Bridging the green energy funding gap: strategies for progress
RENEWABLES
Overcoming hurdles in wind, solar, and geothermal development
OIL AND GAS
The role of a robust project pipeline in powering energy transition and innovation
Energy transition stalled: Financing roadblocks derail global progress
6 View from the top Jon Dobson, Chief Financial Officer, Flotation
10 News and events Updates from EIC
12 Perspective EIC Head of External Affairs
Rebecca Groundwater on shifting policies and supply chain concerns
14 The big question
Where would members invest their green finance for net zero?
16 The big question
What do developers need to progress projects to final investment decision faster?
18 Special report
Tom Wadlow on how to make green energy projects bankable
34 My business
Layla Rocha, Sales Support Analyst, NEUMAN & ESSER
ENERGY TRANSITION
OIL AND GAS
RENEWABLES
Bertling – where excellent operational performance speaks for itself. Stay informed about your carbon footprint and take proactive measures to reduce and offset emissions with our comprehensive transport tracking solution. Join us today on our Road to Zero!
Visit www.bertling.com/sustainability to find out more.
From the Chief Executive: Our upcoming Bankable Energies event will bring together investors, developers, policymakers and the supply chain to help unblock the renewable and energy transition project pipeline
This edition of Energy Focus looks at net-zero bankability in two forms. First, we proudly announce the launch of a major new C-level event, Bankable Energies, organised by EIC. Taking place in London on 26-27 February 2025, the event will bring together policymakers, developers, financiers and members of the supply chain.
Second, we feature data, insights, articles and interviews that address the causes of poor energy transition-related project bankability, and how to unlock opportunities to enable net zero to move from policy ambition to industrial reality.
The energy landscape remains turbulent. The recent COP29 conference in Baku, Azerbaijan surprised everyone when the host opened with “Oil and gas are a gift from God”, and most commentators believe the event did not deliver any significant contributions to advancing the energy transition. In the US, anticipating aggressive climate-critical policies from incoming president Donald Trump, developers are postponing major renewable investments for four years, and fear the Inflation Reduction Act will be scrapped. And in Western Europe, which is becoming reluctantly but increasingly dependent on lower-cost net-zero supply chains in Asia, major developers are saying that they will adopt Chinese technology to unlock offshore wind developments that would otherwise not be bankable.
GE Vernova’s recent decision to halt its search for new offshore wind turbine orders is evidence of the China effect. According to Scott Strazik, GE Vernova CEO and our ‘View from the Top’ interviewee in last quarter’s edition of Energy Focus, the freeze was motivated by the economic challenges currently faced by the wind energy sector. It’s timely, then, that in this edition’s ‘View from the Top’ we welcome Jon Dobson, CFO of Flotation Energy, to discuss the future of floating offshore wind developments.
All is not doom and gloom, though: renewable and energy transition projects are still being announced and reaching final investment decision (FID) – just not fast enough, and not at big enough scale to hit the rapidly approaching interim net-zero deadlines.
Notably, on the back of aggressive net-zero pledges from the UK’s newly elected Labour government, two long-awaited UK cluster projects were licenced on 11 December 2024. Equinor, alongside its project partners, announced financial close after taking FID and progressing to the execution phase on two of the UK’s first carbon capture and storage projects: the Northern Endurance Partnership (NEP) and Net Zero Teesside Power (NZT Power), both on Teesside.
We are at a pivotal moment for net zero. As stated, the deadlines are approaching fast, and while we are all accountable for whether they are achieved or not, those most accountable are the policymakers.
Bankability is key, which is why the Bankable Energies event is so important and timely. It will bring the global investment community, major project developers and policymakers – including European Commission officials – together with our supply chain members. We will learn from the projects that have reached FID and address strategically critical projects that are stuck, to help them move forward.
Why Bankable Energies? For the good of the planet, yes, but also to enable all stakeholders to play their valuable part, profitably, in the stories told in the future.
Stuart Broadley Chief Executive Officer, Energy Industries Council stuart.broadley @the-eic.com
View from the top
Jon Dobson Chief Financial Officer at Flotation Energy
We are moving into an interesting period for floating wind, where test and demonstration sites are now being developed in parallel with commercialscale sites
Jon Dobson
Jon Dobson talks to Energy Focus about Flotation Energy’s journey, tackling offshore wind challenges, and ensuring bankability for floating projects
Flotation Energy was founded in 2018. What have been its main milestones?
Flotation Energy was developed by the same founders who spearheaded the Kincardine floating wind project, which started producing power in 2018 and is still the world’s largest grid-connected wind farm. Flotation Energy, a separate venture, was created to deliver more pioneering offshore wind projects around the world.
In 2019 we started ornithological studies on sites around the UK. By the end of 2020 we had begun active development of sites in UK, Australia and Taiwan. And in early 2021 we were part of a joint venture that successfully bid for a 480MW site in Offshore Wind Leasing Round 4, Morecambe, and secured outline approval for a 100MW floating project in the Celtic Sea, White Cross.
In the autumn of 2021 we achieved ISO 9001, 14001 and 45001 status, validating our expertise and knowhow. This demonstrated our commitment and experience in project execution and commercial deliverability of offshore wind projects.
In November 2022, Flotation Energy became part of the TEPCO Group, Japan’s largest utility company and the fifth largest in the world. This means we can draw on TEPCO’s global utilities technology and experience in delivering our long-term vision to be the leading force in offshore wind. Also in 2022, we formed a joint venture (JV) with Vårgrønn and successfully applied for two sites in the North Sea, Green Volt and CENOS, with a total capacity of 1,910MW of floating wind generation.
Our JV partnership with Vårgrønn has seen us develop our Green Volt project though all consents, as well as being awarded a government Contract for Difference in Allocation Round 6 in 2024. These are huge milestones, with Green Volt on track to be Europe’s first commercial-scale floating project and one of the largest in the world. On our Morecambe development, in a first-of-its-kind project, we are collaborating with bp and EnBW to share a cable corridor for our transmission assets. This was application was accepted in November 2024, and our Development Consent Order for the project was formally accepted in June 2024.
What are your plans for the near future, in terms of growth, innovation, scale-up and strategy?
The business has grown from seven people in 2018 to more than 200 in 2024. We work closely with TEPCO colleagues and share technical expertise to progress our global portfolio and achieve further growth. In the UK, with our JV partners, our projects include:
Morecambe, a 480MW fixed bottom wind farm 30km off the Lancashire coast
White Cross, a 100MW floating offshore test and demonstration (T&D) site 52km off the North Devon coast
Green Volt, a 560MW floating offshore wind farm, decarbonising existing North Sea oil and gas sites
Cenos, a 1,350MW floating offshore wind farm, decarbonising up to eight North Sea oil and gas platforms.
Our long-term strategy includes a global pipeline of prospects that our early opportunities team is maturing at pace. One of our strengths is our deep understanding of the offshore wind market; we are adept at identifying the right sites and locations, and understanding where we can add value to create commercial advantage.
What are the major lessons learnt from the Kincardine Offshore Wind Farm that Flotation Energy can apply to future projects?
Flotation Energy is not part of the Kincardine project, but many of the team involved at the beginning of that project now work for Flotation Energy, including our founders – so we have great technical and commercial understanding of how to deliver floating wind. Numerous technical and logistical challenges had to be overcome, which is typical in any burgeoning industry. Some lessons you only learn once; with others, such as technology development and implementation, it can be trial and error until it sticks.
Kincardine’s recent success, with the delivery of the first major component replacement delivered in situ on any floating structure, is something the industry will be keen to replicate and finesse.
About Jon Dobson
Jon Dobson is a qualified chartered accountant with more than 20 years’ experience in the renewable energy sector. After training as an auditor, Mr Dobson moved into project finance and spent six years in infrastructure advisory teams at PKF and Grant Thornton. In 2010, he founded a financial advisory consultancy and supported developers to fund, construct, operate, refinance and sell renewable energy projects. He joined Flotation Energy in 2021 as Chief Financial Officer with responsibility for commercial, accounting and financing activities.
Jon Dobson: From
Big ambitions for offshore wind From
Flotation Energy:
Driving the energy transition
A 13GW global pipeline
A robust pipeline of fixed and floating offshore wind developments with a capacity of 13GW worldwide
Decarbonising UK oil and gas
Electrifying participating UK oil and gas platforms through innovative floating wind solutions to significantly reduce emissions
Cutting CO2 emissions
Four UK frontrunner projects will mitigate around 4m tonnes of CO 2 a year
Economic growth
Green Volt and Cenos, with partner Vårgrønn, will deliver up to 8,300 jobs during construction and several hundred more over the 35-year operation of the wind farms
From a financial perspective, attracting UK-based investment in a niche industry is a challenge. Kincardine had a lot of inward investment and was partly self-funded by shareholders and JV partners. Proving deliverability at Kincardine has opened up more domestic and international interest in floating wind and helped secure commercial confidence.
