Consolidation risks driving out supply chain players

Bankruptcies likely but overhaul will strengthen sector

The offshore wind supply chain is likely to undergo significant consolidation over the next couple of years, according to industry observers.

"There are simply too many parties involved. Consolidation is needed and in the next two to three years we'll see rationalisation of the sector," predicted Christopher Hunt, managing director of energy sector investor, Riverstone, speaking at Global Wind Power Finance and Investment on Tuesday.

The prize sought by those supportive of consolidation is a more efficient supply chain. "I think we'll see more bankruptcies," said Hunt. "It is necessary in order for the sector to develop and strengthen".

Click here to find out more!In March, Riverstone sold its holding in Seajacks International, which operates jack-up vessels on European offshore wind projects. It was acquired by Marubeni Corporation and Innovation Network Corporation of Japan (INCJ). Earlier this month, German wind farm developer, Bard Group, admitted that it has been unable to secure new investment and is willing to sell off individual companies (Windpower Offshore 12-Jun-12).

Consolidation has been a key trend in recent years within what has become a highly-globalised wind turbine manufacturing sector. Further reduction in the number of turbine producers is possible. "It is likely that there won't be a large number of turbine manufacturers in the market," said Torsten Lodberg Smed, senior vice president at Dong Energy.

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