Despite increasing critique of the ‘cash bid’ approach, several offshore wind markets continue to award seabed rights based on willingness to pay. This means that lease prices are a large part of the entry costs into many markets.
Aegir Insights just released an addition to its comprehensive Auction Intelligence: The Offshore Wind Lease Price Benchmark enables clients to get an overview of the relative levels of lease prices over time and markets. We help our clients cut through complexity by cleaning and normalizing all data, and providing it in a simple and interactive benchmark.
In Aegir Insights’ Lease Price Benchmark, clients can compare the lease prices from auctions in nominal and present value terms, where inflation and the time-value of money is accounted for. Comparing two auctions across markets in present value terms instead of nominal terms can change the picture drastically.
Taking the New York Bight and 2023 German auctions as example, for the New York Bight, the lease prices are higher in 2024 present values than in nominal terms, as the leases had to be paid for in full immediately. Meanwhile, the German lease prices, which look outrageously high in nominal terms, become lower in present value terms, as 90% of them are paid years into the future when inflation has lowered the real value of the agreed payments.
Therefore, the prices paid in the New York Bight and Germany lease auctions in present values are much closer than they first appear.
Aegir Insights' Auction Intelligence
With Aegir Insights’ Auction Intelligence, you’ll get visual overviews of coming offshore wind auctions, quick and sharp takeaways on auction developments, and now an overview of lease prices paid globally.
Interested in learning more about Aegir Insights’ auction intelligence package and the newly launched Lease Price Benchmark?