Europe needs commitment to wind
Last year was a record-breaker in terms of offshore wind investment. This shows that Europe has great potential to remain the global leader in this part of the wind sector.
However, it must deliver on this potential, as there is still uncertainty over volumes and regulation in key European offshore markets after 2020.
These are the headlines from the annual offshore statistics that WindEurope published last week. This showed that investments in the European offshore wind sector reached €18.2bn in 2016, in new schemes totalling up to 4.9GW to be built in the coming years. The figure represents a 40% increase from 2015.
The UK attracted the most of the new investment, with commitments totalling €10.5bn for new projects, followed by Germany (€4.2bn), Belgium (€2.3bn) and Denmark (€1bn).
But these good times could end soon. WindEurope raised concerns over the lack of plans for investments in renewables beyond 2020. The organisation has signalled that the number of projects will start to fall already towards 2019 as European member states complete their National Renewable Energy Action Plan under the current Renewable Energy Directive, which covers the period up to 2020.
In fact, only seven out of European Union’s 28 member states have plans for renewables after 2020, and just three of them have specific plans for offshore wind, WindEurope chief executive Giles Dickson has said.
Germany, the Netherlands and the UK are the only three countries to have plans for offshore wind after 2020. Significantly, they are also the only countries where new offshore schemes, totalling 1.5GW, were completed in 2016.
This shows that Europe is still split in two parts going at different speeds within the offshore sector: the market leaders continue to push on, but progress elsewhere is slow or non-existent. Denmark has announced some tender results over the last years, but investors will want to see the likes of France, Italy and Portugal pick up the pace. The more countries that see the potential in offshore wind, the more certainty there is for companies to plan.
More European nations need to set their plans for renewables for the next decade to give more clarity for investors, as a lack of plans might force manufacturers and growing number of companies operating across the offshore wind supply chain to look at whether there are opportunities to grow in emerging offshore markets in North America and Asia instead.
Despite the costs of wind are falling, increasing volumes of installed capacity in the market are required to sustain it. This means that increasing commitment to invest in the sector is needed by EU members if Europe wants to keep its primacy in offshore wind.