Hello everyone. I'm here today to provide an update of Hexicon's developments and plans, as well as providing an insight into the world of floating offshore wind, an industry forecasted in exceptional growth. My name is Marcus Thor, and I'm the CEO of Hexicon. Welcome. The agenda for today is to first present a brief of both floating wind as a segment and Hexicon as a company. This will be followed by an operations update and then ending with a look ahead. Let's get to it. I'd like to start to outline the case for floating wind in general. On our quest towards net zero emissions, the by far most important task is to transform the energy production.
The challenge here is to deploy renewable power at the significant scale that is needed, and doing that in a way that people, industry, and nature can coexist. It's in this context that floating wind makes perfect sense and why I'm sure that floating wind will need to be a significant part of the future global energy mix. Using floating technology, there's virtually an unlimited resource. Of the total global offshore wind potential, some 70%-80% is estimated to lie in waters deeper than 60 meters. Using floating systems, one can be more flexible in siting projects, not constrained by water depth, and as such, place them further offshore. This means higher average wind speeds and more stable winds, all in all, increasing capacity factors.
The floating turbines installed to date have recorded capacity factors up to twice that of onshore wind. The increased flexibility in siting floating wind projects further increases the possibility of avoiding impacting the environment, being out of sight, and ultimately enabling sustainable coexistence with other maritime stakeholders such as fisheries, commercial shipping, the military, and so on. Lastly, floating offshore wind holds all the prerequisites to effectively be industrialized. I believe that the 10 or so years that it took commercial projects of fixed-bottom wind to hit a more substantial decline of cost will be shorter for floating wind. There's a tremendous growth expected for floating wind, and we are right now seeing a race to secure suitable seabed in attractive markets.
To briefly just put floating wind status in perspective, there are over 10,000 turbines installed globally on the seabed, while there's not even 20 full-scale installations on floating foundations. I'm sure there's a window of opportunity right now where there are new markets popping up on a monthly basis that are such markets that are not yet fully regulated, meaning that one can secure seabed through bilateral applications to regional or central authorities. These are the type of markets where we've been typically active in, securing seabed ahead of legislation, just like we did well-timed in South Korea, as an example. Over time, I believe, however, that more and more markets will go towards being fully regulated through high-priced auction schemes. In parallel to securing seabed rights in unregulated markets, we are also establishing a slightly tweaked business model for regulated markets.
This, in a nutshell, is that Hexicon complements our generic skill set in Stockholm with the local skill set needed to come out on top in such a bidding process locally. This skill set is then offered to parties capable of participating in such auctions in return for a slice of a project. The U.S. is a great example of such a market where we are adopting this strategy. As seen on this slide, for the next few years, it is projects of a few hundred megawatt that will come online when we talk about floating wind. During the H2 of this decade is when we'll also see gigawatt projects. Here, our project in South Korea with Shell, the MunmuBaram project, is one of the first. On to Hexicon.
I'd like to view Hexicon as an enabler and accelerator of this shift into floating offshore wind. Hexicon is both a project developer and a foundation technology provider for deep water offshore wind. We focus on the origination and early stage developments of projects for high value creation, and we do this in a partnership model with both local and industry partners. We have our own IP for a dual turbine floating foundation, the TwinWind, which enables an efficient energy production in deep waters and with minimal footprint. Now, these two legs of our business model provide independent revenue streams, but at the same time being synergistic. Projects provide an opportunity to install the technology, and having our own IP opens markets and project opportunities.
It's, in the short term, it's a value increase of the project portfolio that will contribute most to the value build of Hexicon. This will then over time change to more coming from the technology offering as this matures and is implemented in greater volumes. In our vision for 2025, floating wind is an important part of the energy mix, and Hexicon has capitalized on our early mover position and evolved to a leading player within this sector with a tested technology that is the obvious choice for developers. By 2025, we aim to, for projects, have revenue generating operations in the three key offshore wind regions being Europe, North America, and Asia. For technology, have gone through the technology roadmap to the point where the TwinWind is verified and tested with all benefits confirmed.
On the financial front, for Hexicon's entire operations to be EBITDA positive. This is forecasted to be achieved by 2025 from project divestments only. The key building blocks to get us there are to continue to work with best-in-class partners, mature, optimize, and scale the technology, getting it in position for serial fabrication, and enhancing the organization to be able to capture the value potential of this growing industry. To describe where Hexicon is in its development, I'd like to see Hexicon's journey split in three phases. There is a first phase of mainly investing to grow a meaningful portfolio. The second phase is when having reached a diversified portfolio, especially in terms of maturity, to then also start realizing sizable divestments and as such, recycle capital. Lastly, the third phase of also having the technology verified.
