Despite Covid-19, Europe confirmed a record €26.3Bn (US$31.8Bn) of investment in new offshore windfarms in 2020
This will finance 7.1 GW of new offshore wind which will be built in the coming years. Last year Europe built 2.9 GW of new offshore wind. Europe now has 25 GW of offshore wind capacity. The EU aims to have 300 GW by 2050.
The UK, Netherlands, Germany and France all saw final investment decisions for large-scale offshore windfarms.
WindEurope chief executive Giles Dickson said, “€26Bn in new investment is a huge vote of confidence in offshore wind. Investors see that offshore wind is cheap, reliable, and resilient – and that governments want more of it.
“And these investments will create jobs and growth. Every new offshore wind turbine generates €15M of economic activity. We expect the 77,000 people working in offshore wind today in Europe to be 200,000 by 2030.”
Installing 2.9 GW of new offshore wind capacity in 2020 was in line with WindEurope’s pre-Covid-19 forecast.
“The new installations show the resilience of the offshore wind industry. Europe’s existing offshore windfarms kept operating. We kept building new windfarms. We kept making new turbines,” Mr Dickson said.
Nine new offshore windfarms came online across five countries. The Netherlands connected 1,493 MW and completed the development of the Borssele Wind Farm Zone. Belgium connected 706 MW, the UK 483 MW and Germany 219 MW. Portugal completed the installation of a floating offshore windfarm, co-funded by the EU’s NER300 programme.
Europe now has 116 offshore windfarms across 12 countries with 40% of the capacity in the UK. But new players are entering the scene.
France will finally start building its offshore windfarms after final investment decisions on 1 GW which will be built by 2023. It is also planning four small floating offshore windfarms and this year will tender a large floating offshore windfarm.
Poland passed a historic Offshore Wind Act and aims for 28 GW of offshore wind by 2050. Additionally, it initiated an agreement among all eight Baltic countries to co-operate on offshore wind.
Greece is about to adopt plans for the build-out of offshore wind. And the three Baltic States – Estonia, Latvia, and Lithuania – are all developing projects.
“Offshore wind is no longer just about the North Sea,” said Mr Dickson. “It’s rapidly becoming a pan-European affair. More and more countries are making commitments on it. Poland, Spain, Greece, Ireland, the three Baltic States all have plans. And the rapid advance of floating offshore wind will help the build-out in the Atlantic, Mediterranean and Black Sea.”
Offshore wind technology continues to evolve. The average size of the turbines installed last year was in excess of 8 MW. 2020 saw big orders for GE’s 13 MW GE Haliade-X turbine. And Siemens Gamesa announced a new 14-MW turbine. New offshore windfarms now deliver capacity factors in excess of 50%.
The EU Offshore Renewable Energy Strategy that the EU Commission tabled last year was a milestone. It mapped out the regulatory framework for the expansion of offshore wind development and set a target of 300 GW offshore wind for the EU by 2050, 25 times more than what the EU has today.
“It is excellent that many more countries have now committed to contracts for difference (CfDs) as the financing model for offshore wind,” Mr Dickson said. “It is cheap for governments: they pay out and get paid back depending on market prices. And it significantly reduces financing costs which means lower bills for energy consumers. The UK, Denmark, Poland, France, Ireland, and Lithuania will now all use CfDs. And Germany dropped its misguided plans to bring in a very different system.”
In 2020, six major power purchase agreements (PPAs) from offshore wind were signed. This shows the corporate demand for clean offshore wind energy. New PPA deals came from different sectors of the industry and included the large corporate off-takers Nestle, Amazon, Deutsche Bahn, Borealis and Ineos.
“We now need a comprehensive legislative framework for hybrid offshore wind projects, improved maritime spatial planning and streamlined permitting procedures to unleash the full potential of Europe’s offshore wind,” Mr Dickson concluded.