The floating industry has since developed more T&D sites, and with those sites comes more knowledge and understanding. There is much more engagement with the investor community, and the industry can now derisk projects further by proving demonstrable evidence and results through T&D sites.
Amid market volatility and economic uncertainties, how does Flotation Energy mitigate risks to make projects more appealing to investors?
The challenges in both fixed and floating offshore wind are well documented, including rising commodity prices, supply chain and port infrastructure bottlenecks and interest rate increases. Flotation Energy is fortunate that wind projects, specifically floating wind, are in our DNA. As such, we believe we are well positioned to use our know-how to identify and mitigate risk, and ultimately deliver reliable best-value projects with a predictable return on investment.
How significant are the effects of supply chain constraints on projects’ financial feasibility, and how do you navigate this challenge?
The challenge that supply chain constraints represent cannot be underestimated; it affects both the financial and technical feasibility of offshore wind projects. There is no single strategy that will act as a magic bullet to solve all these challenges. From our perspective, it is about collaboration, good planning and trying to be consistent in the messaging on demand to our supply chain. We also have a responsibility to engage with the supply chain to help it understand the challenges we envisage and encourage it to develop cost-effective products and services that represent best value solutions. This will help us overcome these challenges and ultimately enhance the value of our projects and the wider industry.
What innovative financing mechanisms or partnerships has Flotation Energy explored to enhance the bankability of its projects? Engagement and collaboration are key. We are moving into an interesting period for floating wind, with T&D sites now being developed in parallel with commercial-scale sites. Some ask why there is still a need for T&D. We believe T&D sites support long-term technological and digital improvements, and can prove technology readiness at a lower risk level than commercial sites that are or will soon be operational. They also stimulate and test the supply chain and infrastructure in specific geographical areas. We need to see more support and investment in our UK T&D sites, as these developments catalyse commercial-scale projects further down the line. If these are not financially viable or become non-investible, the floating industry will suffer.
With Green Volt, developed in partnership with Vårgrønn, we’re delivering the first commercial scale project in Europe, if not the world. Given that we are at the cutting edge of delivering floating offshore wind at this size and scale, we are keen to engage with financial institutions to discuss the challenges and share how we are deploying our know-how to support the wider supply chain. Our aim is to continue identifying, mitigating and ultimately reducing risk for our portfolio, and ensuring these projects are reliable and bankable.
How does the pace of investment in renewables compare to oil, gas and nuclear? Investment in renewables has accelerated immensely. It’s estimated that global energy investment exceeded US$3tn in 2024, with US$2tn attributed to green energy. However, the oil and gas sector has traditionally been relatively unaffected by higher interest rates because of its low gearing. Renewables and nuclear power are more exposed to interest rates because of their high capital intensity. It may be that the recent rise in interest rates have a greater effect on the cost of debt for renewables than for traditional energy companies. However, I suspect we will see financial institutions looking to increase their exposure to the interesting
Jon Dobson
pipeline of offshore wind projects during the next decade.
With the new Labour government, are you hearing the right messages from policymakers and seeing the right funding models to meet your strategic goals?
There seems to be strong positive rhetoric around the development of offshore wind projects, which can only be good for the industry. In the UK, the yearly consistency of Allocation Round timings and the Contracts for Difference process have been great tools to facilitate more predictable revenue models, which has helped in investment discussions.
There is also a lot more engagement on the evolution and refinement of these funding models. The new Clean Industry Bonus scheme has been announced and we are interested to see how it works for Allocation Round 7. That being said, consenting processes are still a risk to project delivery, and generation and transmission asset consent needs to be
progressed in conjunction and parallel with upgrades to the grid infrastructure.
What is your view on Great British Energy, and what would you like it to become and to achieve in the future?
It intrigues me – I think they are still in the process of defining the detail and I am excited to see how it develops. I hope they provide a route to finance for new gateway offshore wind projects that will encourage private sector investment.
What do you want to see from the new National Wealth Fund?
The National Wealth Fund builds on the success of the former UK Infrastructure Bank and is a positive move. We have seen strong examples of the National Wealth Fund and the Scottish National Investment Bank coming together to provide a joint credit facility to support the development of the Ardersier port as an energy transition facility for the offshore wind industry. There are other examples of this sort of positive infrastructure financing, but port development, especially in disadvantaged areas of the UK, will enable more local economic opportunity and create muchneeded capacity for the industry.
renewable projects, but investment and security is key to facilitate the transition from oil and gas and other traditional energy industries into renewables.
What is the key to unlocking bankability for floating offshore wind projects?
We are on a journey, and it is incumbent on us to help the financial sector understand the risks identified and mitigations in place, so it is comfortable that we are bringing reliable projects with a predictable return on investment to market.
With global net-zero targets in mind, how optimistic are you about bridging the current disconnect between ambition and investment in renewables?
It is a challenge, but one that we are excited about. We believe the offshore wind industry has a significant part to play in achieving global net zero targets. However, by engaging with investment institutions and supply chain, we can bridge the gaps in technical understanding for investors and inform the development of best-value products and services to enhance reliability and ensure predictable returns.
Collaboration, good planning, and consistency in messaging are crucial to overcoming supply chain constraints
Is the UK an easy place to do business in?
Yes, the UK is generally considered an easy place to do business. Our engineering capability is globally renowned and we have a ready-made energy-focused supply chain that is ready to support
Your company is attending and speaking at EIC’s new flagship event Bankable Energies – what are you hoping the event will achieve?
It is about fostering further engagement and alignment. We are keen to hear what ‘bankable’ means to attendees, as I suspect there will be recurring themes but also some interesting differences.
(Right) A turbine at Kincardine Floating Offshore Wind Farm
news&events
Upcoming events in 2025
Bankable Energies
Date: 26–27 February 2025
Location: London, UK
About the EIC
Established in 1943, the EIC is the leading trade association for companies working in the global energy industries.
Our member companies, who supply goods and services across the oil and gas, power, nuclear and renewables sectors, have the experience and expertise that operators and contractors require. As a not-for-profit organisation with offices in key international locations, the EIC’s role is to help members maximise commercial opportunities worldwide.
Events
EIC LIVE events
EIC looks ahead to an exciting lineup of events for 2025! We are thrilled to introduce a new conference, Bankable Energies, as a pivotal platform to unite the global energy and investment community in discussions to drive net-zero action. But that’s not all – EIC Connect Energy series is expanding to new destinations, including Borneo, where we will continue to foster valuable connections. Our trade delegation schedule is growing, too, with visits to Namibia and South Africa.
Remember, this is just a preview!
Explore all our events, from major conferences to insightful webinars, on our full calendar: the-eic.com/events/calendar
Why attend? Bankable Energies is EIC’s major new event, bringing together the global investment community, leading project developers and policymakers to address the global shift to drive investment and accelerate energy transition projects.
With insights from EICDataStream revealing that the current pace of final investment decisions in renewable and emerging energy markets falls short of the necessary trajectory for achieving global net zero, this event will focus on strategies to bridge the gap.
Join us as we explore solutions to unlock investment for future
Kuching, Malaysia, located on the banks of the Sarawak River in northwestern Borneo
and regulatory considerations required to accelerate new energy initiatives, and highlight the strategies for managing risk associated with future projects.
Do not miss this opportunity to engage with industry leaders on the frontlines of the energy transition and contribute to shaping the future of sustainable investment.
For more information or to register for Bankable Energies, please visit the-eic.com/Events/ BankableEnergies/Home
EIC Connect Energy Borneo
Date: 25–26 February 2025
Location: Kuching, Malaysia
Why attend? EIC Connect Energy is heading to Borneo in 2025. True to its name, this event focuses on building connections and exploring the energy landscape from a broader perspective. Attendees will engage in insightful discussions, share valuable lessons, navigate potential challenges and discover synergies. With a strong emphasis on opportunities,
brings together investors, developers, original equipment manufacturers and the entire supply chain to shape the future of energy.
If you are interested in attending or would like to know more about EIC Connect Energy Borneo, please visit the-eic.com/ EventDetail/dateid/4352
Trade delegation to Namibia and South Africa
Date: 31 March–4 April 2025
Location: Namibia and South Africa
Why attend? Our upcoming trade delegation, organised in partnership with Aberdeen International Associates, is set to visit Namibia and South Africa.
Delegates will engage in organised group meetings with key local players, attend insightful briefings led by experienced in-market speakers, and connect directly with local companies.
The programme also offers invaluable networking opportunities to build meaningful connections in these dynamic markets.
