Europe invests €26 billion in offshore wind in 2020

Posted February 11, 2021 in Zenco News

Despite constraints due to the COVID-19 pandemic, Europe confirmed a record amount of €26.3 billion of investments in new offshore wind farms in 2020.

According to WindEurope, this will finance 7.1 GW of new offshore wind which will be built in the coming years. Last year Europe built 2.9 GW of new offshore wind. Europe now has 25 GW of offshore wind capacity, WindEurope said on February 8, noting that the EU aims to have 300 GW by 2050.

According to the latest WindEurope data, Europe raised €26.3bn to finance 7.1 GW of new offshore wind capacity in 2020. The UK, Netherlands, Germany and France all saw final investment decisions for major new offshore wind farms.

WindEurope CEO Giles Dickson noted that €26 billion in new investments in 2020 is a huge vote of confidence in offshore wind. “Investors see that offshore wind is cheap, reliable, and resilient – and that Governments want more of it. And these investments will create jobs and growth. Every new offshore wind turbine generates €15 million of economic activity. We expect the 77,000 people working in offshore wind today in Europe to be 200,000 by 2030,” Dickson said.

Europe installed 2.9 GW of new offshore wind capacity in 2020. This is in line with WindEurope’s pre-COVID forecast.

“The new installations show the resilience of the offshore wind industry. Europe’s existing offshore wind farms kept operating. We kept building new wind farms. We kept making new turbines,” the WindEurope CEO said.

Nine new offshore wind farms came online across five countries. The Netherlands connected 1,493 MW and completed the development of the Borssele Wind Farm Zone. Belgium connected 706 MW, the UK 483 MW and Germany 219 MW. Portugal completed the installation of a floating offshore wine farm, co-funded by the EU’s NER300 programme.

Europe now has 116 offshore wind farms across 12 countries, WindEurope said, adding that 40% of the capacity is in the UK. But new players are entering the scene. France will finally start building its offshore wind farms after final investment decisions on 1 GW which will be built by 2023. They’re also planning four small floating offshore wind farms and this year will tender a large floating offshore wind farm. Poland passed a historic Offshore Wind Act and aims for 28 GW of offshore wind by 2050. Additionally, they initiated an agreement among all eight Baltic countries to cooperate on offshore wind. Greece is about to adopt plans for the build-out of offshore wind. And the three Baltic States – Estonia, Latvia, and Lithuania – are all developing projects.

“Offshore wind is no longer just about the North Sea. It’s rapidly becoming a pan-European affair. More and more countries are making commitments on it. Poland, Spain, Greece, Ireland, the three Baltic States all have plans. And the rapid advance of floating offshore wind will help the build-out in the Atlantic, Mediterranean and Black Sea,” Dickson said.

Offshore wind technology continues to evolve. The average size of the turbines installed last year was over 8 MW. 2020 saw big orders for GE’s 13 MW GE Haliade-X turbine. And Siemens Gamesa announced a new 14 MW turbine. New offshore wind farms now deliver capacity factors in excess of 50%.

The EU Offshore Renewable Energy Strategy (ORES) that the EU Commission tabled last year was a milestone. It mapped out the regulatory framework for the expansion of offshore wind development and set a target of 300 GW offshore wind for the EU by 2050, 25 times more than what the EU has today.

“It’s excellent that many more countries have now committed to Contracts-for-Difference (CfDs) as the financing model for offshore wind. It’s cheap for governments: they pay out and get paid back depending on market prices. And it significantly reduces financing costs which means lower bills for energy consumers,” Dickson said, adding that the UK, Denmark, Poland, France, Ireland, and Lithuania will now all use CfDs. “And Germany dropped its misguided plans to bring in a very different system,” Dickson quipped.

In 2020 six major Power Purchase Agreements (PPAs) from offshore wind were signed. This shows the corporate demand for clean offshore wind energy. New PPA deals came from different sectors of the industry and included the large corporate off-takers Nestle, Amazon, Deutsche Bahn, Borealis and Ineos.

“Let’s keep up this momentum!” Dickson said, adding, “We now need a comprehensive legislative framework for hybrid offshore wind projects, improved maritime spatial planning and streamlined permitting procedures to unleash the full potential of Europe’s offshore wind”.

Credit: New Europe | Despite COVID, Europe invests €26 billion in offshore wind | neweuope.eu