Learning lessons in new American markets

Jamie Bernthal Hooker (00:18) 

Hello from TGS 4C Offshore, the market leaders in offshore wind intelligence and a proud part of TGS New Energy Solutions. My name is Jamie Bernthal Hooker, and I work with the market research team. Today I'm joined by two of our fantastic analysts, Jason Benchapongwimon and Dan Wiseman. Hi guys, would you like to introduce yourselves? 

 

Jason Benchapongwimon (00:40) 

Yeah, I'll go first. Hi, my name is Jason Benchapongwimon. I'm the market analyst for South America, Middle East and Africa and also part of Europe now in offshore wind. 

 

Dan Wiseman (00:50) 

Hi, thanks for having me again. I'm Dan Wiseman. I'm the market analyst here at TGS 4C Offshore. I specialize in North America. I also have a couple of European markets in Italy and Greece as well. 

 

Jamie Bernthal Hooker (01:00) 

Welcome back to the podcast, Dan. You were on our very first episode. So, I'm glad we didn't scare you off. Now, the United States has cancelled all unleashed wind energy areas to be replaced with something other than offshore wind. And when we think about offshore wind in the Americas, we're starting to look more closely now at other markets Canada, Brazil, Colombia, Chile, Uruguay and most recently Mexico has shown some interest in developing a regime. Even the more established markets in Europe are seeing some upsets. So, Germany receiving no bids in its latest auction is only the latest market to do so. So, what does that mean for these emerging markets? Well, let's have a look. Europe has many decades of experience in offshore wind and we're now seeing the first. 

Early turbines are being decommissioned and recommissioned, but in the Americas, it's all still quite nascent. The only country with spinning turbines is the US, which is not looking to keep that lead currently. several other countries, as we've talked about, are establishing regimes and drawing inspiration from Europe. Can you talk us through that picture, Dan? 
 

Dan Wiseman (02:20) 

Yeah, absolutely. mean, Europe's spot on. Europe's a global leader in offshore wind and they've had a head start that's quite hard to match. They figured out all the tough stuff like permitting supply chains and even know how to recycle old turbines. And that's a playbook that emerging markets like Canada are studying closely. It's the case of looking to those who walked before to lead those who walked after. In Canada, absolutely, they're starting from scratch. But the Atlantic coast, especially in Nova Scotia and Newfoundland and Labrador, has some of the best wind resources in the world. I mean, think of Nova Scotia's shallow continental shelf, perfect for fixed bottom turbines. And the deeper waters off Newfoundland are ideal for the next generation of floating platforms. So, Canada is essentially looking at Europe's success and saying, well, how can we make that work here? 

Nova Scotia's offshore wind roadmap lays out a plan to get 5GW leased by 2030 and they're hoping for the first call for bids by the end of this year. And following on from bills like C49, which was passed last year, they're setting up a federal provincial framework to streamline approvals. And it's all about building a foundation that's investor friendly but tailored to Canada's unique geography and needs. 

 

Jamie Bernthal Hooker (03:36) 

Absolutely. So, Jason, we're seeing this outside of North America as well. We're seeing that knowledge going elsewhere. 

 

Jason Benchapongwimon (03:45) 

Yeah, definitely. We're seeing Danish, Dutch, British influence in South America with Brazil, Colombia, Chile. They're very involved in their stakeholder engagements and their governmental talks. think a lot of South America is also in the Global Offshore Wind Alliance, which heavily relies on European influence. I think there's a lot of big market potential for offshore wind in South America, especially because of there`s such present onshore wind technology. Brazil is a powerhouse in onshore wind supply chain, and it has such a vast history of offshore oil and gas exploration, it makes sense for offshore wind to find its way there eventually. 

 

Jamie Bernthal Hooker (04:23) 

Yeah, that's a really good point. So, it can't really be a case of copy and paste with adapting to the specific needs of the existing regimes, supply chains, political contexts, and so on. 

 

Jason Benchapongwimon (04:38) 

No, I think you're right. I think experience can come, but every market is different. There's such different sorts of political landscapes, but also legal precedent. I think in Brazil and Colombia, especially, we're seeing legislators sort of bring parts from every good part of European legislation and mixing it with their own and sort of marrying them together to make a fit-for-use sort of framework that would suit their country technologically, economically and also environmentally as well, completely different climates and topics like temperature and weather as well. 