We are right now at the very end of the first phase, transitioning over to the second. In fact, in parallel to pushing forward certain projects through some near-term milestones, which I'll come back to in a few slides, we are preparing for selected divestments as well. What this slide shows is the typical value enhancement curve across the development of a project. Hexicon acts from inception through the development phase where the relative value increase is the greatest. At which timings projects are later divested will be decided on a project-per-project basis. As mentioned in the previous slide, we are now at a point in time where our portfolio is well spread across this development phase marked in light blue here on this figure, which makes us plan for not only investments, but also meaningful divestments across the near term.
On to our technology, the TwinWind, which is essentially a triangular-shaped floating steel structure that carries two large wind turbines. It's moored through a turret at the front corner, which is a standard component from the oil and gas industry, and it's basically just a big bearing. This allows the complete unit to freely rotate with the wind direction around that point. That then ensures that the two turbines do not disturb one another. This is a key feature enabling the use of two turbines on the same structure and the key part of our IP. What two turbines on the same structure entails is that we can install more power in a given area compared to the competition, which reduces costs as well as further increases the possibility of coexisting with other stakeholders as we're occupying a smaller area.
Ultimately, our two main design drivers are, one, the lowest possible cost of energy, and two, the lowest impact on the environment and surrounding activities. The TwinWind is completely agnostic to the supply chain, including turbines, and it's fully scalable to the largest of turbines. On to an update of our own operations. I'll start by summarizing the quarter in three different themes. One, the general geopolitical landscape, as well as specific events such as Nord Stream sabotage, continue to affect the way we look at energy supply, and especially the importance of energy independence, which calls for growth in domestic fossil-free energy sources. The second theme, we've been very active in pushing forward along our technology roadmap. As communicated earlier, the government support win in the U.K. triggered an overview of both technology projects.
That is both the TwinWay project in Norway and the TwinHub project in the U.K. The decision is now made to focus on the TwinHub project in the U.K. only. Here we have syndication efforts ongoing for an operation start in 2025. The TwinWay demonstration project in Norway will therefore discontinue. A few main reasons are that the version of the TwinWind technology that we are proving is of larger commercial size in the U.K. when compared to Norway, so it proves more. Secondly, the government subsidy secured entails revenue for the U.K. project over 15 years. Three, the METCentre test bed area, and that's where the Norwegian project was planned to be installed, and this is independently run by Norwegian authorities, and they've suffered some time delays. This has reduced the one clear advantage of Norway was for shorter time to installation.
I'm going to come back and dig into this a bit more later. As a third theme for the quarter, we have during the period, made considerable investments into our core projects, specifically the MunmuBaram project and TwinHub. This was an exceptional period in terms of investments, and it's really about positioning ourselves ready for the next phase and getting us to the next phase sooner. Additional investments on top of MunmuBaram have gone into the TwinHub. That's to obtain the definition and packaging that we deem necessary to close the syndication of funding partners, as well as confirming the supply chain and getting technical work streams to a mature level. In this context, we already during the quarter as well, confirmed and communicated the preferred wind turbine supplier being Mingyang. Here's our portfolio of projects and prospects.
The distinction between a project and a prospect is made by a number of criteria, the main one being site control. Below the table, I've provided both the gross and net numbers, and the reason for both being of interest is that the gross numbers reflect the potential volume of future technology sales, while the net relates to how much revenue can be achieved through project divestments. It's within this portfolio that most of our efforts go to, as well as where most of the company value sits and most of the forecasted near-term revenue will come from. Notably here is that two sites totaling just over 2,500 megawatts in Italy are since last quarter matured from being prospects to projects. Mainly as for these we've recently secured site control.
Overall in the prospects list, we have progressed well in further defining such opportunities, and most of them have progressed through the typical early works, such as site selection, establishing a plan to site control, and permits, and to get that plan underway. I'll do a little bit deeper dive into just some of the key projects. In South Korea, we're together with Shell developing what is targeted to be the largest floating wind farm in the world. It will be roughly 1,300 megawatts and located outside the industrial city of Ulsan on the East Coast. This project is well advanced with wind and seabed surveys completed and its so-called electricity generation business licenses in place for the full project.
This project targets a final investment decision in early 2025, and a key near-term milestone is to get into a grid connection agreement with the country's transmission system operator, KEPCO. It's quite fascinating how this project has grown. When we started this project in late 2018, we ramped this up with a handful of people at Hexicon and another five, seven or so in the Korean team. I lived there for the first year to ramp things up. Over time now, as Shell continues to invest in this project, they also add resources to it. Today, Shell has over 30 full-time equivalents in this project. Worthwhile mentioning as well is that South Korea is the only country in the world that pays more for electricity the further off the coast projects are and also the deeper the water is.
