A Cluster Analysis of Investment Strategies in the Offshore Wind Energy Market

Ioannou, A., Vaienti, C., Angus, A. and Brennan, F. (2017) A Cluster Analysis of Investment Strategies in the Offshore Wind Energy Market. In: 6th International Conference on Clean Electrical Power (ICCEP), Santa Margherita Ligure, Italy, 27-29 June 2017, pp. 362-369. ISBN 9781509046836 (doi: 10.1109/ICCEP.2017.8004841)

Abstract

This paper maps different investor strategies in the offshore wind energy market based on data from existing wind farms in the UK. This is realized through the employment of cluster analysis, which classifies offshore wind energy investors - who have purchased equity stakes-in terms of the entry timing, exit timing, purchase timing and stake purchased. We, then, perform a SWOT analysis to identify the major strengths, weaknesses, opportunities and threats encountered by each cluster of stakeholders. Cluster analysis revealed the existence of three distinct investment strategy profiles: i) Late entry investors, ii) Pre-commissioning investors, and iii) Own-build-transfer investors. Corporate and institutional investors tend to be late entry investors, whose strategy is based on buying assets while they are fully operational avoiding construction risks, retaining a risk aversion profile. The exit timing of OEMs and EPCI contractors usually takes place before or right after the commissioning of the wind farm. Finally, major Utilities tend to keep the operating assets on their balance sheet and divest only part of them (mostly minority stakes) during the operating stage; Independent energy companies are found in both 2nd and 3rd cluster; however, exceptions may be observed.

• Item Type: Conference Proceedings
• Additional Information: This work was supported by grant EP/L016303/1 for Cranfield University, Centre for Doctoral Training in Renewable Energy Marine Structures (REMS) (http://www.rems-cdt.ac.uk/) from the UK Engineering and Physical Sciences Research Council (EPSRC).
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Ioannou, Dr Anastasia
• Authors: Ioannou, A., Vaienti, C., Angus, A., and Brennan, F.
• College/School: College of Science and Engineering > School of Engineering > Systems Power and Energy
• ISSN: 2474-9664
• ISBN: 9781509046836
• Copyright Holders: Copyright © 2017 IEEE
• First Published: First published in Proceedings of the 6th International Conference on Clean Electrical Power (ICCEP), 383-389
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher