Beefing up offshore wind to meet the European Commission’s expected 300GW goal by 2050 will require large-scale investment in ports, grids and the supply chain, according to trade group WindEurope.
The Commission’s Offshore Renewable Energy Strategy, to be launched later today, is expected to envision EU offshore wind capacity growing to 60GW by 2030 from 12GW currently, and rising to 300GW by mid-century.
WindEurope said the European wind industry is ready to deliver, but warned “huge investments are needed in offshore grid connections and also in the reinforcements of onshore grids”.
Ports alone will require €6.5bn of investment over the next 10 years, the trade body said.
Offshore wind will become the number one source of electricity that Europe consumes by around 2040, under the Commission plans.
The strategy is also expected to consider maritime spatial planning issues and provide an enabling framework for offshore wind farms connected to two or more countries.
WindEurope said such an enabling framework for ‘hybrid’ offshore wind farms linked to more than one country needs to implemented as soon as possible.
WindEurope chief executive Giles Dickson said: “This is a very good strategy. It confirms the vision for offshore wind to be Europe’s number one source of electricity.
“It’s also spot on in recognising the necessary investments to deliver that – in grids, ports and the supply chain.
“And it identifies all the right policies that will drive those investments: industrial policy; state aid rules; and the mechanisms to ensure predictable revenues for offshore wind farm developers at least cost to society.
“Offshore wind is cheap now but it requires high upfront investments. So minimising financing costs is crucial to keeping overall costs low. Revenue stabilisation is central to this.
“If banks see stable revenues they lend at low interest. And the Contract for Difference, which many countries are now using to finance offshore wind, is the best mechanism for this.
“Not least as it reduces costs for governments: they pay out but the wind farms pay them back when prices are high. It’s very good the Strategy highlights the importance of revenue stabilisation.”
WindEurope also noted that Europe needs a sound industrial policy to expand its offshore wind supply chain.
It said that currently the supply chain produces 3GW of turbines a year but in the future will need to produce 18GW.
Dickson said: “The expansion of offshore wind will also help economic recovery. 77,000 people work in offshore wind in Europe today.
“That’ll be 200,000 if governments deliver on their offshore wind plans for 2030. Each new offshore wind turbine generates €15m of economic activity.
“The EU Recovery Plan can help support the necessary infrastructure investments, notably in grids and ports.
“Member States should reflect this in their Recovery & Resilience Plans.”
WindEurope said that floating offshore will be up to one-third of all offshore capacity by 2050.
Therefore, said Dickson, “now is the time to invest in large-scale demonstration projects to reduce costs.
“But continued R&I investments in bottom-fixed technology will also pay off. The learning curve is far from over yet.”