If you would like to join the delegation, please visit the-eic.com/Events/ OverseasDelegations/ TradeDelegationtoNamibia SouthAfrica2025
Reports
EIC Country Report: Kingdom of Saudi Arabia
NEW REPORTS OUT NOW
Saudi Arabia’s energy sector is a mix of conventional resources and innovative transformation efforts, solidifying its status as a global oil and gas leader. Despite advances in other energy sources, oil and gas continue to play a crucial role in the country’s economy and are expected to remain significant. One of the world’s leading producers and exporters of petroleum, holding the second-largest proven crude oil reserves after Venezuela, the country’s vast reserve base cements its important position in the international oil market. As a result, its upstream sector is projected to have the highest estimated total investment value within the oil and gas sector. Newly discovered fields are set to enhance production capabilities. Aramco, the world’s leading daily oil producer, aims to increase its gas production by 50% by 2030, with Jafurah, its largest gas field, projected to reach a production capacity of 2bn cubic feet per day by 2030.
EIC Insight Report: Middle East OPEX
The Middle East’s energy landscape is undergoing a transformation, with growth in renewable projects alongside upgrades to traditional energy infrastructure. Solar capacity tripled between 2020 and 2023 and wind power has doubled, driven by initiatives such as Saudi Arabia’s National Transformation Plan. At the same time, carbon capture and hydrogen projects are advancing. Saudi Arabia opened its second carbon capture facility in 2023, and nations such as Oman and Qatar are accelerating hydrogen development with new policies and projects. However, oil and gas still dominate the region: several new production fields and expansion projects went online in 2023, and the region faces decisions on whether to modernise or decommission ageing assets in traditional energy sectors.
EIC Insight Report: Net Zero Jeopardy II
We are excited to announce the release of the second Net Zero Jeopardy report in 2025. As with the Survive & Thrive report, EIC members have been interviewed to gather insights on the gap between policy aspirations and industrial reality in the energy transition. Stay tuned for a comprehensive exploration of the state of play!
To find out how to access these reports and other market intelligence publications from EIC, please visit the-eic.com/MediaCentre/Publications/Reports
UK energy supply chain AT RISK
Supply chain concerns mount as shifting policies, taxes and project delays threaten the UK’s energy future, says EIC
Head of External Affairs
Rebecca
Groundwater
Iwas recently in Manchester, talking to a range of EIC members about policy, their needs, and the opportunities and risks in the energy industry. And yes, we touched on the budget.
The supply chain is not a homogenous entity; it is not all the same, nor can it be easily siloed or pigeonholed into different technologies, regions or capabilities.
EIC members are multifaceted yet straightforward, responsive yet steeped in a proud history, regional yet global. They are skilled, innovative and resilient. But we are pushing them to their limits.
In all the talk of the Energy Profits Levy and ‘just transition’, we lose sight of these companies –and that has never been clearer than it is today.
Tax burdens harm investment
The Energy Profits Levy is a tax on industry that the government was warned about and has ignored. Its effects will be felt down the supply
chain. Time and again, we have warned that, yes, a company may have its majority profits in oil and gas – but that is because there is not yet another energy technology sector in which to transition.
This is not for want of trying or desire. Lack of project certainty, continually changing policies and energy ministers, and uncertainty over what the UK energy sector looks like for investment, have all caused instability and unease.
Those directly affected by the Energy Profits Levy will reassess their North Sea investments and reconsider the value of remaining. Our supply chain does not yet have that luxury.
Rising costs threaten wages and jobs
There is also the cumulative effect of other taxes. An increase in national insurance contributions, along with a rise in the minimum wage, begs the question: what actually happens to wages? Where will this money be found in companies that are already
waiting for more projects to come their way? The money being raised from these measures will cost more in the long term.
The energy supply chain employs one in every 55 jobs in the UK – a vast number of people. And these people aren’t confined to clusters or belts; they are distributed throughout the UK, many of them outside the ‘energy regions’.
No clear transition path
Companies operating in oil and gas find it hard to transition to cleantech because of a lack of projects and lack of certainty that one project will lead to another –there is no visible work pipeline. And when work is anticipated, it faces delays and pushbacks; look at nuclear in the budget and the Track 2 carbon capture, utilisation and storage project announcement earlier this month. While the oil and gas industry was already on pause, we aren’t clear on a long-term, non-parliamentary energy roadmap.
What we have is a piecemeal approach, pilot projects and first projects. Companies can’t build a five-to-10-year business plan from that. Any work that actually arises from this is a ‘potential bonus’, not a ‘pay the bills’ energy strategy. This, coupled with the budget, has taken a fragile industry and plastered it with a ‘do not drop’ sticker – as the delivery man lobs it over the gate.
Lack of project certainty, continually changing policies and energy ministers, and uncertainty over what the UK energy sector looks like for investment, have all caused instability and unease
Budget ignores integrated industry needs
This was a budget that went beyond a ‘bad’ and a ‘good’ energy sector. The sector is integrated and, once again, this wasn’t taken into consideration: it is easier to point at the ‘big bad ones’ than the family-owned and operated, internationally trading companies that work across oil, gas and hydrogen, or oil, gas and nuclear. Such companies employ local apprentices and skilled workers, and conduct their business globally, beyond the UK.
An uncertain future for the UK energy sector
Our members are global; have we made the UK a more unattractive place in which to operate? And what does that mean for companies that want to be here but are finding it increasingly difficult?
Delayed projects, lower margins, higher costs, fewer operators, a
difficult sector in which to operate and no long-term strategy beyond the headlines – we are certainly not taking industry with us on the ‘net-zero journey’, regardless of what the intentions were.
The budget will now be discussed and debated, and we’re yet to see the devolved nations’ response – that will come shortly. But in the meantime, we need to secure those one in 55 roles, protect our SMEs and ensure the UK remains welcoming for the energy sector.
The potential is great and the ability is there, but politicians’ understanding and will does not seem to be in the same place.
Time for political accountability
Our members need certainty –they want to be in the UK. Let’s do better, let’s deliver on the Industrial Strategy, let’s stop targeting the wrong
areas and let’s engage more effectively. We will continue to build on our policy asks and increase engagement. We will make it clear that this budget hurts our members and that we are jeopardising our net-zero future. To engage with that, please contact me at Rebecca.
Groundwater@the-eic.com
The UK government has also put out a consultation on its plans for an Industrial Strategy. Unless it starts listening, our great supply chain’s capacity and capability might not be able to add to the coffers or deliver on net zero. However, by the time this realisation sets in, the current government may well be out of power, and we will have another set of net-zero targets and vision for what the UK energy landscape should look like.
Political cycles are all well and good, but not when we jeopardise our people, our expertise and our assets.
The BIG question
Where would you invest your green finance for net zero?
As the energy sector navigates the complexities of the net-zero transition, strategic investments are essential. But without sufficient subsidies, policies or market incentives, where would supply chain companies direct their green finance to achieve meaningful decarbonisation? Energy Focus puts the big question to three members
Tim Killen
Global Head of Growth – Project Sector at Fracht Group
When making strategic decisions about our approach to developing the global energy transition market, we face real challenges in terms of where to best invest our time, energy and resources. We must ensure an adequate return on investment for the short and long term, balanced with our sustainability, environmental, social and governance, and diversity objectives, to contribute to a sustainable, equitable and resilient energy transition journey. We need to adopt a multifaceted approach to our activities in the energy project space. The traditional energy landscape is mature in terms of its technology, investors and clients, with whom we have successfully worked for
We face real challenges in terms of where to best invest our time, energy and resources
many decades. While it is exciting and will be critical to achieving carbon net-zero targets, the energy transition market is in its developmental stages and faces several challenges and dependencies, including the need for government support to make projects economically viable, technology development and financial bottlenecks, policy and regulatory risks, and industry capacity and competence.
We are committed to supporting our existing clients in traditional energy markets, while investing to assist in the design and innovation of new supply chain and logistics solutions across all
aspects of energy transition technologies. To ensure a sustainable energy future, the pipeline for new energy projects, including hydrogen, carbon capture and sustainable aviation fuel, needs to gather momentum globally, so that we see final investment decisions on key projects achieved in the short term.
About Fracht Group
Fracht Group is a privately owned Swiss-based international freight forwarder and project logistics service provider, working on CAPEX and OPEX projects across all aspects of the energy industry. The organisation was founded in 1955 and remains independently owned, with more than 150 offices worldwide in more than 65 countries. Fracht Group moves high-value critical cargo by road, sea and air to support its clients’ logistics and supply chain requirements. Through a global network of dedicated personnel, long-standing experience and the latest information technology, Fracht Group delivers strategic and innovative solutions in every direction.
Riikka Paarma
Chief Sustainability Officer at Halton
At Halton, net zero is twofold. First, like any company, we need to ensure that we decarbonise our own operations. We have already made significant investments in solar PV, heat pumps and renewables across our locations, and we will continue to do so.
As part of our corporate and sustainability strategy, we are decoupling from increased material use by growing in services, which necessitates a growing service fleet. This includes investments in electric vehicle (EV) pilots, or hybrids as EV infrastructure remains immature across many of our key geographies.
Finally, for scope 3 upstream, the investment focuses on decarbonising our main supply: steel. Given that lower-carbon steel options are still in their early stages, we are prioritising cross-value chain pilots and cross-industry partnerships that will jointly boost demand for lower-carbon steel.
