition?

Thomas Carpenter: The short answer is: at the moment, we’re in that transition. There are enough skilled people in the market overall, but the gap at the moment is that we don’t have everyone with the wind specialist skillset. To caveat that, I would say it’s excellent that we do have more people coming through the market – we’re starting to see more junior people coming into the wind sector and staying in the wind sector. We’ve already had our transition from oil and gas professionals moving over: there are still some people doing it, but that has happened in the last few years.

What we need to start looking at is that cohesive renewables technology: not just wind professionals dealing with wind assets, we’re starting to see more onshore people dealing with offshore, we’re seeing solar, storage, wind, offshore wind, and with the element of hydrogen coming in, that also means these things will have to work together, and people will have to have multiple skillsets. So we do have a shortage, but it doesn’t mean we aren’t able to access those candidates – we are able to find people with the right skillsets from different areas, and as the markets become more streamlined, we can cohesively bring them together, and they’re able to work in those similar roles, with the growth in the market.

AWAW: It seems like there are a huge number of opportunities out there for people who have the skills, and those that want to join the sector as well.

TC: Yes, and what’s good is that the fiscal part of the sector that wasn’t there five years ago – the market has responded. Whereas other markets typically hadn’t by the same point. It’s a good thing for employees – but it demonstrates that it’s a much more serious market than it was 10 years ago and that everyone now values that sustainability piece now. Everyone now knows that they have to be investing into the wind sector, or other renewable technologies: it’s the way the world’s going, and that’s now represented in the way that people are being paid in the market and the growth trajectory. Some of the biggest players and companies in the world are now offshore wind developers, or wind developers, or utilities.

AWAW: Do you expect the level of investment in wind globally to grow this year?

TC: Absolutely. We started off with a bang, with ScotWind – everybody thought we were going to get 10GW and it turned out to be 25GW. And that’s largely down to the continued growth of floating, and obviously it’s only five-to-10 years away before floating becomes more widely-seen. What’s fantastic about that is that Scotland has now driven that focus for the rest of the world to see, so it doesn’t all have to be about bottom-fixed – offshore wind can be deployed in a lot more areas where we see lower shipping, lower environmental impact, higher wind speeds. So it’s a very exciting time with floating wind and also with onshore: there’s so much scope now in other regions that we didn’t necessarily see before.

In the US, Asia, they’ve got so much land – in the UK there’s still scope, but because of our planning regulations, and we’re a small island, we don’t necessarily have the same scope as others in the onshore wind sector. But there’s so much more growth potential and land that can be used and because it has to be done, it’s definitely something that more people are putting time into. The other thing that’s just a simple fact is by 2030 there’s going to be 250GW+ of offshore wind: that requires huge capital and you’re going to start to see investments coming not just from your traditional investors – you’re going to see public and private spending, infrastructure funds, institutional capital, private equity, even large corporate conglomerates are looking into it as well. So there’s definitely going to be so much growth.

AWAW: Where do you see the biggest opportunities for wind investors in 2022?

TC: Floating, definitely, is going to be a fundamental part within offshore wind. That’s going to help in a lot of regions where you wouldn’t have thought offshore wind was an option. I also think bringing hydrogen and storage alongside these projects is going to help. If we can get the supply chain right and get it connected, there’s an element of profitability in these projects now that probably wasn’t there two or three years ago, especially with hydrogen. And yes, there’s a long way to go with that technology, but you can see all of the big players are going for hydrogen: those energy transition teams are focusing purely on hydrogen, looking at how it can benefit not just these projects, but it can add value to any energy or infrastructure project too. From a market standpoint, you’re looking at huge areas for offshore wind – the US is one, Asia-Pacific is obviously growing, and there’s better capability for near-shore wind there. But the other side is that Europe still has plenty of space to expand.

So yes, we are the most mature market, but we still have so many options – you’ve got portfolios that are probably quite old now and can be revamped and made better. There’s so much to go at, and that’s what makes it quite exciting. Then add the storage and hydrogen and it’s a whole different ballgame. So, there’s a lot of different opportunities on the offshore side, then on onshore, there’s so many countries with large space and high wind potential that are going to continue with onshore – the US and Latin America for example.

AWAW: What do you see as the biggest obstacles to greater investment in wind?

TC: I’d like to say “none” but because there’s been so much investment, prices are being driven up. Which means big utilities and developers are saying: “look, we’re not going to get involved in that, we’re going to stick with our portfolio, make that better and develop what we’ve got.” That will then mean prices will come back down, level out again, but from that side of things it’ll be making sure we don’t overpay and we’re not getting to a point where it makes it seem unprofitable again. Which it definitely isn’t. On the flipside of that – it’s not necessarily a negative, but some companies are trying to go too wide, too thin. What people need to do is make sure they have the right people that can help make sure they’re not spreading themselves too thin and they can stock up in the right areas. It’s not necessarily a bad thing to have too much, but just making sure you don’t have too much that means you don’t do anything, is the other obstacle.

AWAW: What are the other big trends we should be looking out for in the next year?

TC: On the macro-side, I think we’ll see a lot of investors from various forms coming into the market. Traditional utility developers will continue to play the long game, making sure they develop their pipeline and waiting to see when the market drops a little. But other large corporate investors who aren’t necessarily in the renewables sector will start seeing renewables projects as valuable assets – that’s going to come from private equity, debt funds, institutional capital – various different forms. The other thing I think is interesting is that because of the net zero targets that every company sets, we’re starting to see Amazon and Ikea building portfolios in the sector that you could argue rival some utilities. So it’s starting to see these big companies and forms of investments that you wouldn’t necessarily see in renewables – it’s going to be exciting to see who comes in. It’s quite hard to keep track of, but part of what we’re doing is keeping on top of those companies and letting them know we’re here to help with talent, networking, and stakeholders.

Interview has been edited for clarity and length.

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