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Estimates of the cost of developing offshore wind power have risen to around EUR 2.23 million per megawatt installed, reported Vestas' Bo Mørup last month at the Offshore Wind 2007 event in Berlin. The higher cost is down to increasing prices for steel, lead, and copper as well as for vessels, transportation, and warranty provisions on components. Turbine manufacturers, too, are reflecting higher values for warranties and contingencies in their prices, he said.

"We now have a better understanding of risk and we have a higher risk aversion," continued Mørup. "And we also want to make money." Vestas, he said, has been subsidising the offshore sector of the wind industry. But it is in the long term interests of the industry that turbine suppliers and sub-contractors are allowed to turn a profit.

Hermann Albers from the German wind energy association Bundesverband Windenergie (BWE) agreed. The industry has to stress to governments that offshore costs are rising and that offshore wind will be more expensive than originally forecast. Germany has lost four important years in offshore wind deployment because of the delay in introducing higher purchase prices for wind power, he said. "We need to tell the world that it is acceptable to make money in wind energy."

Banks are showing themselves increasingly ready to finance construction and operation of offshore projects, said Jerome Guillet of Dexia Crédit Local, a bank. One of the biggest changes in construction financing over recent years, he said, is the move away from the engineer, procure and construct approach, where the developer transfers all major risks to one turnkey contractor. Banks are now willing to take multi-contractor risk, but will need confirmation that budgets and schedules are realistic and well managed, he said. Dexia is participating in the financing of the C-Power consortium's offshore project off Zeebrugge, Belgium, and is keen to do more in the sector. "We think the risks are less than they have been in the onshore sector in recent months," said Guillet.

From law firm Watson, Farley & Williams, Evan Stergoulis noted that recent experience shows that even new 5 MW turbine technology -- such as the Multibrid, now owned by French company Areva -- is bankable. These days it is even possible to get financing for advance orders for turbines. "Banks are also looking to see how creative they can be to finance reservation agreements," he said. These agreements with the main wind turbine suppliers are becoming a pre-requisite to procuring turbines for offshore projects, but even so, they cannot be viewed as a guarantee of delivery, he said.