We are also committed to helping our customers tackle their own net-zero challenges, and so investments in net zero-aligned research and development and operations are front and centre, both strategically and for scalable impact. Our solutions are and will be needed to support a variety of net-zero technologies, from offshore wind to carbon capture. Moreover, our solutions typically improve our customers’ energy efficiency – a significant focus of COP28 last year.
Overall, we see tremendous opportunities in net zero, which is why we have recently opened a new factory in the US to support decarbonisation in the Americas while staying close to customers and minimising logistics emissions.
While uncertainties may prevail, we have a clear strategic direction. We are committed to continuously investing in our innovation capabilities and manufacturing capacity to ensure that we are ready to realise our potential in the net-zero revolution, together with our customers.
About Halton Halton Group specialises in sustainable indoor environment solutions, providing solutions for energy applications, public and commercial buildings and foodservice facilities. Founded in Finland in 1969, Halton now operates in over 35 countries around the world, with annual sales of €300m and more than 1,900 employees. It has production facilities in Brazil, Canada, China, France, Finland, Germany, Malaysia, the UK and the US.
Benoit Lamoussiere
Strategy & Sales Director at Ponticelli UK
We are decoupling from increased material use by growing in services
I would prioritise investments that deliver both immediate emission reductions and longterm strategic value, driving decarbonisation while supporting the UK’s net-zero goals and focus on homegrown energy. Upgrading the energy efficiency of existing oil and gas infrastructure is crucial if we are to reduce emissions significantly while maintaining operational viability. This will include adopting advanced energy management systems, cleaner fuels, or electrification to lower carbon footprints.
I would prioritise investments that deliver both immediate emission reductions and long-term strategic value
Supporting new offshore oil and gas licenses will be essential to maintain domestic energy security, but this must be done cleanly and efficiently to show the sector’s commitment to responsible energy production and shed its ‘dirty’ stigma.
Investing in renewable energy projects, particularly floating offshore wind (FLOW) and hydrogen, will be equally important. Expanding homegrown energy production through FLOW projects will be crucial in reducing our reliance on energy imports, and our engineering and construction expertise positions us to support this important growth.
Additionally, improving the UK’s grid capacity will be essential to accommodate new offshore projects and ensure renewables can be integrated efficiently, building a resilient, net-zero energy future.
Finally, I would advocate for technologies such as carbon capture, utilisation and storage as a means to prepare for long-term decarbonisation while ensuring the UK is energy independent.
About Ponticelli UK
Ponticelli UK delivers comprehensive engineering, construction and maintenance services across the oil and gas, petrochemical and renewable energy sectors. As part of the Ponticelli Group, with more than 100 years of experience and a global workforce, the company provides integrated solutions from design to decommissioning, ensuring seamless project execution. Committed to safety and sustainability, Ponticelli UK adopts a collaborative approach by forming integrated teams of industry specialists. This enables the delivery of efficient, cost-effective solutions that are tailored to clients’ specific needs, driving operational excellence and facilitating the transition to a low-carbon future.
The BIG question
What do you need for final investment decision?
What are the essential steps to secure a final investment decision for large-scale energy projects in an evolving market?
Energy Focus puts this big question to three experts driving the energy transition forward
William David Hartell
Managing Director and CEO of Stellae Energy
Stellae Energy is currently developing geothermal power projects across three volcanic island arc nations in the Western Tropical Pacific. Securing investment for renewable energy projects can pose significant challenges. Pre-financial investment decision (FID) funding is essential, as it typically involves early-stage equity investments, representing approximately 10% of the total project cost. Post-FID investment is typically structured as debt financing, which can require about 20% equity component.
One
of the critical steps in overcoming financing challenges is educating potential
investors
One of the critical steps in overcoming these financing challenges is educating potential investors about the renewable energy technologies involved. It is crucial to highlight that these technologies are well-proven, identifying risks and rigorous mitigations to sufficiently de-risk projects and the stage gate processes including independent assessments leading up to FID.
Renewable energy projects also require significant regulatory, legal and community approvals. Demonstrating proactive processes towards these
approvals is necessary to provide confidence that planned schedules and investments in the business case will be maintained.
By providing this information, Stellae Energy is working to build investor confidence and support for our projects, helping to secure the necessary funding and reach the FID stage, which is pivotal for project execution.
About Stellae Energy
Stellae Energy is a UK-based energy development company that provides end-to-end technical and business collaboration, advisory solutions and assets for emerging and established organisations in energy, mining and renewables (geothermal, solar PV, wind, batteries, hydrogen/ammonia, waste to energy, fuel cells, and carbon capture and
storage) sectors. These solutions and services include performance reviews, business transformation studies, digitalisation, conceptual frameworks, investment due diligence advisory, financing plans, exit strategies assistance, and project sanction and development stage gate support.
Gustavo Silva
Chief Operating Officer at Qair Brasil
Demand for clean energy is growing, and investments in major global energy projects are increasingly aligning with countries’ geopolitical and strategic priorities in order to drive the energy transition. This is reshaping energy markets around the world, resulting in larger-scale initiatives that require substantial investment and resilient infrastructure.
New niches and technologies are also emerging, creating opportunities for fresh entrants. As these new players join the field, there will be a growing need for pre-market agreements, stronger alignment with sustainability goals, and a business environment with a certain level of maturity.
To secure a FID, it is becoming essential to consider not only the business potential of the project but also the geopolitical landscape and the political and economic conditions in
which it will operate. Ensuring projects’ long-term viability will require access to financing solutions that can adapt to these evolving market dynamics and sustain projects throughout their lifecycle.
About Qair Brasil
Qair Brasil, the Brazilian subsidiary of independent French power producer Qair Group International, leverages over 30 years of experience in the renewable energy sector with operations in more than 20 countries. Its project portfolio includes more than 10GW in renewable energy initiatives, with nearly 500MW already in commercial operation and an additional 100MW currently under construction. In the next three years, Qair Brasil plans to invest US$484m in expanding its footprint. The company is now advancing through the pre-implementation phase for more than 420MW of solar power capacity.
Michael Alsford
Chief Financial Officer at Storegga
Ensuring the longterm viability of projects requires access to financing solutions
Progressing to FID for carbon capture and storage (CCS) and low-carbon hydrogen projects depends heavily on a number of factors, including sufficient financial incentives, a supportive regulatory framework and proactive government action. Uncertainty in any of these areas can delay investment decisions significantly.
Governments play a pivotal role by providing reliable support mechanisms such as clear funding structures, tax incentives and grants. For example, the UK government’s use of contracts for difference offers revenue support to low-carbon hydrogen producers,
Governments play a pivotal role by providing reliable support mechanisms
reducing customer offtake risk.
Banks can also play a crucial role by providing project-level financing, but securing investment can prove challenging for initial projects. The involvement of export-credit agencies and national infrastructure banks, such as the UK’s National Wealth Fund, could help to unlock this investment.
Regulatory clarity is equally essential. To mitigate risks and foster confidence, developers require well-defined rules on the business model, permitting process and liabilities exposure. Any uncertainty in these areas will increase investor caution and slow down decisionmaking.
Ultimately, consistent commitment from governments and coordinated infrastructure development will be critical. When the public and private sectors collaborate to create a stable environment with shared risks, projects are far more likely to progress to FID, enabling the scale up of the CCS and low-carbon hydrogen industries.
About Storegga
Storegga is a leading independent developer of CCS and hydrogen projects, dedicated to reducing global greenhouse gas emissions and driving sustainable energy solutions. With a diverse portfolio of pioneering initiatives, Storegga is at the forefront of advancing large-scale decarbonisation efforts. Its flagship projects include the Acorn CCS and Cromarty and Speyside hydrogen projects in the UK, Trudvang CCS in Norway, Penyu Basin CCS in Malaysia and Harvest Bend CCS in the United States. Storegga’s institutional shareholders include Macquarie, GIC, Mitsui, M&G, Snam and ADNOC.
Breaking the investment barrier: How to make green energy projects bankable
Despite urgent and intensifying net-zero targets, renewable energy projects face significant funding hurdles. EIC data reveals concerningly low investment rates, with only 5% of green energy projects reaching final investment decision. Tom Wadlow explores strategies to bridge this critical funding gap
The path to net-zero has become more complex amid growing energy security concerns and political uncertainty.
The election of Donald Trump in the US signals a potential shift in direction for one of the world’s largest economies, while the financial aftermath of the COVID-19 pandemic continues to cast a long shadow over green energy initiatives.
This uncertainty poses challenges for renewable and emerging energy projects, from established technologies such as onshore wind, offshore wind and hydropower to newer markets including hydrogen, carbon capture and storage and floating offshore wind.
And these challenges are further compounded by a significant financing gap that threatens to derail progress toward climate goals.