 

Dan Wiseman (05:15) 

Exactly. mean, and it's not plug and play. For example, Canada's got some more unique challenges that make a straight copy of Europe's model just impossible. First, Atlantic waters are a lot harsher than the North Sea, where you see brutal winters and stronger currents. That means things like turbines need to be tougher, which then again increases costs. The supply chain is also way less developed than Europe, where they've got factories churning out blades and towers like clockwork.  

So, Canada's still trying to figure out how to get those components, whether it's importing from Europe or starting to build their own capacity. And politically it's a different beast too. Canada's federal provincial system means you've got to align Ottawa and the government with provinces like Nova Scotia and Newfoundland, which adds more layers of complexity that you don't see in some of Europe's more centralized setups. 

Plus, Indigenous consultation is non-negotiable in Canada. Bill C-49 mandates it and that reflects the constitutional obligations to First Nations. That's a step that Europe didn't really have to take in the same way. Although they do have consultations with local groups and communities, they're not bound by the stricter rules that Canada have around them.  

But when you look at these emerging markets in North America and South America, because they're starting fresh, they can leapfrog some of Europe's growing pains. Up in Canada, they're reusing undersea cables from oil and gas projects in the Nova East wind project, which is kind of a clever workaround that you don't see in Europe's crowded grids. With deeper waters, they're using floating tech right from the start, and they're building on from Europe's pilot projects, customizing them for Canadian coasts. Probably the same for both sides of the Americas, whereas taking the best of Europe's lessons and adapting them to fit their unique markets. 

 

Jason Benchapongwimon (07:16) 

Yeah, I think you're right. think especially with Brazil, where we see their legislation has just recently passed at the beginning of 2025 and where we see other markets step away from open door leasing, Brazil embraces it because of their history in oil and gas. Because of that, oil and gas regimes sort of molded that offshore wind framework. Royalties are still applied to offshore wind, not really seen anywhere else. 

 

Dan Wiseman (07:42) 

Yeah, and like you were saying, because Brazil have that onshore presence as well, the transferability from skills in the workforce from onshore wind to offshore wind and the development of the port and then the retraining of people who worked in oil and gas offshore, it gives them a bit of a boost where they're not having to straight from the start train people from the ground up to be able to do this job. 

 

Jamie Bernthal Hooker (08:05) 

Yeah, and some of the areas where we're really seeing a difference between the European markets and the American markets now really shows itself in the form of subsidies. And that's become something of a sticking point or at least a talking point. And there's a lot of talking going on. Europe's early offshore wind boom was built on this generous feed in tariffs and contracts for difference and as the industry matured those subsidies started shrinking and we saw for a while successful negative bidding but we're not seeing that so much in the American markets, are we? 

 

Dan Wiseman (05:15) 

No, not at all. Europe's journey with subsidies is a bit of a masterclass on how to grow an industry. Obviously, at the turn of the millennium, they offered feed-in tariffs, which basically guaranteed high prices for wind energy. That was to get developers to take the risk. As time went on, they could shift to contracts for differences or CfDs, which then stabilized developer income while protecting consumers at the same time. 

In other markets, like you said, you had the negative bidding where developers were so confident that they'll profit, that they're paying the government for the privilege to build. Especially up in Canada, they're nowhere near that stage. As an emerging market, they're more like Europe 20 years ago, focusing on building investor confidence. Nova Scotia's 2023 roadmap talks about government-backed leases and potential CfDs to make projects bankable. 
 
So they’re not topping Europe's current low subsidy model because the risks are too high. There's no supply chain and there's no track record either. So instead, they're emulating Europe's early subsidy heavy approach to get turbines in the water and then they can go from there. But with these things, there's always a catch. Economic headwinds are hitting everybody. Inflation, supply chain bottlenecks and rising interest rates have jacked up costs across the globe. 

And this has caused developers to talk of cost spikes for projects across the world. And Canada's no different. They're feeling that too. Developers there are going to need a high CfD strike price to even break even, which means that negative bidding is nothing, but a pipe dream for now. So, I don't know if it'll be the same in South America, but up in North America, the focus is on stability and creating policies that say, invest here and we'll make it worth your while in the end. 
 
 

Jason Benchapongwimon (10:41) 

Yeah, I think you're definitely right. think we're seeing developers say to their European markets, we are going to cease development or sell up or not bid in your coming auction because subsidies just aren't on the table. I think Columbia put one step forward and say, ‘we're thinking about CfDs now. We've had consultations to make it work. We're planning to index it to weather patterns because obviously our country’s power prices are very heavily reliant on rainfall, as is Brazil.’ I'm not sure what it is in Canada. But where we see subsidy being employed in South America, we see development grow. In 2009, onshore wind was a nascent technology in Brazil. It was offered the highest strike price onshore wind has ever earned in Brazil. And now they're the fifth most installed country in 2025. It's definitely plausible that these emerging markets are going to have to rely on these subsidies if they want the steel in the water. 