This is a way by the Korean government to promote projects further off the coast and as such, avoid conflicts with other maritime stakeholders such as fisheries and shipping, because these activities are typically more intense closer to the shore. In Sweden, we're working together with Aker Offshore Wind, or as of recently named Mainstream Renewable Power, through the 50/50 joint venture Freja Offshore. We're developing multiple sites in Southern Sweden, both on the east and west coast. Three of our projects here are currently in the Environmental Impact Assessment stage following the successful completion of general consultations. If we look at Sweden's net zero target by 2045 and the electrification of industry along the way, that calls for a range of opportunities to supply electricity from floating wind. Examples through commercial PPAs to produce hydrogen and to the grid.
Now, projects in Sweden will, however, take some time, but we're pushing quite hard forward, especially on the permitting work stream to submit the first permit application to the new government shortly after the new year. One thing is sure, in my opinion, and that is that Sweden will, over time, need many different fossil free energy sources, and that offshore wind needs to be a part of it. Especially worth noting is that offshore wind projects, whether that's floating or fixed, can be built in a relatively short time. We're talking about two to three years. Over to Italy, which is a rapidly growing market with very high ambitions. Italy, as opposed to Sweden, but similar to Korea, Italy offers a process where one, through bilateral applications, can secure water rights early in the process.
There is still definition needed in the overall legislation, but the prerequisites for a large floating wind market are here. Italy has clear offshore wind targets and almost solely deep waters, which means that it needs to be floating. We are here working together with Avapa Energy, a local onshore renewables developer who's taken the step offshore with us. Here we've managed to recently secure site control for two large areas, in total, just over 2,500 megawatts, and we expect additional sites to be secured in the very near term. Onwards, this is one of the projects where we're actively considering bringing in additional suitable partners to either our joint venture or individual projects. Now onto the TwinHub project.
This project was originally developed for wave power, and after years of development, the owners couldn't get that to work and decided to re-permit the site for floating wind and sell. Last spring, after thorough due diligence, Hexicon bought the site, including permits and the electrical infrastructure already in place. Our aim was clear. It was to reach the level of maturity and comfort needed to bid into this year's auction for the U.K. tariff scheme named Contracts for Difference. That would, for the first time, have an allocated budget for floating wind. That meant that we still had work to do. We needed to get a last and final permit for the project, a so-called marine license that was achieved early last year.
We needed to run quite a lot of technical work and engage with the supply chain to ultimately determine how low we would be able to bid. This work has been a key focus during the past year, and we were absolutely thrilled when the results were announced in early July. The TwinHub project was the only floating wind project to be awarded funding through the CFD scheme. The scheme works in such a way that the project will receive a fixed amount of revenue for every megawatt hour it produces over 15 years. With the offtake confirmed, a thorough review, again, of both the TwinHub project and the Norwegian TwinWay project was conducted. As mentioned earlier, the decision is now made to focus our efforts on TwinHub only.
The three main criteria of this decision are, one, what do we verify? Well, the UK project contains larger platforms with larger commercial turbines when compared to the single unit in Norway, which means that it can be directly replicated to commercial projects. Adding to that is the location of TwinHub in the most mature offshore wind market in the world. Secondly, economics. The government-supported revenue over 15 years makes TwinHub in the U.K. a more financially attractive project. Lastly, schedule. This was a key argument in favor for the Norway project. However, during the year, METCentre has suffered certain delays and, again, METCentre is a test bed area of which we have a slot in.
It's run independently by Norwegian authorities, and this delay, which is out of our control, has led to that advantage in time of Norway when compared to England now having been reduced. The wind in U.K. shifts our efforts now towards TwinHub, and we're pushing forward with predominantly design and engineering here, and some other technical work streams, as well as finalizing the supply chain to be involved. I do expect to be able to announce new partnerships during the coming months, all in all, to advance this project towards FID next year. Now lastly, just ending by looking ahead. As we're entering the next phase of our developments now, with a diversified portfolio in terms of maturity, we'll prepare for selected planned divestments within the portfolio to start recycling capital towards additional greenfield developments, and that's really where our core skillset lies.
We'll continue to push the TwinHub project forward, including working through this indication with funding partners. Lastly, want to mention that with an organization that have now grown recently, we now finally complete management team in place as well, the focus entering the next phase is to allow that organization to settle in and streamline it for maximum output. With that said, I'd like to say thank you for listening and now welcome questions. Thank you.
Thank you so much, Marcus, for that presentation. Let's head into the Q&A session. We've received some questions during the presentation. Starting off with one focusing on the TwinHub project and the recent supplier there. Why do you work with a Chinese supplier when there are European players who are world leaders in the field?