The scale is staggering. According to the International Energy Agency, global investment in renewables must more than triple by 2030 if we are to achieve net zero by 2050, reaching approximately US$4.5tn a year. Currently, clean energy investment stands at just US$1.8tn, with only one-third of this directed toward solar PV and wind projects.
EIC data also reveals a stark disconnect between global net-zero targets and actual project advancement. The global final investment decision (FID) rate for renewable and transition technologies languishes at around 5% or less, in sharp contrast to upstream oil and gas at 33% and large-scale nuclear energy at 44%. Perhaps most concerning is that only 5% of the US$2tn earmarked for global fixed offshore wind projects have reached FID, signalling a potential stall in progress toward net-zero targets.
Navigating financial uncertainties
The complex structure of clean energy projects often deters investors. These initiatives typically demand high upfront costs offset by lower operating expenses over time, creating a lengthy path to return on investment.
“The reality is that many climate tech startups are hardware-heavy and require a lot of time and capital to scale,” says Arjun Jairaj, an Investor at venture capital (VC) firm noa.
“To manage this as a VC fund in this space, while we do invest in hardware, we look for companies that are as asset-light as possible,” he continues. “We’re also conscious of capital intensity. We support businesses that are investing venture equity into research and development and working on products that have a clear path to commercialisation. Investors looking to make a quick buck should probably look elsewhere.”
Recent economic and inflationary challenges have exacerbated concerns around upfront expenditure, with utility-scale solar PV and onshore wind investment costs
now 25% higher than in 2019. However, solutions and mechanisms out there are having an effect.
Lewis Gardner is Managing Director at Gamcap, which has been steering investments into green energy projects for the past decade. “Public-private partnerships combine public resources and regulatory support with privatesector innovation and capital,” Gardner says. “Power purchase agreements, meanwhile, offer additional stability through guaranteed long-term contracts with energy buyers.
“Some governments are taking proactive steps, such as managing pre-bid work and tender auction processes. This has kind of approach has been demonstrated successfully in India’s solar auctions and offshore wind tenders in Germany and the Netherlands.”
Bridging the government-industry divide EIC has identified a concerning trend in government attitudes toward the energy sector. Some administrations have adopted an adversarial stance toward oil and gas, assuming separate ‘bad’ supply chains for fossil fuels and ‘good’ ones for renewables. However, EIC data shows that 80% of companies in the UK energy supply chain still rely on oil and gas revenues while driving cleantech innovation.
EIC’s recently published manifesto advocates for treating the energy sector as an integrated whole rather than following a siloed approach. This will ensure that companies can operate across the spectrum of energy activities, supporting their survival and growth through the energy transition.
Building community support
Local opposition can significantly affect project timelines and investor confidence. If the green energy financing gap is to be reduced, it will be critical to bring the public along on the net-zero journey.
Some innovative approaches to community engagement are showing promise.
The reality is that many climate tech startups are hardware-heavy and require a lot of time and capital to scale
Arjun Jairaj, Investor, noa
“Crowdfunding and community investment schemes not only secure necessary funding but also foster local ownership and support,” Gardner says.
“I can think of a couple of success stories here in the UK. They include Low Carbon’s Maldon Wycke Solar Farm in
Crowdfunding and community investment schemes not only secure necessary funding but also foster local ownership and support
Lewis Gardner, Managing Director, Gamcap
Essex, which engaged nearly 2,000 visitors through public consultations. In Scotland, Rethink Glasgow’s interactive community engagement platform gathered over 1,300 contributions towards sustainability initiatives.”
Strengthening grid infrastructure
Grid connection remains a critical bottleneck, with an estimated 3,000GW of renewable power projects awaiting connection around the world.
“The grid capacity is of extreme importance,” comments Javier Dominguez, Managing Director of TWEFDA, an Aberdeen-based innovator of a solution that can switch between generating and storing power generated by waves.
“The grid is used to take the power from where it is produced to where it is consumed,” Dominguez explains. “In large distances, the interconnectivity of every user of electricity guarantees the power is reached when required. Connectivity in large distances also reduce the renewable energy intermittency that, up to now, the grid has had.
“As Matt Hinde, the Head of European Affairs for the National Grid, has said, there is no energy transition without transmission.”
Addressing the global ‘grid gap’ is likely to be extremely costly – around US$607bn needs to be invested in grid infrastructure every year until at least 2030 if net-zero goals are to be met.
Countries such as India and Brazil are increasingly turning to private capital to expand their infrastructure, while in the UK, providers face connection delays of up to 15 years, with projects worth US$253bn currently stuck in connection queues.
The UK is addressing this challenge through the creation of the National Energy System Operator and the Long Duration Electricity Storage investment support scheme, designed to boost investor confidence and unlock billions in funding for renewable energy storage. This ‘cap and floor’ structure offers developers a guaranteed minimum income while
As Matt Hinde, the Head of European Affairs for the National Grid, has said, there is no energy transition without transmission
Javier Dominguez, Managing Director, TWEFDA
Key barriers to investment
limiting excessive profits, creating a balanced approach to risk management.
Streamlining regulations
Low investment rates
Only 5% of green energy projects reach FID
The regulatory landscape also presents significant challenges. Around the world, there are 68 different carbon initiatives currently affecting the renewable energy sector across various countries.
“We operate in markets that have historically been highly regulated and complex to navigate, with entrenched incumbents that have traditionally operated without much market competition,” says Jairaj. “Meanwhile, the liberalisation of energy markets has not been uniform across countries. In those that were made competitive, we are seeing tremendous innovation and new entrants and challenger models, but it will take a fund cycle for these to scale and demonstrate the type of impact and return we expect.”
Mixed messages in subsidy policies further complicate matters. For example, France’s fossil fuel subsidies and Spain’s efforts to reclaim profits from renewable operators are sending conflicting signals to potential investors.
However, progress is being made through clear and stable regulatory frameworks. Denmark has established a one-stop shop for offshore wind permitting, while Germany has streamlined its wind farm approval process, resulting in an 80% increase in project approvals in 2023 compared to 2022.
The introduction of targeted subsidies, tax credits and feed-intariffs for clean energy projects has helped to reduce financial
Public-private partnerships
Combine public support with private innovation
High upfront costs
Clean energy projects require significant initial investment
Economic uncertainty
COVID-19 aftermath and inflation impact costs
barriers. However, it is important to note that investors remain cautious about market dependence on these mechanisms –currently, 75% of global solar is linked to feed-in tariffs, making it vulnerable to regulatory changes.
“Politically, there needs to be a recognition that this is the right thing to do for our climate, and that it’s not a zero-sum game – there are good gains to be made by investors, companies and governments,” says Jairaj. “But there is clearly a reactionary element to ‘the cost’ of the transition, and it will take tremendous political will to push the right types of measures.”
Regulatory complexities
Different carbon initiatives and mixed subsidy policies create confusion
Power purchase agreements
Long-term contracts offer financial stability
Grid bottlenecks
3,000GW of renewable projects are waiting for grid connection globally
Looking
ahead
To address these challenges head on, EIC will be hosting its Bankable Energies event in London in February 2025. This gathering of stakeholders will bring the global investment community, key project developers and policymakers together to discuss solutions for driving projects forward and meeting net-zero targets.
For more information about this event and to join the discussion on unlocking investment for future projects, visit the-eic.com/ Events/BankableEnergies.
Community engagement
Crowdfunding and local investment schemes to build public support
Government initiatives
Proactive steps such as pre-bid work, auction processes and clear regulatory frameworks
Bankable Energies
February 2025, London. Global platform that aims to bridge the investment gap and advance net-zero projects
Strengthening grid infrastructure
Invest US$607bn annually until 2030 to expand grid capacity
hurdles Transition technologies face development
Policy gaps,
funding
and inflation are hindering progress for hydrogen, sustainable aviation fuel and floating offshore wind projects, says Nabil Ahmed
The transition to cleaner energy relies heavily on emerging technologies such as hydrogen, sustainable aviation fuel (SAF) and floating offshore wind. These innovations promise to decarbonise hard-toabate sectors, but despite a growing pipeline of projects, escalating challenges – inflation, policy gaps and funding constraints – are stalling critical projects, putting the global energy transition at risk.
Headwinds for hydrogen projects
Green hydrogen, produced from renewable energy, offers a clean energy storage solution and complements intermittent renewables such as solar and wind, reducing reliance on fossil fuels. However, the industry is grappling with delays caused by weak demand, insufficient infrastructure, inadequate policy frameworks and weak financial drivers.
Uniper’s large 100MW H2Maasvlakte project in the Netherlands exemplifies this struggle. Due to the failure of securing a power purchase
agreement, its full-scale development has been scaled back and delayed to 2030; only one-fifth of its capacity is expected by 2028.
Similarly, Repsol in Spain has put several renewable hydrogen investments on hold because of the local government’s plan to make permanent its windfall tax on energy revenues. As such, the developer has decided to only go forward with one project in its pipeline.
