Over the next decade, the UK and Germany will head Europe´s offshore boom, accounting for a total of around half of the installed capacity worldwide, Mühlenbach said.
But several policy bottlenecks could put the brakes on such a spectacular growth. One of the biggest problems is the lack of a coherent offshore transmission build-out policy.
Currently policy is decided on a project-by-project basis, and Mühlenbach said this approach will become increasingly inefficient as projects further out to sea are planned.
He also called for more incentive mechanisms to help get offshore projects established. In 2009 Germany and the UK improved their incentive systems, but more schemes are needed in other countries. Boosting investment in research and development, as well as
carrying out more feasibility studies is vital, Mühlenbach added.
Alistair Dutton of the UK Crown Estate predicted “very strong growth” in offshore wind capacity. “Last year it was all talk and this year it´s all about action”, he said. “There´s a surge in developer appetite, confidence is starting to build; it´s an interesting time to be in the sector”, Dutton said.
The European Wind Energy Association (EWEA) has a target of 40 GWs of installed offshore wind capacity by 2020. To reach that, a 28% annual growth in the market is required, starting today. 40 GW is an “achievable target”, Justin Wilkes of EWEA said. By 2030 EWEA´s target is for 150 GW of offshore generating capacity.
EWEA has launched a declaration calling on national governments and the EU to take action to resolve planning, grid and other obstacles to harnessing Europe´s enormous offshore wind energy potential.
Europe’s offshore wind potential is enormous and able to power Europe seven times over.
Huge developer interest
Over 100 GW of offshore wind projects are already in various stages of planning. If realised, these projects would produce 10% of the EU’s electricity whilst avoiding 200 million tonnes of CO2 emissions each year.
Repeating the onshore success
EWEA has a target of 40 GW of offshore wind in the EU by 2020, implying an average annual market growth of 28% over the coming 12 years. The EU market for onshore wind grew by an average 32% per year in the 12-year period from 1992-2004 – what the wind energy industry has achieved on land can be repeated at sea.
Building the offshore grid
EWEA’s proposed offshore grid builds on the 11 offshore grids currently operating and 21 offshore grids currently being considered by the grid operators in the Baltic and North Seas to give Europe a truly pan-European electricity super highway.
Realising the potential
Strong political support and action from Europe’s policy-makers will allow a new, multi-billion euro industry to be built.
Results that speak for themselves
This new industry will deliver thousands of green collar jobs and a new renewable energy economy and establish Europe as world leader in offshore wind power technology.
A single European electricity market with large amounts of wind power will bring affordable electricity to consumers, reduce import dependence, cut CO2 emissions and allow Europe to access its largest domestic energy source.
Offshore wind power is vital for Europe’s future. Offshore wind power provides the answer to Europe’s energy and climate dilemma – exploiting an abundant energy resource which does not emit greenhouse gases, reduces dependence on increasingly costly fuel imports, creates thousands of jobs and provides large quantities of indigenous affordable electricity.
This is recognised by the European Commission in its 2008 Communication ‘Offshore Wind Energy: Action needed to deliver on the Energy Policy Objectives for 2020 and beyond’. Europe is faced with the global challenges of climate change, depleting indigenous energy resources, increasing fuel costs and the threat of supply disruptions. Over the next 12 years, according to the European Commission, 360 GW of new electricity capacity – 50% of current EU capacity – needs to be built to replace ageing European power plants and meet the expected increase in demand. Europe must use the opportunity created by the large turnover in capacity to construct a new, modern power system capable of meeting the energy and climate challenges of the 21st century while enhancing Europe’s competitiveness and energy independence.
In March, at the European Wind Energy Conference 2009 (EWEC 2009), the European Wind Energy Association (EWEA) increased its 2020 target to 230 GW wind power capacity, including 40 GW offshore wind. Reaching 40 GW of offshore wind power capacity in the EU by 2020 is a challenging but manageable task. An entire new offshore wind power industry and a new supply chain must be developed on a scale that will match that of the North Sea oil and gas endeavour. However, the wind energy sector has a proven track record onshore with which to boost its confidence, and will be significantly longer lived than the oil and gas sector.
