The wind industry in Germany is crying out for a policy framework that can help the country meet climate change targets – industry leaders have written to Chancellor Merkel to make their point
Wind industry associations and the German Engineering Federation are calling for a special tender of 2 GW of offshore wind capacity by the end of 2019 to help bridge a gap they say could drive more companies out of business and lead to further job losses in the industry.
Releasing figures about the growth in the size of the German offshore wind sector in the last 12 months, the Bundesverband Windenergie (BWE), Bundesverband der Windparkbetreiber Offshore (BWO), Stiftung der deutschen Wirtschaft zur Nutzung und Erforschung der Windenergie auf See (Stiftung Offshore Wind-Energie and power systems division of the German Engineering Federation) (VDMA) again warned that the government activity could grind to a halt because it has yet to put in place a framework that will enable activity offshore to continue once projects that are already authorised are completed.
In a 9 July 2019 letter to Angela Merkel, a copy of which OWJ has obtained, the BWE, BWO, VDMA, Stiftung Offshore Wind-Energie and Wirtsschaftsverband Windkraftwerke told the Chancellor that, since 2018, the wind energy market in the country had been subject to “severe shocks.”
The letter said the slowdown in the pace of construction on land and a potential standstill offshore were detrimental to the progress of the energy transition and to employment.
“Industry and trade are rightly calling for an acceleration in the expansion of wind power and photovoltaics,” said the letter “… but a reliable framework and ambitious expansion targets are necessary to ensure that investment is worthwhile again and jobs are secured.
“A gap in expansion from 2020 onwards is not acceptable in terms of industrial policy… and the special tender (which is written into the coalition agreement) needs to be implemented promptly.”
In June 2019, the BDEW, the leading lobby group for the energy industry in Germany, reiterated its view that the country needs a lot more offshore wind – and solar power – if it is to meet its 2030 renewables target. It is proposing that Germany’s current target for offshore wind capacity, 15 GW, should be increased to at least 17 GW. Other groups like the BWO, BWE and Stiftung Offshore Wind-Energie have proposed that offshore wind capacity be increased to around 20 GW.
The Stiftung Offshore Wind-Energie also wants the government to commit to targets of 20 GW by 2030 and 30 GW by 2035. Commitments of this type may yet be forthcoming from the German Government, but the problem is that the last German auction for offshore wind was in April 2018 and a special tender of circa 1.5 GW of capacity that seemed to have been agreed did not materialise.
BDEW board chairman Stefan Kapferer said higher targets for offshore wind and solar PV make sense for a number of reasons, not least because they would allow more time for the debate about onshore wind in the country to be addressed.
As he explained, the debate about Germany’s offshore wind target is taking place amid significant wider developments in the government’s approach to onshore wind and permitting.
A public acceptance working group has been created by the government to look into expanding onshore wind but the government is unlikely to agree on any changes to the offshore target until the onshore volumes and acceptance rules are settled, which may not be until 2020.
Unless the government responds to the demands of industry associations, the next tender for offshore wind will not take place until 2021, which would mean there would be what BWO spokesperson Tim Bruns said would be “a big gap” between completing projects already underway and new ones resulting from the next tender.
“We could have three years without expansion,” said Mr Bruns. “That might not affect large corporations that are active in the offshore wind industry that have activity overseas that will help them ride out a downturn in the domestic market, but for lower tier companies further down the value chain it could be very, very difficult.”
Thousands of jobs in the offshore wind supply chain have been lost in the last three years alone, but Germany has an opportunity to put offshore wind back on track in its National Energy & Climate Plan for 2030. As highlighted above, the plan currently envisages only 15 GW of installations by 2030, although WindEurope believes that Germany could comfortably deliver 20 GW and a higher volume still by 2035.
A report from wind: research highlighted the fact that, “following major advances in recent years the industry is currently at a crossroads… The industry in Germany is in danger of stagnating… limiting future expansion will have an adverse effect on many companies in the supply chain, and on their employees.”
In contrast, wind: research claimed, if targets are raised, expanding offshore wind energy capacity to a level that would enable the federal government to meet 2030 targets would generate thousands of additional jobs.
If Germany was also to develop power-to-gas technology – which would help get around problems with grid capacity, which have long been a bottleneck in the industry – the number of people employed in the sector could be higher still. Compared to the status quo, with up to 8,000 more jobs lost in the industry, a power-to-gas scenario modelled by wind: research would enable Germany to achieve 40 GW of capacity by 2035, with as many as 35,000 people employed in the sector compared with around 24,000 now.
The BWE, BWO, VDME and Stiftung Offshore Wind-Energie cited a study of the grid in Germany published in June by WP&More Consulting and law firm GGSC that showed that grid connection issues need not slow down the expansion of renewable energy in Germany, although it suggested that the government give priority to the expansion of the grid – as provided for in transmission system operators’ grid action plans. They also recommended that the government promote power-to-X or ‘power-to-gas’ solutions.
Mr Bruns said some of the politicians involved in framing climate and energy policy in Germany, including Thomas Bareiss, state secretary in the federal ministry of economic affairs and energy and Andreas Feicht, another state secretary in the ministry whose remit includes energy have made encouraging statements about boosting targets for offshore wind, but there is no policy yet.
With summer break in effect, advocates of offshore wind and of wind energy as a whole are not hopeful that a policy framework will be in place any time soon, despite intense pressure from the renewable energy lobby and high expectations of a Climate Cabinet that is due to make recommendations about how Germany might meet climate targets this September.
“We welcome the fact that the Climate Cabinet has set itself the task of implementing cross-departmental measures in the Climate Protection Plan 2050,” said the industry associations. “To achieve the climate targets, binding targets for individual sectors are necessary. We expect quick decisions and measures to limit the damage caused by the expansion gap and a rapid increase in the expansion path for wind energy, without which Germany will not meet climate targets.”