The situation in the US is no different. Hy Stor Energy has terminated its agreement for 1GW of electrolyser capacity with Nel for an undisclosed reason. The Mississippi Clean Hydrogen Hub project was poised to be the largest off-grid hydrogen production and salt cavern storage hub in the US.
SAF struggles to take off
As the aviation sector aims to decarbonise, SAF – a low-carbon alternative to conventional jet fuel – will become increasingly important as the only viable near-term option, reducing lifecycle emissions by up to 80%. However, costs remain prohibitive; SAF production can
be five times costlier than traditional jet fuel, creating hesitation among investors.
Setbacks have plagued major SAF projects. In the UK, Velocys’ Altalto SAF plant is stuck in its pre-construction phase with no clear timeline for a final investment decision (FID). This may be down to factors such as insufficient funding (despite the availability of subsidy mechanisms) and prolonged front-end engineering design studies due to the nascency of the technologies – challenges that exist in many other projects.
Projects are also struggling to secure the investment needed to reach the construction stage. In the US, developer Gevo has been working for almost 12 months to secure a loan guarantee from the US Department of Energy to fund the construction of the Net Zero 1 SAF project. This hold up has set the project back by more than a year.
The SAF sector’s shift towards hydrogen-powered power-to-liquid processes adds complexity, with investors hesitant about the high costs in such a novel industry. The financial returns, on paper, do not appear to justify the investment. Without government-mandated strategies and robust incentives, private sector confidence is unlikely to grow.
Rough waters for floating offshore wind
Floating offshore wind technology unlocks wind energy potential in deeper waters where fixed turbines are not viable. It boosts renewable energy capacity significantly, particularly for nations with deep coastal areas, contributing to global renewable energy goals. However, progress is hampered by financial and logistical hurdles.
In the UK, Blue Gem’s Erebus offshore wind farm failed to secure a Contract for Difference, preventing the project from moving forward. Developers have indicated that without adequate funding, floating offshore wind projects cannot proceed. Furthermore, delays and challenges in established markets emphasise that these issues are not confined to newer or less experienced regions.
Floating offshore wind is struggling to progress due to several challenges that have yet to be resolved for fixed-bottom turbines, including port and vessel availability and manufacturing limitations. With fixed-bottom projects already encountering physical and logistical hurdles, many companies are reluctant to invest in floating offshore wind until these matters are resolved.
Inflation and supply chain woes
Across all three technologies, inflation has squeezed developers
and supply chains alike. Rising costs make it difficult to achieve profitability, leading companies to deprioritise energy transition projects in favour of ventures such as oil, gas and nuclear.
According to EICDataStream, energy transition FID rates are starkly low: only 8% of hydrogen, 28% of SAF and 2% of floating wind projects globally have reached FID as of September 2024. This trend reflects the broader uncertainty and financial constraints affecting these nascent sectors.
Bridging gaps with policy and support
While hydrogen, SAF and floating offshore wind all have substantial project pipelines that present opportunities for the supply chain, the industry has yet to see a significant number of projects reach FID and achieve the milestones necessary for commercialisation to truly take off.
To unlock their full potential, governments and stakeholders must address these systemic challenges through targeted policies, robust funding mechanisms, and incentives to attract investment.
Failure to act risks stalling the energy transition at a time when the world cannot afford to fall behind.
By Nabil Ahmed, Energy Analyst at EIC
Hydrogen, SAF and floating offshore wind: in numbers
Hydrogen
1,032
global projects in the pipeline
84% of projects are green
Global CAPEX: >US$1tn est.
8% of projects have reached FID
58% of projects in feasibility stage
Only 5% of projects in EPC stage
Top 5 markets: Germany, Spain, US, Australia and UK
SAF 42
global projects in the pipeline
Global CAPEX: US$108.6bn
28% of projects have reached FID
UK: 25% of projects to reach FID by end of 2025
US: 30% of projects to reach FID by end of 2025
30% of projects in feasibility stage
17% of projects in EPC stage
Top 5 markets: UK, US, Brazil, Canada, Australia
Floating offshore wind
global projects in the pipeline
Global CAPEX: US$432bn by 2035
2% of projects have reached FID
94% of projects in feasibility stage
Only 0.8% of projects in EPC stage
Top 5 markets: UK, Italy, South Korea, Spain, Philippines
Renewable energy is at the forefront of efforts to combat climate change and reduce reliance on fossil fuels. Technologies such as wind, solar and geothermal energy are expanding, but their progress is fraught with challenges similar to those in the emerging energy markets. From offshore wind farms to large-scale solar projects and geothermal installations, developers are navigating a complex web of financial, regulatory and logistical barriers that complicate the path to final investment decision (FID).
Offshore wind
Wind energy is one of the fastest-growing renewable energy sources, with both onshore and offshore wind farms offering large-scale power generation. Offshore wind has huge potential, providing higher capacity due to the stronger, more consistent winds found offshore. The leading countries in this sector include the US, UK, Netherlands, Germany, Taiwan, Japan and South Korea. However, the sector is encountering delays across all stages of development.
The UK’s 1.2GW Dogger Bank A farm, developed by Equinor, SSE Renewables and Vargrønn, has been delayed by more than a year because of construction setbacks. Norway’s Sørlige Nordsjø II wind auction for a 1.5GW wind farm was delayed over issues with financial models and permitting before it was awarded to Ventyr Energi. And across the Atlantic, the US Revolution offshore wind farm has also faced setbacks, with startup pushed to 2026 over construction delays and nearby substation issues.
Solar power setbacks
Solar power is a widely scalable, cost-effective
renewable energy source and currently the cheapest form of renewable energy. It supports diverse applications across residential, commercial and utility-scale power generation. The UK and Spain are home to some of Europe’s largest solar project pipelines, while the US leads in North America and India is making notable progress in the Asia-Pacific region.
However, large-scale solar farms do face obstacles. In the UK, major projects have been delayed by lengthy approval processes: Sunnica Energy’s 500MW Sunnica solar
farm, Low Carbon’s 500MW Gate Burton project and Canadian Solar’s 350MW Mallard Pass Solar Farm each waited up to four years.
Geothermal
Geothermal energy uses the Earth’s internal heat to generate electricity or provide direct heating, offering a reliable baseload renewable energy source that contrasts with the intermittent nature of wind and solar power. Leading markets for
Barriers slow progress
in clean energy
The global push for clean energy faces complex hurdles in offshore wind, solar and geothermal sectors. Action is essential to meet targets, says Nabil Ahmed at EIC
geothermal energy include Iceland, Kenya and Indonesia.
In Indonesia, the 65MW Bukit Kili geothermal power project, developed by PT Dyfco Energy, has faced delays in obtaining environmental permits and meeting other planning requirements, pushing startup to 2030. Hitting milestones in large projects will be critical if Indonesia is to meet its 9.3GW target by 2030, and such setbacks will make this harder. Similarly, the 100MW Kalinga geothermal project, developed by Chevron Geothermal Indonesia and Aragorn Power, went through many planning phases before moving to the development stages.
Struggles to reach FID Projects are finding it challenging to reach FID for several reasons. The rise in inflation is affecting all stages of project development and the value chain. Developers are struggling to maintain profitability in cleaner energy sectors, so the supply chain, including original equipment manufacturers and SMEs, is also suffering and reluctant to commit to large-scale projects. As a result, many projects are at a standstill. Developers have been forced to delay or shelve projects, exit markets and sell stakes in their ventures, particularly in offshore wind farms. Even large-scale projects at early stages are facing challenges, as the initial investments required have ballooned and the associated risks have increased substantially. There needs to be financial certainty in order to get these projects moving forward. Some offshore wind
auctions have also been delayed or cancelled, such as in Lithuania and Estonia, simply due to a lack of bids or financial interest. Similarly, geothermal projects are seeing slower growth as high upfront exploration costs, technological barriers and environmental concerns hinder progress. Even in countries where geothermal already plays a significant role, investment is declining because of unattractive incentives and lengthy permitting processes.
In some solar markets, gaining planning approval can be a long process – projects of around 100MW may wait three to four years for approval from local authorities or governments. The lack of investors willing to take on the inherent risk of these projects is also hindering sector growth.
Bridging gaps with policy and support
Strategic policies are needed to create a path for development and investment, and to move projects to FID. And financial mechanisms will be critical in boost investor confidence and reducing risk. In the UK, the Contract for Difference scheme has helped provide financial certainty, making it easier for projects to secure backing and move to construction.