To reach 40 GW of offshore wind capacity in the EU by 2020 would require an average growth in annual installations of 28% – from 366 MW in 2008 to 6,900 MW in 2020. In the 12 year period from 1992-2004, the market for onshore wind capacity in the EU grew by an average 32% annually: from 215 MW to 5,749 MW. There is nothing to suggest that this historic onshore wind development cannot be repeated at sea.
By 2020, most of the EU’s renewable electricity will be produced by onshore wind farms. Europe must, however, use the coming decade to prepare for the large-scale exploitation of its largest indigenous energy resource, offshore wind power. That the wind resource over Europe’s seas is enormous was confirmed in June by the European Environment Agency’s (EEA) ‘Europe’s onshore and offshore wind energy potential’. The study states that offshore wind power’s economically competitive potential in 2020 is 2,600 TWh, equal to between 60% and 70% of projected electricity demand, rising to 3,400 TWh in 2030, equal to 80% of the projected EU electricity demand. The EEA estimates the technical potential of offshore wind in 2020 at 25,000 TWh, between six and seven times greater than projected electricity demand, rising to 30,000 TWh in 2030, seven times greater than projected electricity demand. The EEA has clearly recognised that offshore wind power will be key to Europe’s energy future.
Over 100 GW already proposed It is little wonder therefore that over 100 GW of offshore wind energy projects have already been proposed or are already being developed by Europe’s pioneering offshore wind developers. This shows the enormous interest among Europe’s industrial entrepreneurs, developers and investors. It also shows that EWEA’s targets of 40 GW by 2020 and 150 GW by 2030 are eminently realistic and achievable. The 100 or more GW is spread across 15 EU Member States, as well as three other European countries. The rewards for Europe exploiting its huge offshore wind potential are enormous – this 100 GW will produce 373 TWh of electricity each year, meeting between 8.7% and 11% of the EU’s electricity demand, whilst avoiding 202 million tonnes of CO2 in a single year.
In order to ensure that the 100 GW of projects can move forward, and reach 150 GW of operating offshore wind power by 2030, coordinated action is required from the European Commission, EU governments, regulators, the transmission system operators (TSOs) and the wind industry. Working in partnership on developing the offshore industry’s supply chain, putting in place maritime spatial planning, building an offshore electricity grid based on EWEA’s 20 Year Offshore Network Development Master Plan, and ensuring continued technological development for the offshore industry, are key issues. By 2020, the initial stages of an offshore pan-European grid should be constructed and operating with an agreed plan developed for its expansion to accommodate the 2030 and 2050 ambitions.
The future transnational offshore grid will have many functions, each benefitting Europe in different ways. It will provide grid access to offshore wind farms, smooth the variability of their output on the markets and improve the ability to trade electricity within Europe, thereby contributing dramatically to Europe’s energy security. We must stop thinking of electrical grids as national infrastructure and start developing them — onshore and offshore — to become European corridors for electricity trade. And we must start developing them now. The faster they are developed, the faster we will have a domestic substitute if future fuel import supplies are disrupted or the cost of fuel becomes prohibitively expensive, as the world experienced during 2008.
The future European offshore grid will contribute to building a well-functioning single European electricity market that will benefit all consumers, with the North Sea, the Baltic Sea and the Mediterranean Sea leading the way. Preliminary assessments of the economic value of the offshore grid indicate that it will bring significant economic benefits to all society.
Europe’s offshore grid should be built to integrate the expected 40 GW of offshore wind power by 2020, and the expected 150 GW of offshore wind power by 2030. It is for this reason that EWEA has proposed its 20 Year Offshore Network Development Master Plan. This European vision must now be taken forward and implemented by the European Commission and the European Network of Transmission System Operators (ENTSO-E), together with a new business model for investing in offshore power grids and interconnectors which should be rapidly introduced based on a regulated rate of return for new investments.
2010 will be a key year for grid development planning
The European Commission will publish a ‘Blueprint for a North Sea Grid’ making offshore wind power the key energy source of the future. ENTSO-E will publish its first 10 Year Network Development Plan, which should, if suitably visionary, integrate the first half of EWEA’s 20 Year Offshore Network Development Master Plan.
