BRUSSELS, Nov. 18 (UPI) -- Offshore wind energy projects in Europe will see a three-fold jump in investments over the next decade despite economic turmoil, backers say.
The European Wind Energy Association said Wednesday in Brussels its conversations with banks, global investment funds, financial analysts, public financing institutes and European utilities indicate money will continue to flow into the sector despite macroeconomic woes and moves by governments to cut subsidies.
The group said it expects annual investments in the European offshore wind industry to reach $13.4 billion by 2020 after showing growth this year even though banks have been stressed by the European sovereign debt crisis.
Christian Kjaer, chief executive of the wind association, noted installations in 2011 are expected to be up 13 percent over last year's figure.
"Offshore wind energy is a new industry with huge potential in which European companies are world leaders," he said. "Europe needs this industry to take off more than ever before."
The EWEA's growth projections come despite evidence that European governments are retrenching their subsidies for green energy projects in austerity moves.
In Britain, Chancellor of the Exchequer George Osborne this week proposed cutting in half the "feed-in" tariff paid to producers of solar energy because of the inflationary burden they place on household electricity bills.
And in Spain, conservatives who are running ahead in the polls for Sunday's elections have indicated that if put in power they will slash subsidies doled out to the country's wind power operators.
Still, the quality of the offshore wind projects is high enough to continue attracting private backers, contended Henrik Stiesdal, chief technology officer of Siemens Wind Power.
"So far the financing squeeze has not really been felt very much in the offshore wind industry," he said. "I guess the main reasons are that many deals are balance sheet financed by very solid companies, and that many parties can clearly see the long-term solidity of the business.
"In that respect we are very different from many other businesses."
Dutch bank ING, for example, made its first wind investment in July when it teamed up with the public European Investment Bank and private lenders Dexia Credit Local, Norddeutsche Landesbank and Societe Generale to finance the $1.4 billion Global Tech I wind farm in the North Sea.
Citing the stable support Germany has given to wind power, ING Vice President Juliette van Enckevort said the bank felt comfortable taking "a major leap of faith" in backing the 400-megawatt project.
"Offshore wind carries a lot more technical challenges than onshore -- the risk profile is very different," she said. "Weather conditions for example, will greatly influence accessibility of the wind farm both, during its construction and when it is operational."
And in August, the first completely private offshore wind farm financing was completed when a group of seven lenders including Commerzbank, KfW IPEX-Bank and the Bank of Tokyo-Mitsubishi backed the 80-turbine Meerwind project.
The $1.6 billion, 288-megawatt North Sea wind farm will be completed in 2013.
"This project exemplifies the progress and positive impact on the economy that can be achieved when private capital works in partnership with government, entrepreneurs and industry," said David Foley, chief executive of Meerwind's owner, Blackstone Energy Partners.