Many regions are pushing for more renewable energy, driven by political agendas and the need for energy security to reduce dependence on fossil fuel imports. While there is a push for innovation and technological advances, which could mitigate these headwinds, progress must move faster. The supply chain is in limbo, awaiting decisive action to bring these policies and financial mechanisms to fruition and ensure that the renewable energy sector can meet its targets
By Nabil Ahmed, Energy Analyst at EIC
Offshore wind, onshore wind, solar and geothermal: in numbers
Offshore wind
302
global projects in the pipeline –238GW capacity
US$597bn CAPEX
10% of projects have reached FID 13% in EPC
Top 5 markets: UK, US, China, Germany, Netherlands
Onshore wind
1,800
global projects in the pipeline –461GW capacity
US$565bn CAPEX
Less than 10% have reached FID
30% in EPC
Top 5 markets: US, Australia, UK, Spain, Brazil
Solar
3,295
global projects in the pipeline – 927GW capacity
US$875bn CAPEX
20% of projects have reached FID
40% in EPC stage
Top 5 markets: UK, Germany, Spain, US, India
Geothermal
160
global projects in the pipeline –9.6GW capacity
US$25bn CAPEX
10% of projects have reached FID
26% of projects in EPC stage
Top 5 markets: Indonesia, Philippines, T ürkiye, Kenya and US
The global energy landscape is undergoing a monumental shift. The International Energy Agency has forecasted that energy demand will more than double by 2050, presenting both a massive challenge and an opportunity for the oil and gas industry, which will continue to play a pivotal role in meeting the world’s energy needs.
O ffshore oil platforms, particularly floating production, storage and offloading (FPSO) units, have long been a cornerstone of the global energy sector and will continue to benefit from a robust project pipeline for years to come.
Decarbonisation drives innovation
H owever, the rising emphasis on decarbonisation, along with the rapid growth of renewable energy and low-carbon fuels in recent years, has pressured the exploration and production (E&P) industry to adapt. To align with environmental, social
and governance requirements while increasing production levels, the sector has been compelled to innovate and implement increasingly advanced low-carbon technologies.
Today, the E&P industry is making significant strides in reducing greenhouse gas emissions through a range of innovative solutions. These include the deployment of combinedcycle gas turbines and closed-flare systems on FPSO topsides, advances in post-combustion carbon capture systems, and the development of fully electric platforms. This adaptability has already yielded measurable results in important global markets, with many newly sanctioned FPSO projects –both newbuilds and conversions –incorporating a variety of these cutting-edge technologies to address these emerging demands.
FPSOs in key markets
O ffshore projects, particularly those in Brazil and Guyana, are leading the charge, with billions of dollars having been invested in new platforms and
Oil and gas thrives amid energy
transition delays
Oil and gas projects continue to secure final investment decisions despite mounting challenges from decarbonisation pressures and energy transition delays. Collaboration and innovation remain key to balancing sustainability and demand says Lucas Ramos at EIC
deepwater exploration. E ICDataStream has identified that Brazil (US$89bn) and Guyana (US$42bn) will be two of the world’s largest FPSO markets by the end of the decade, with Norway, Australia and Angola completing the top five.
Most s anctioned FPSOs will be used to extract oil and gas for Petrobras in Brazil’s ultra-deepwater pre-salt fields, accounting for nine out of 12 FPSOs producing nearly 2m barrels per day (bbl/d). In Guyana, ExxonMobil’s FPSOs in the prolific Stabroek block, northwest of Brazil’s Equatorial Margin, will produce 750,000 bbl/d from three units.
In 2024 alone, three newbuild FPSOs have been sanctioned in Brazil and Guyana. In April, the Whiptail field was approved as part of Stabroek’s sixth development phase, with the 250,000 bbl/d Jaguar FPSO. In May, Seatrium secured an EPC contract for the P-84 (Atapu) and P-85 (Sépia) FPSOs, each of which can process 225,000 bbl/d in Brazil’s Santos Basin.
O ther notable developments in 2024 included Angola’s first large deepwater project in the Kwanza Basin, with TotalEnergies’ final investment decision (FID) for the 70,000 bbl/d Kaminho FPSO. Meanwhile, in Suriname, a US$10.5bn investment was committed to the country’s first FPSO – a 220,000 bbl/d unit that will develop the GranMorgu field in Block 58.
Emerging markets drive growth
E merging markets are expected to present significant growth opportunities in the coming years. For instance, in Suriname, areas such as Block 52 are still in the early stages of development, but the potential for suppliers remains strong.
S imilarly, Namibia’s deepwater opportunities in the Orange Basin, such as TotalEnergies’ Venus project and Galp Energia’s Mopane discovery, offer promising prospects. Offshore Malaysia is also poised for activity, particularly as the 50-year-old Kikeh FPSO may be replaced by a smaller unit in the near future.
Oil and gas dominance
O il and gas projects have traditionally been the core business for many developers and contractors, securing FID due to predictable and rising demand for oil, high returns and a well-established supply chain. In contrast, a significant number of energy transition projects around the world – such as low-carbon hydrogen, carbon capture and storage, and carbon capture, utilisation and storage initiatives –have not yet reached FID. Factors contributing to this include inflated costs, funding gaps, unclear regulatory frameworks and slow demand growth. These challenges have led to frequent delays and cancellations, further widening the gap between net-zero targets and actual progress.
Energy demand will more than double by 2050, presenting both a massive challenge and an opportunity for the oil and gas industry
Downstream, midstream and upstream: in numbers
Downstream
680 global projects in the pipeline
CAPEX: US$1.4tn
30% of projects have reached FID
Top 5 markets: India, Russia, China, US, Indonesia
Midstream
805 global projects in the pipeline
CAPEX: US$1.2tn
23% of projects have reached FID
Top 5 markets: US, Nigeria, Russia, Canada, Mexico
Upstream
1,148 global projects in the pipeline
CAPEX : US$1.4tn
21% projects have reached FID
Offshore E&P (FPSOs and beyond): 698 global projects in the pipeline –US$877bn CAPEX
Top 5 markets: FPSO markets: Brazil, Guyana, Norway, Australia, Angola
Supply chain pressures
Despite the relative advantages in the market, the global FPSO industry faces several challenges, including soaring costs for goods and services post-COVID-19, increasing pressure on the supply chain to meet rapidly evolving quality standards while delivering within schedule, and growing difficulties in securing financing from private banks, resulting in unsuccessful tenders for leased units. These issues have forced even world-class operators to rethink platform designs and contracting models. In 2024, most of Petrobras’ FPSO tenders released under long-term charter models saw limited and overpriced bids. As a result, revised tenders are shifting to build operate-transfer processes, a model thatis more common in Guyana than in Brazil.
Cooperation and support are key
The energy industry is at a pivotal moment. Stakeholders must navigate complex challenges and strategically align their efforts to ensure there will be a steady pipeline of oil and gas projects after this decade. At the same time, there is a critical need to accelerate
Oil and gas projects have been the core business for many developers and contractors, securing FID due to predictable and rising demand for oil, high returns and a well-established supply chain
the energy transition, which will make real opportunities available for the supply chain. Plenty of work awaits in traditional sectors, and cooperation and support will be essential to expand the energy supply chain and facilitate a smooth, timely transition to more sustainable energy solutions in the coming decades.
By Lucas Ramos, Lead Energy Analyst (CAPEX) – Americas, EIC
Guanabara Bay, Rio de Janeiro
26-27 February 2025
The energy transition has largely centred on the maturing of renewable energy, with efforts to ensure that solar and wind farms’ viability outperforms traditional fossilfuel-based power generation.
Renewables need conventional support
EIC has recently seen a surge of financial incentives, including those provided under the US 2022 Inflation Reduction Act, which have significantly boosted financial support across the solar panel and wind turbine supply chains. Despite these advances, technical challenges persist, particularly around integrating large amounts of intermittent renewable energy into power grids. As a result, traditional turbines may still have a supporting role to play in the energy transition by helping to stabilise a greener but more variable grid.
According to EICDataStream, solar and wind farms are projected to dominate new power generation capacity additions
Efforts to expand renewables including solar and wind energy are transforming global power grids. But conventional turbines remain critical, says Firdaus Azman
around the world until 2030, with the exception of the Middle East, where renewables are expected to contribute only 47.2% of new capacity. In other regions –Asia-Pacific, Europe, the Americas and Africa – renewable energy sources will significantly outpace conventional systems, with traditional gas and coal-fired power plants and nuclear reactors comprising just 25–37% of new installations.
While this variation is region-specific, one shared objective is to ensure grid reliability while accommodating fluctuating power demands. Solar and wind power sources have inherent limitations because of their intermittent generation capabilities. Conventional
turbines address this issue by providing a steady baseload supply, or by quickly compensating for power shortages to deliver peaking power. While conventional turbines make up only about a quarter of future additions, they will remain essential to supporting the energy transition.
Growth in gas-fired power
Brazil and the US are at the forefront of adding new gas-fired capacity, expanding renewable energy infrastructure while integrating combined-cycle gas-fired capacity in anticipation of the growing clean energy sector.
The US is deploying peaking power plants equipped with fast-start turbines to respond quickly to peak demands on the grid. For instance, the 380MW Timmerman gas-fired project in Texas will use 20 Wartsila 50SG advanced engines that can ramp up to full power in just a few minutes, ensuring reliability in areas with high renewable energy penetration. Other countries, such as Indonesia, the UK and Singapore, are also deploying peaking power plants to complement renewable sources.