Good question. There's I guess in some way several answers to that, and several aspects, pros and cons. If you compare. First of all, there's many different Chinese suppliers and some of them have come quite far if you talk about adopting Western standards when it comes to health and safety or quality, et cetera. Mingyang is one of the really top ones in that field, and we've seen various types of audits on both Mingyang and some other Chinese suppliers as well in the past, so that aspect we feel fairly comfortable with. Secondly, Mingyang is a company, again, comparing to the three large ones, General Electric, Siemens, and Vestas, that is more aggressively pushing for a market position in not the least Europe.
That makes them more open to, as one concrete example, to work with us engineering-wise to optimize the complete system. We won't get that to happen, at least not in the earlier small-scale projects, with the likes of Vestas. Mingyang would then, you know, open up and work together with us on engineering, optimizing the system, because there's no point in optimizing a tower separate from a foundation from a mooring system, so it all needs to work as one, and here they're putting in a lot of efforts in this project.
All right. One more about the TwinHub project. Can you explain the revenue support confirmed for TwinHub, and especially please comment on any risk with current inflation rates?
Yes, absolutely. That's quite interesting where it is right now. The revenue support confirmed for 15 years is actually indexed to inflation. There's definitely a cost element that runs the risk of higher cost as inflation grows, but there's an increase in revenue at the same time, and these more or less balance each other out. Now, on top of that, and especially in the U.K. where this project is, we're actually seeing right now and forecasted over the next few years, electricity prices that are higher than what we want the CFD level at.
We're looking at actually pushing the start of those 15 years of the government support revenue ahead as far as possible to just go merchant price for the first few years, because right now it's forecasted to be higher than the CFD.
All right. Some media outlets claim that we might need to raise more capital already this year, ahead of the prognosis. Is that true?
Well, first of all, I think in relation to this, the past quarter was investment heavy, and purposely so. It was to position ourselves and the portfolio ready for the next phase. The next phase will include meaningful divestments, which are already planned.
Worth noting is that the investments made in Q3 does not in any way represent the standard level going forward. On the contrary, it position us to sooner get into phase II, so it was an exceptional quarter in that aspect. To get us to the next phase, we are right now considering best options to do that, and in a way that is as good as possible for all existing shareholders. This I feel comfortable in, and it will be communicated shortly.
One question here about the projects. When do you expect the projects that Hexicon is currently running to make a profit?
Well, it's different from. The projects as such makes a profit when they start selling electricity. Hexicon's business model is shorter than that. We make a project when we feel the right timing is there, where we've increased the value to certain multiples from compared to the cost we've put into them to sell. This is my point with these phases, is that we're right now at the end of what we define to be phase I, which is mostly investments, and now we're getting to a point where it's a diversified portfolio, different maturities in it, to then start also into next phase, start divesting. That's the core revenue model for Hexicon in project developments is linked to the project value increase during mainly the development phase.
The early stage.
Early is where our core skill set lies. That's where we add most value ourselves.
Yeah.
It's a model that, you know, works from start to FID. It's not into construction.
Yeah.
It's different. That's our business model, which is different from the project, and they make money when they start selling electricity, of course. That's a whole nother type of playing field, because then you need to go through construction phase, which typically for gigawatt projects, we're talking $ billions.
Yeah. A long question here. About a month ago, the Pentland Project in Scotland, where you have a minor share of 10%, has selected Stiesdal Offshore's TetraSub as the floating foundation technology. Could you provide some information about the reason why the Pentland consortium has not chosen Hexicon's TwinWind technology?
Yes, absolutely. It's a very good explanation. Step back a bit. If we take the leg of our business model being project developments, we have basically one choice to make out of two options. Either we go with all our eggs in one basket, develop one project all through all the definition, package it with our technology, and then invite investments. We could do it with our technology, because you have all the definition there. The other alternative is to go as broad as possible, many projects. To be able to do that, we need investments early. Investments early before all the definition is in place will not commit to a technology. These big balance sheets, oil majors, developers, et cetera, they are fundamentally technology agnostic. We chose the latter.
To grow a meaningful portfolio as quickly as possible, what then that means that it won't necessarily be for all projects our technology. In parallel, it's our job, of course, to mature the technology as quickly as possible, get it ready to be used for projects. The specific Pentland Project is one that will make its technology decision about now, meaning that we haven't verified it, we haven't installed it in full scale, and to request that someone then puts a, you know, order of even 100 megawatt, which is a big sum of money on an unproven technology, that's not the bet here. The bet is long-term. The bet is that it is competitive, which is also why we're not requiring it for all projects, because then we wouldn't be able to grow the project portfolio to the large extent.
Once it's verified, get the benefits confirmed, and then it'll be used.
Thank you so much, Marcus. We're running out of time. We didn't get to answer all of your questions, but thank you so much for now.