Energy Transition · Offshore wind

What flows through an offshore wind farm, and how it pays

Wind turns the turbines; the power runs through array cables to an offshore substation, down the export cable to shore, and onto the grid. Generation rides the load factor, and revenue splits between price-stabilised contracted (CfD/PPA) income and volatile merchant sales. Near-zero running cost means very high margins, but cash flow depends on the wind and the power price. Adjust the drivers and watch it build EBITDA and value.

45%
£75
70%
LIVE
Generation power flowing to shore Contracted £ CfD / PPA (stable) Merchant £ wholesale (volatile) Operating cost
Flows, annualised from current assumptionsper year
Revenue p.a.
£0
£0 / hr
EBITDA p.a.
£0
0% margin
Revenue / MWh
£0
blended capture price
Generation p.a.
0
0% load factor
Stocks: what the flows accumulate intolive
Output now
0
live, of 1,200 MW capacity
EBITDA banked · session
£0
accumulating in real time
Implied enterprise value
£0
at 12× EBITDA
The two tills: contracted vs merchant Total £0 p.a.
Contracted
Merchant
Why investors watch the split: contracted revenue (a CfD or corporate PPA) is price-stabilised and low risk; merchant revenue rides volatile wholesale power prices, with more upside but more risk. The contracted share is the core risk/return dial, and generation depends entirely on the wind.
Revenue streams£0 p.a.
Operating costs£0 p.a.
Investment case: should you buy it?DCF returns

Year-1 financials flow live from the simulation above: revenue £0 and EBITDA £0 p.a. Set your deal terms below and the unlevered IRR (asset return) and levered IRR (return to equity, after debt) recompute instantly.

Operating

%
%
%
%
%
%

Valuation & hold

×
×
y

Financing

×
%
%
Unlevered IRR
—
asset / project return
Levered IRR
—
return to equity
Equity multiple
—
MOIC over hold
Equity gain
—
exit equity − invested
Equity cash-flow profile£m · ■ invested   ■ returned
Projection, £m per year

Illustrative model. Represents a ~1.2 GW offshore wind farm operating 24×365. Revenue = generation × price, with a contracted share sold at an indexed CfD/PPA strike (~£60/MWh) and the balance sold merchant at the wholesale power price. Near-zero running cost; opex is largely fixed (O&M, seabed lease, transmission, insurance). EBITDA = revenue − operating costs. The investment case is a simplified DCF: unlevered IRR discounts free cash flow to the firm (EBITDA − cash tax − capex) plus an exit on the EV/EBITDA multiple; levered IRR is the equity cash flow after debt drawn at entry, interest and amortisation. Excludes construction, transaction costs and refinancing. For illustration only, not investment advice, and not any specific asset.