In Europe, the development of offshore wind power plays a key role in the energy transition. Much research into the conditions for this development in European countries focuses on policy instruments. However, the role of the financing options available for offshore wind power projects has received much less attention. What is the role of public financial actors when it comes to actual investments in offshore wind power, and what is the role of private financial actors? What were their respective roles in the early, experimental phase of the technology, compared to the later growth phase when the technology was rolled out at an increasingly rapid pace under ever more competitive market conditions? We analysed annual investments in offshore wind power between 1990 and 2020 based on the type of financing (public versus private) using the categorisation by Mazzucato and Semieniuk. We found that between 1990 and 2005, 86% of the offshore wind project development in the North Sea Basin was supported by financing by public actors, while 14% was supported by stock market capital. Between 2006 and 2020, however, 60% was funded by private investors and 40% by public actors. Of the six largest offshore wind power developers, the first four to grow their offshore wind installed base were fully or partially under public ownership. Our research demonstrates that financing by public actors has been crucial for the earliest development phase of this new, innovative, capital-intensive low-carbon energy technology. This finding is relevant for similar sustainable innovations that are still in the prototype or demonstration phase or have not yet reached large-scale commercial application, such as the production of green hydrogen through electrolysers. The role of public actors in financing as a key facilitator for the start of technology life cycles seems at odds with the drive for privatisation in many countries. The data patterns from our research provide information on the strategies and scenarios developed by stakeholders who want to accelerate the energy transition. Our conclusions serve as an example of the challenges arising from complex interactions between socio-economic processes, such as privatisation, versus sustainable development ambitions.
Rentier et al. (Sun,) studied this question.