 

Jamie Bernthal Hooker (11:43) 

Yes, so potentially a big opportunity, if that's not a weird way of putting it, for new markets to spring up. But of course, all countries are affected by the economic headwinds going on at the moment. So, what can be achieved, I guess, is a different question. We are seeing big players reconsider their pipelines in these mature markets. Orsted's value over volume strategy, the careful approach from Copenhagen offshore partners, Statkraft and Blue Float reducing their portfolios. Blue Float is especially active in newer markets that are focused on floating wind. But how is that playing out in the emerging markets? 

 

Dan Wiseman (12:32) 

It's a double-edged sword. In mature markets, we're seeing pullbacks where major developers are scrapping projects in the US because inflation and supply chain issues just make them completely unviable. We've seen Horn C4 facing delays for similar reasons. These are warning signs that even giants are feeling the pinch. But I think in the smaller emerging markets like Canada, it's also a bit of an opportunity. 

because when projects stall in places like the US or Europe, capital and expertise become available. European heavyweights like Orsted or even the smaller companies like North and Power who already are active in Canada's Hecate Strait are looking at emerging markets where competition is lower and growth potential is a lot higher. Canada has got a lot to offer. World class wind speeds, stable policy environment with Bill C-49, and a chance to tie offshore winter green hydrogen production, which is a big draw for decarbonization goals. 

But even the emerging markets aren't immune to the same risks. If they don't offer competitive incentives or if Canada doesn't speed up their permitting, then those big players might stick to safer bets in Europe. This is why things like Nova Scotia's call for bids is crucial. It's their chance to show that they're open for business. 

The trick is to leverage the uncertainty in mature markets to pull investments there while avoiding all the pitfalls like overreliance on shrinking subsidies in smaller emerging markets. 

 

Jason Benchapongwimon (14:11) 

Yeah, I think you're definitely right. think the of the poll that these markets have is extraordinary. think Brazil have had development there for like going on five years now. I think these big changes and big upsets that have happened in European markets are definitely felt in these emerging markets. We have Colombia, they've adjusted their own auction seven times now. The most recent change was when they added developer-friendly dropout clauses, after Hornsea 4 had become uneconomical due to sort of interest rates and rising supply chain costs.  

Columbia said, ‘hey, if this happens to you in our market, we won't penalize you,’ trying to attract that development. They are trying to make themselves more attractive than the established European markets. Because I suppose it is competition between your emerging markets and your established markets. Where is your developer's investment going to go? 

I think with big developers like your Orsted, your RWE, shrinking their ambitions, shrinking their investment, the competition is much tighter. It's a much higher stake. I think these emerging markets are fighting tooth and nail to give every subsidy, every legal protection they can to make sure that their country is the one that has steel in the water first. 

 

Dan Wiseman (15:32) 

Yeah, absolutely. I think for both South America and Canada, they can leap on the chaos that's happened in the US where developers aren't going to be focusing for the near future by any stretch of the imagination. If there's something that Brazil and Canada can do to say, look, we're here, we're open, and pull that away from Europe because a lot of developers who were looking at the US had started to figure out things like supply chain, how much it's going to cost to transport goods over there and start to work on those sort of ideas. Going slightly north or south of the US isn't going to be massively out of the way of what their plans were initially. It's a good opportunity. There's always a silver lining with stuff that happens in the offshore wind. 

 

Jamie Bernthal Hooker (16:26) 

It's very fascinating, isn't it? How different regimes can take diametrically opposing lessons from things that go wrong. But what's really interesting we hear is that I feel like in a way we're talking about European developers, we're talking about the big hitters and suddenly manufacturers and component suppliers. It makes sense that Europe has developed more of a supply chain specific to this technology. But who is building this? Where is the interest coming? Is the offshore wind industry in the Americas going to come from Europe or be homegrown? 

 

Dan Wiseman (17:11) 

It's a mix, but think Europe's kind of got the edge. In the US, the offshore wind was dominated by European players. Orsted, Equinor, you name it, and even down to the supply chain, pretty much everything came from across the pond. I think that's to do with obviously the underdeveloped domestic supply chain in the US, mainly because Europe brings decades of experience and proven tech. 

