Offshore Wind Farm Development: Contractual Structures, Risk Allocation and Regulatory Challenges with a Focus on Croatia

Abstract

Offshore wind farms combine engineering ingenuity with complex legal frameworks that must endure harsh marine conditions and intricate international contracts. They are built upon advanced technology, significant market potential, and precise legal regulation, spanning national laws and international standards. While countries like the UK, Denmark, Scotland, and Germany rapidly expand their offshore capacities, Croatia is just beginning to explore this renewable energy frontier. This article examines the contractual landscape for offshore wind farm construction, focusing on contract types, including EPC, turnkey, multi-contracting, and project contracts, as well as risk allocation strategies and the intersection of private contract law with public regulatory frameworks. Drafting of such contracts includes analysis of technical, market, and legal considerations relevant to offshore wind projects. Multi-contracting models dominate in this field, due to the high-risk nature of offshore developments, emphasizing meticulous risk allocation through negotiations concerning force majeure, interface risks, liability caps, and performance guarantees. The article recommends that Croatia establish a specialized offshore wind regulatory framework, adopting best practices from EU countries and standardized contract templates like the FIDIC model contracts. Clear regulatory structures and robust contract management are vital to attracting investment and ensuring successful offshore wind project implementation.