Utrecht, 21 September 2015. Today a report was released which identifies the differences in subsidy schemes and tax regimes for offshore wind in France, Belgium, Denmark, Germany, the UK and the Netherlands. The design of the subsidy and tax schemes determines the attractiveness for investors as it can change the risk profile and, therefore the cost of capital and levelized cost of energy (LCoE).
The TKI Wind op Zee (Top consortium for Knowledge and Innovation Offshore Wind) commissioned PricewaterhouseCoopers (PWC) to conduct this study. The study has analysed two policy routes to make offshore wind projects more attractive to investors; through subsidies and/ or tax schemes. Both methods, if designed effectively, can reduce LCoE. Through risk shifting between public and private parties the cost of capital and LCoE can be optimised.
All subsidy and tax systems analyzed, have a low risk profile in general, as the feed-in tariffs and feed-in premiums are designed to ensure that investors obtain sufficient revenue. But there are differences in the schemes per country and those differences impact the risk level for investors.