So, with Canada, it's no different. If we look at Nova Eastwind, Northland Power, which is a Canadian company, bought the development rights, but they're leaning on European expertise and partnerships to make this happen. But saying that Canada's got big ambitions to grow its own industry, the roadmaps for Nova Scotia layout plans to build a domestic supply chain and tap into their oil and gas expertise in ports like Halifax. 

They've already got skilled workers from offshore oil rigs who can transition to wind like I was saying before. There's also talk of upgrading ports to handle turbine assembly. But the reality for Canada is they've only got that for the Nova Turbine Factory up in Gasp, which we heard a lot about in the news with Vineyard Wind. But at the moment, they're not producing the size of turbines that developers want.  

Canada's probably still importing bays and towers, which could come from Europe or even China depending on trade dynamics. But looking at the bigger picture is tricky because Europe is now looking for a more sort of self-reliance because of trade tensions like the US tariffs or fears of China flooding the market with cheaper components. That could limit how much tech they share with Canada. So, Canada is kind of at a crossroads.  

They can either rely on European know-how to get started, or they can just invest really heavily in their own factories and their own training programs. So, I'd say it's probably going to be bit of both in the end European leadership to kick things off, but Canada's also got to build its own muscle and then stay competitive as a standalone market. 

 

Jason Benchapongwimon (19:27) 

Yeah, I think we'll see the same thing in South America where it's quite a missed bag for both heavy hitters in South America with Brazil and Colombia. Although Brazil's first movers are definitely local domestic there. We have Petrobras, the state-owned oil company, they're pouring money into LIDAR and site characterization for their projects already before regulation has even come in for their offshore wind framework. I think this speaks to the ambition that's already present in Brazil. 

They do need to attract investment from Europe. There's a lot of European big players that are also involved in offshore wind in Brazil. But Petrobras and their universities and their other energy companies, they are providing the first steps for offshore wind in Brazil. There's a different story in Colombia where we have the first mover, Blue Float, the Spanish developer. 

They had set out to build their first project that may not be feasible now with Blue Flirt sort of pull-out from a lot of markets around the world. But the of the effect that it's had on Columbia has been quite strange. They were guaranteed to win this auction because of legal precedent and now they won’t, or they have to sell. And I think that sort of has diversified the Colombian offshore wind bag quite a bit. We have a lot of local developers now stepping in to form collaborations with these large heavy hitters in Europe to develop these first offshore wind projects. I think it's an interesting story to pink where we have large, the biggest developers in the world scaling back their ambitions and we're seeing smaller companies set up to the plate. think the Taiwanese power company, the state-owned power company, Tai Power, they recently began construction of their first commercial offshore wind project in Taiwan. Then we have Kolon Global, a Korean conglomerate, receiving consent for their first offshore wind project in South Korea. It's not out of the realm of possibility that similar companies in these emerging markets will step up to the plate where large developers are failing to. 

 

Dan Wiseman (21:43) 

Yeah. mean, and you see it elsewhere as well. I look at Estonia. Estonia has several projects that are primarily looking to be developed by smaller Estonian companies, but backed by the big boys like Van Oord. And this is where you bring that attention in. If you can prove yourself on a small scale with local companies and these big players like Orsted or Equinor say, hold on, they're doing pretty alright over there. They've proven that actually offshore wind farms work. Why don't we start looking at that a little bit more? And I think that's the approach that the emerging markets can take, especially in North America. It's like starting small, prove yourself and just make yourself a desirable asset for the sector. 

 

Jamie Bernthal Hooker (22:30) 

I feel like there's a little bit of a theme in some of these emerging markets that we also have seen in Europe historically, which is a lot of momentum, a lot of potential, and then a lot of promise and promises, which ultimately has to at some point face economic and political and geopolitical reality. So, one thing you mentioned briefly, Dan was turbines from China, the big wind turbines, there's a pretty vibrant conversation happening in Europe around that at the moment. 
 

Dan Wiseman (23:06) 

Yeah, absolutely. mean, it's security concerns. I think it's not just turbines that people have always been skeptical about when it comes to China. I know very well from being the US analyst that trust in China across the board is not always a positive thing. But think with emerging markets like Canada, it will come down to what works best and what is cheaper. That will come down to developers that start to come in and how the developers see the best course of action being.  