The European Commission will also publish its EU Energy Security and Infrastructure Instrument which must play a key role in putting in place the necessary financing for a pan-European onshore and offshore grid, and enable the European Commission, if necessary, to take the lead in planning such a grid.
The offshore wind sector is an emerging industrial giant. But it will only grow as fast as the tightest supply chain bottleneck. It is therefore vitally important that these bottlenecks are identified and addressed so as not to constrain the industrial development. Turbine installation vessels, substructure installation vessels, cable laying vessels, turbines, substructures, towers, wind turbine components, ports and harbours must be financed and available in sufficient quantities for the developers to take forward their 100 GW of offshore wind projects in a timely manner.
Through dramatically increased R&D and economies of scale, the cost of offshore wind energy will follow the same path as onshore wind energy in the past. The technical challenges are greater offshore but no greater than when the North Sea oil and gas industry took existing onshore extraction technology and adapted it to the more hostile environment at sea. An entire new offshore wind power industry and a new supply chain must be developed on a scale that will match that of the North Sea oil and gas endeavour, but one that will have a much longer life.
Offshore wind energy has been identified by the European Union as a key power generation technology for the renewable energy future, and where Europe should lead the world technologically. The support of the EU is necessary to maintain Europe’s technological
lead in offshore wind energy by improving turbine design, developing the next generation of offshore wind turbines, substructures, infrastructure, and investing in people to ensure they can fill the thousands of new jobs being created every year by the offshore wind sector.
To accelerate development of the technology and in order to attract investors to this grand European project, a European offshore wind energy payment mechanism could be introduced. It should be a voluntary action by the relevant Member States (coordinated by the European Commission) according to Article 11 of the 2009 Renewable Energy Directive. It is important that such a mechanism does not interfere with the national frameworks that are being developed in accordance with that same directive.
The decision by countries to perform maritime spatial planning (MSP) and dedicate areas for offshore wind developments and electricity interconnectors sends clear positive signals to the industry. Provided the right policies and incentives are in place, MSP gives the industry long-term visibility of its market, and enables synergies with other maritime sectors. Consolidated at European level, such approaches would enable investments to be planned out. This would enable the whole value chain to seek investment in key elements of the supply chain (e.g. turbine components, cables, vessels, people) while potentially lowering risks and capital costs.
2008 and 2009: steady as she goes
2008 saw 366 MW of offshore wind capacity installed in the EU (compared to 8,111 MW onshore) in seven separate offshore wind farms, taking the total installed capacity to 1,471 MW in eight Member States. The UK installed more than any other country during 2008 and became the nation with the largest installed offshore capacity, overtaking Denmark. Activity in 2008 was dominated by ongoing work at Lynn and Inner Dowsing wind farms in the UK and by Princess Amalia in the Netherlands.
In addition to these large projects, Phase 1 of Thornton Bank in Belgium was developed together with two nearshore projects, one in Finland and one in Germany. In addition, an 80 kW turbine (not connected to the grid) was piloted on a floating platform in a water depth of 108 m in Italy. Subsequently decommissioned, this turbine was the first to take the offshore wind industry into the Mediterranean Sea, which, together with developments in the Baltic Sea, North Sea and Irish Sea, highlights the pan-European nature of today’s offshore wind industry.
2009 has seen strong market development with a much larger number of projects beginning construction, under construction, expected to be completed, or completed during the course of the year. EWEA anticipates an annual market in 2009 of approximately 420 MW, including the first large-scale floating prototype off the coast of Norway.
By the end of 2009 EWEA expects a total installed offshore capacity of just under 2,000 MW in Europe. 2010: annual market passes 1 GW Assuming the financial crisis does not blow the offshore wind industry off course, 2010 will be a defining year for the offshore wind power market in Europe. Over 1,000 MW (1 GW) is expected to be installed. Depending on the amount of wind power installed onshore, it looks as if Europe’s 2010 offshore market could make up approximately 10% of Europe’s total annual wind market, making the offshore industry a significant mainstream energy player in its own right.