Hydrogen’s role in cleaner combustion
A critical evolution in turbine technology is in combining hydrogen with natural gas to reduce emissions. Hydrogen-ready turbines, designed to operate on a blend of both fuels, represent a step toward lower-carbon power generation. While these turbines initially run on natural gas, they can gradually transition to higher hydrogen blends as hydrogen production scales up.
future Powering the
Traditional turbines may still have a supporting role to play in the energy transition by helping to stabilise a greener but more variable grid
Germany is emerging as a leader in this area, with projects such as EnBW’s Heilbronn Combined Cycle Gas Turbine Power Plant showcasing innovative approaches. This 750MW plant is set to replace an ageing coal facility and will also supply a significant amount of thermal energy. GE Vernova’s 9HA.01 turbine can burn up to 20% hydrogen by volume and switch to higher blends as the sector matures. Construction work started in March 2024 and is expected to be finished in 2026. By 2030, the project will contribute significantly to Germany’s 4GW pipeline of natural gas-hydrogen and pure hydrogen power projects.
This transition is not without its challenges. Given its nascency, hydrogen production and supply infrastructure still need to be developed, limiting the scalability of such projects. However, with substantial government subsidies, such as Germany’s US$227.69bn commitment to expand 10GW of hydrogen-ready plants, the sector is poised for growth.
The future of energy transition
The energy transition will require a combination of renewable energy sources and traditional gas and coal-fired power plants, including hydrogen-ready plants. As renewable energy technology progresses and challenges in grid integration remain, traditional turbines will be essential in maintaining a stable and reliable energy supply. While the path to a greener grid will rely on turbines, they are adapting to support a more sustainable future.
By Firdaus Azman, Energy Consultant, EIC
Hotspots: coal, natural gas and natural gas-hydrogen
Top 3 regions
projects until 2030* by CAPEX
Top 3 regions Natural gas
generation projects until 2030* by CAPEX
Leading
Top 3 regions
Natural gashydrogen
China
Dual path to energy
resilience
Traditional reactors and small modular reactors are enhancing global energy resilience and driving the energy transition, says Firdaus Azman at EIC
Nuclear power is rapidly emerging as an important player in the global shift to carbon-free energy. As the world strives for a cleaner future and better energy security, the relevance of nuclear energy has regained significant momentum, surpassing pre-Chernobyl levels. With renewed governmental support, countries around the world are investing in both traditional nuclear reactors and small modular reactors (SMRs), charting a dual path toward energy resilience and sustainability.
Asia leads the charge
Asia is at the forefront of nuclear expansion, with China and India leading the way in terms of the number of projects reaching final investment decision (FID). These countries, plus South Korea and Japan, have a track record in nuclear power and are using their expertise and supply chains to fast-track new projects.
In Europe, excluding Russia, the drive is equally strong. France, the UK, Czech Republic, Turkiye and Hungary are all advancing ambitious projects that are underpinned by government support and collaboration between public and private stakeholders. These are primarily based on traditional pressurised water reactor technology.
Government support drives expansion
Government policies are pivotal in shaping the progress of nuclear energy projects.
South Korea’s stance on nuclear power has shifted dramatically in recent years. In 2017, President Moon Jae-in made the controversial decision to phase out nuclear energy, but current President Yoon Suk-yeol’s government has reversed this policy. The resumption of major projects, such as the 2.8GW Shin Kori 5 and 6 and the 2.8GW Shin Ulchin 3 and 4 nuclear power plants,
signals a strategic shift towards prioritising energy security and economic growth by expanding nuclear power.
In Europe, the focus is on completing major nuclear projects such as the UK’s Hinkley Point C. After years of negotiations, this 3.2GW nuclear power plant is expected to be operational by the end of the 2020s. The path to FID has been lengthy, beginning in 2013 with negotiations between the UK government and the operators, EDF and China General Nuclear (CGN). FID was eventually secured in 2016 after CGN acquired a 33.5% minority stake in the project.
However, the project has faced significant challenges, including escalating costs and delays. Initial cost projections of £18bn in 2016 have ballooned to an estimated £46bn, and CGN halted its funding in December 2023 because of rising UK-China tensions. However, construction has continued despite these hurdles, with notable progress including the arrival of the first of eight steam generators from Framatome in June 2024, and the installation of a 423-tonne steel liner ring in the reactor building in October.
EDF has enlisted the expertise of Assystem, AtkinsRealis, Jacobs and Vulcain Engineering to help in the development of the project. Meanwhile, negotiations between the UK government and EDF are ongoing over a potential loan agreement to address the remaining costs. The UK government remains committed to large-scale nuclear energy, having announced plans for a third nuclear plant at Wylfa and expecting to secure an FID for Sizewell C before the end of 2024.
SMRs: A promising future
Technological advances, particularly SMRs, are reshaping the nuclear energy landscape. These reactors, which have a power capacity of up to 300MWe, are compact and modular, enabling greater adaptability, lower construction costs and better safety compared to traditional reactors. These features have attracted global interest, from established nuclear nations to emerging markets such as Southeast Asia.
EICDataStream projects that SMR deployment will rise steadily from 2027, peaking in 2033. Their factory-based production and the ease with which they can be transported make them particularly suitable for powering energy-intensive operations such as data centres and remote mining facilities, as highlighted in Canada’s SMR roadmap.
While SMRs offer lower upfront costs than traditional large-scale reactors, their nascent stage has limited the number of FIDs. To overcome this, governments and industry stakeholders are pursuing innovative financing strategies, including public-private partnerships to boost investor confidence and accelerate deployment. For example, the UK’s SMR competition, involving companies such as GE Hitachi, Holtec, Rolls-Royce SMR and Westinghouse, shows the potential for collaboration and innovation in this sector.
The road ahead
The future of nuclear power looks promising, with more and more countries recognising its potential to provide reliable low-carbon energy. As technological advances continue and public perception of nuclear improves, we can expect to see a surge in the number of these projects, especially in regions with strong energy demands and concerns about climate change.
By Firdaus Azman, Energy Consultant, EIC
Layla Rocha NEUMAN & ESSER
Analyst
offering project engineering, machinery integration and installation, commissioning and aftermarket technical support, and delivering high-performance solutions across various industry sectors.
How is a day in your role?
NEUMAN & ESSER fosters an environment that encourages collaboration and knowledge sharing, allowing people to develop their skills and contribute to industry advances. The teams are wellprepared to support this mission. My daily routine focuses on collaborative efforts to address customer demands, which involves interacting with various departments as well as our network of partners and suppliers.
NEUMAN & ESSER solutions are widely used in gas processing, hydrogen production and mechanical process engineering
What has been your greatest achievement?
One of my most memorable moments and a significant professional achievement was participating in the Hydrogen EXPO conference. I had the opportunity to engage with customers and partners while immersing myself in an event dedicated to a subject I am passionate about: decarbonisation through low-carbon hydrogen.
What has changed since your first day?
Layla Rocha
takes Energy Focus behind the scenes at NEUMAN & ESSER
Can you tell us about NEUMAN & ESSER?
Founded in Germany in 1830 and operating in Brazil since 1997, this family-owned company is an important player in the energy transition and circular economy infrastructure. With solutions widely used in gas processing, hydrogen production and mechanical process engineering, it supports industries to adopt sustainable practices and cleaner energy alternatives.
What services does the company provide?
As a solution provider for the industrial, research and development, and energy sectors, NEUMAN & ESSER serves the oil and gas industry, the emerging hydrogen economy, and raw materials milling and classification. It acts as a trusted adviser,
What are your daily challenges?
My primary focus is on addressing customer challenges. Embracing a solution-oriented culture, I strive to find the best answers to technical and commercial requirements. By using our expertise and the products available in the market, I work to transform conceptual projects into commercially viable, high-performance and reliable plants.
What do you enjoy most about your work?
My team and my workplace. I collaborate with kind and intelligent people, which inspires me to pursue knowledge and fosters a belief in a workplace where everyone is genuinely committed to their purpose. NEUMAN & ESSER has the structure of a large company while maintaining the welcoming atmosphere of a family-oriented environment.
I felt a mix of insecurity and enthusiasm on my first day. I was eager to see what the experience would be like, and encountered many pleasant surprises. The most valuable aspect of being in an environment that prioritises employee growth is that if you are interested and open to learning from your colleagues, they are always willing to help you excel in your work, just as they do.
What’s next for NEUMAN & ESSER?
We believe hydrogen is an important vector with immense potential in the energy transition and in achieving a carbon-neutral economy. Our focus includes personal development, cutting-edge technology and comprehensive project development. We are dedicated to leading the market and driving advances in industry, research and the creation of new business opportunities. Together, we can shape a sustainable future, and we are at the forefront of a market ripe for innovation in these areas. We are also excited to announce a new factory in Brazil, which is expected to increase our electrolyser manufacturing capacity by up to seven times.
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