The European Commission is set to present its offshore wind strategy in October
Europe is already a global leader in the sector, with many European firms exporting technology and know-how to markets including the US and Asia. Upcoming initiatives are poised to boost the sector’s development further and build on cost reductions.
Offshore wind is also set to play a key role in helping the European Union meet its Green Deal objectives, with the European Commission assessing that between 240 GW and 450 GW of capacity will be needed by 2050 to ensure temperature rises remain below 1.5˚C.
According to industry association WindEurope, in 2019 the European Union’s cumulative installed capacity amounted to more than 22 GW, of which nearly 10 GW is in the UK. In the EU 27, the largest installed capacity – 7.5 GW – was in Germany, followed by Denmark, Belgium, and the Netherlands.
In particular, offshore wind could be a significant element in the decarbonisation of the bloc’s more coal-reliant economies, such as Germany and Poland. Both are endowed with large resources of offshore wind potential in the North and Baltic Seas. Arguably, both countries would welcome EU support to their green transition.
What is more, there is potential for international projects in the Baltic to be jointly promoted by both Poland and Germany, as the latter is already doing with Denmark.
Germany recently raised its 2030 target from 15 GW to 20 GW and, as Germany just assumed the presidency of the European Union, it is expected that the country will push for the creation of a holistic international framework for the development of offshore wind.
In its National Energy and Climate Plan, Poland has identified offshore wind as a crucial technology to reach its 2030 renewable targets. The country, which currently has no offshore windfarms installed, plans to install 3.8 GW by 2030 and 28 GW by 2050.
In January 2020, the government released a draft offshore wind act that provides a contract for difference (CfD) similar to the one adopted in the UK. France, where the market has been slow to take off, has ambitious targets, planning for between 5.2 GW and 6.2 GW due to be operational by 2028. Offshore wind also has potential, though more limited, in the Mediterranean Sea, where Italy is currently building its first asset in the southern region of Apulia.
The upcoming strategy is likely to focus on the integration of offshore wind into the long-term strategy of the European Commission to achieve by 2050 a climate-neutral economy within the framework provided by the Paris Agreement.
We think it likely that any strategy will encourage cross-country projects, such as the energy islands of the type agreed by the Danish Parliament in June. This concept reinforces the ability of EU countries to share power generation. Flexibility of resources and interconnection is already a key EU goal for the power sector.
The energy islands are also, in the longer term, proposed to include hydrogen production capacity, again a key goal for the EU. Germany is already conscious that its transmission system cannot make use of much more offshore wind capacity and is looking to green hydrogen production to absorb power and convert it into a vector offering easier long-term storage and transport potential.
One of the key topics that some key stakeholders would like to be addressed in the strategy concerns the sustainable management of maritime space. Today, one of the main obstacles to the development of offshore wind is represented by permitting and planning, as often water areas are reserved for fishing or are not suitable due to military or environmental reasons. This has been demonstrated in US waters, where permitting for early large-scale deployments has been delayed by negotiations regarding fishing and shipping lanes.
Other important issues likely to be addressed in the strategy concern how to further secure Europe’s industrial and technological leadership in the sector. This point is likely to be more important than ever in the post-Covid-19 environment, as the creation of new jobs in the offshore wind industry could contribute to the economic recovery.