The governments of leading offshore wind markets, Germany, Belgium, and Denmark came together with industry captains this week in signing a Joint Statement to further the deployment of offshore wind energy in Europe. Signatory governments welcomed the cost reductions in offshore wind achieved to date and set the intention that the offshore wind will continue to reduce its costs so that Europe remains the global leader in the sector.
The industry has been on a steep cost reduction curve and has met its self-imposed target of €100/MWh by 2020 ahead of time. Winning bids of auctions in the Netherlands, Germany and Denmark delivered up to 48% cost reduction compared to projects just 2 years ago.
Delivering further cost reductions will require the deployment of significant volumes of new offshore wind. But most Governments in Europe have still to define clear plans for how much new offshore they intend to deploy, notably beyond 2023.
The industry therefore calls on European governments to collectively ensure there is 60 GW, or at least 4 GW per year of new deployment in the decade after 2020. Going beyond 4 GW per year would enable the industry to become fully competitive with new conventional generation ahead of 2030.
To deliver on these volumes, government and industry signatories committed to build on public-private cooperation to facilitate investments in projects and associated infrastructure. Crucially, they pledged to work towards the necessary European framework supporting Europe’s common renewable energy trajectories in part by calling on the European Commission to mobilize dedicated funding for strategic joint projects for offshore wind energy.
“More than ever, we need countries to coordinate and lay out a clear vision,” said Samuel Leupold, CEO, DONG Energy Wind Power. “A visible and steady pipeline of projects between 2020 and 2030 will allow for continued cost reductions, a thriving supply chain, and continued European leadership in an increasingly international market for offshore wind. We welcome the joint statement and call on other governments to commit to robust volumes.”
The 60 GW, which the industry intends to deploy between 2020 and 2030, represents only a fraction of the potential of offshore wind energy in Europe.
In fact, according to a new resource assessment by BVG Associates, offshore wind could in theory generate between 2,600 TWh and 6,000 TWh per year at a competitive cost – €65/MWh or below, including grid connection, using the technologies that will have developed by 2030. This economically attractive resource potential would represent between 80% and 180% of the EU’s total electricity demand.
“We will continue with technological innovation, testing and industrialization to reduce costs going forward,” said Michael Hannibal, CEO Offshore, Siemens Gamesa Renewable Energy. “But it’s absolutely necessary to have sufficiently large volumes for offshore wind deployment. We need to build on the Joint Statement and create a strong market for offshore wind in Europe. This will deliver sustainable offshore wind energy to society and allow manufacturers to maintain global technology leadership.”
The joint initiative serves as a strong reminder that leading European businesses and Governments are united in their determination to accelerate the transition to low-carbon energy, to reap the economic benefits that will come from that – and in the process to uphold the non-negotiable letter and spirit of the Paris Climate Agreement.
Filed Under: News, Offshore wind, Policy, Projects