Offshore Wind Outlook Uncertain Amid Inflation and Rate Hikes
What happened
At a conference in Antwerp, DEME CEO Hugo Bouvy emphasized the need for continuous construction of wind farms and oil and gas projects, stating that the company needs to build its own factories and vessels to maintain a continuous flow of work. Separately, Westwood Global Energy Group senior analyst Peter Lloyd-Williams stated that the future of offshore wind looks uncertain, despite the sector holding a 56% share of offshore energy spending.
From maritimejournal.com
Why it matters
Lloyd-Williams attributed the uncertainty to rising inflation, interest rates, and demand for return on investment, which has led to forecasts being revised 40% down due to project and timeline slippage. While offshore energy CAPEX is projected to grow from $500 billion to $744 billion, developers are currently expanding existing projects rather than taking on new ones.
From maritimejournal.com
Who's involved
- DEMECEO spoke about the necessity of continuous construction for wind and gas projects.
- Jan De NulA contractor whose revenue could be threatened by project volume declines.
- ChinaA low-cost competitor that may increase market pressure on DEME.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Jan De NulSpeculative
Jan De Nul might face reduced contractor revenue due to the threats to project volume.
- ChinaSpeculative
China could increase market pressure on DEME regarding project costs.