With Innova East, which is going to be the flagship offshore wind farm in Canada, they've partnered with SBM, so they'll be bringing their own floating tech. But if other developers come in and say, actually we can cut costs by X percent if we just go for Chinese turbines instead of looking to go to Europe, especially in places like British Columbia where it's probably going to be easier logistically to source them from China than from Europe. There's no reason why they shouldn't. If the size of the turbines that China keeps making keeps growing and they can find feasible ways of them actually standing upright in the water, then I think they're going to be a force to be reckoned with once the arguments and the conversations, like you said, start to calm down. 

 

Jamie Bernthal Hooker (24:38) 

Yeah, that's it. It's China that is making the big turbines, it is not Europe, it's not GE, it's OEMs in China. 

 

Jason Benchapongwimon (24:49) 

Yeah, I think a lot of the conversation in South America is quite mixed, especially with differing sort of relationships with China. Brazil has a great relationship with China, and we see Chinese developers in both Brazil and Colombia making claims on sort of leases. think the turbines, I think we see a lot of developers in Brazil and Chile bet on these large turbines reaching 25 megawatts. 

For their commercial projects that are going to start construction in the 2030s, they're expecting 25 megawatt turbines to be available. That's not going be available in Europe until much later on, but China is developing them right now. So, if these developers want to sort of realize their ambitions, they're going to have to rely on China, especially for costs in these emerging markets. It's going to be a lot cheaper to source many components from China than it is to import them from Europe. 

 

Jamie Bernthal Hooker (25:45) 

Okay, really interesting conversation. I'm going move to my last talking point slash question, which is, which of your markets will we see first steel in new water? 

 

Dan Wiseman (26:06) 

Well, there's not really much to choose from in North America because it's definitely not going to be Mexico. It's definitely not the US. Nova Scotia in Canada is going to be having the first deal in the water. think although there's surveys out in British Columbia, they're way too far behind. With Nova Scotia having their bids at the end of this year, hopefully touch wood. 

This is where Nova Reiss is going to shine. They're already doing survey work now. They've been doing it for a while. This just means that we could potentially see construction by maybe the end of 28, 29, assuming that environmental approvals and permitting stays on track. Yeah, they've got the edge. Great winds, existing cables from old gas projects and a clearer roadmap. 

I don't think Newfoundland and Labrador are too far behind. They had bill 90, which is mirror legislation to see 49. And then they can start to see potential leasing maybe this year or next year if they get on with it. So we'll probably see that kind of towards the end of the decade, but out of the three marks in North America, 

 

Jamie Bernthal Hooker (27:25) 

Great, thanks and Jason. 

 

Jason Benchapongwimon (27:26) 

I think if I had to bet, I would bet on Brazil for first deal in the water. Although it would be a pilot project. think their pilot project is quite advanced at this point. It's received its first preliminary environmental license, and it's got sort of state backing from the environmental legislator, Petrobras. And I think it could be constructed before the end of 2030. I think the first commercial project would probably be Columbia because their auction is ongoing. 

So, we could see action begin before 2030in Colombia as well. Chile would be maybe five years behind where these markets are. They have developer ambition. They have a nascent framework that needs regulation. And they have a roadmap in the works that is due by the end of 2025. So, I think we could see them pick up pace, maybe in the 2030s.  

My other market that I look after is Uruguay. And because the legislation is so closely tied to offshore oil and gas, I don't think developers are quite interested. There's also a mandatory green hydrogen aspect to it. You cannot sell the electricity, you can only sell the green hydrogen, which I think is probably putting off a lot of developers currently, as we're not too sure where offshore wind and green hydrogen development is going to go? Will there be such a large market for it that they can bank off this project? We don't know yet. 

 

Jamie Bernthal Hooker (29:00) 

That is a whole other conversation and a really fascinating one that we have had personally a couple of times. It is such an interesting area. Thank you both. I feel like we've scratched a surface in this conversation, which is interesting in itself. There's so much to look forward to in offshore wind and it's sometimes I hear people talk as if there's not going to be any more offshore wind in the Americas. 

And of course, it's important to say there's still a pipeline in the US and there still could be in the future. However, it's not going to be the offshore wind leader. But yeah, there's a lot going on in the Americas and it's in dialogue with this conversation that are happening in Europe. So, it's fascinating. Thank you both for coming on today and for keeping me company. 

 

Jason Benchapongwimon (29:49) 

Thank you for having us. 
 

Dan Wiseman (29:53) 

Yeah, thank you for entrusting me to come back and speak again. 

 

Jamie Bernthal Hooker (25:45) 

And thank you for listening. Reach out to us via 4C offshore.com or social media. Remember to subscribe to the podcast and join us next time as we unpack more from the world of new energy solutions. Goodbye.