Wednesday, June 15, 2016

Energy firms urge EU to back offshore wind

On June 3, 2016 executives of eleven offshore wind companies (Adwen, EDP Renewables, Eneco Energie, E.ON Climate & Renewables, GE Renewable Energy, Iberdrola Renovables, MHI Vestas Offshore Wind, RWE Innogy, Siemens Wind Power, Statoil and Vattenfal) wrote to the European Energy Council on 6 June, to underline the crucial role that offshore wind can play in the European energy system and the commitment the wind energy industry is making to reduce costs.

They stated that "with the right build out and regulatory framework the industry is confident that it can achieve cost levels below €80/MWh for projects reaching final investment decision in 2025, including the costs of connecting to the grid. This means offshore wind will be fully competitive with new conventional power generation within a decade." The offshore wind industry is on track to achieve its cost reduction ambitions and they claim it is an essential technology in Europe’s energy security and decarbonisation objectives.
offshore wind farm 
They noted that this commitment is only possible with a stable, long-term market for renewables in Europe. If the offshore industry is to realise its cost reduction goals, a strong pipeline of projects is needed to scale up offshore deployment and identify efficiencies in the supply chain. Following a record year for installations in 2015, questions remain over the post-2020 environment for offshore wind. "Policymakers at European and national level must set out clear visions for the industry after 2020 with robust laws that give investors peace of mind and visibility well into the future," according to the executives.  Regional cooperation between European countries is also needed on planning, financial and regulatory issues to reduce costs and remove barriers to investment.

After 2020, current EU pledges to generate 20% of energy from renewable sources expire. Acdording to the Guardian "Some governments wanted to put in place new renewable energy targets for beyond the end of the decade, but these have been strongly opposed by the UK and a few allies." Wind companies are considering post-2020 investments now as it takes years for projects to move from the planning phase to completion....
Offshore wind has been considerably more expensive than onshore because of the difficulties of construction and much engineering requirements. Projects have faced delays and threats of cancellation as a result.

By 2025, offshore wind is likely to compare favourably with the costs of coal, under carbon penalties, and gas most of the which must be imported by the EU.  It is also lower than the
£92.50 a megawatt hour price of nuclear electricity that the UK government has promised to the French nuclear company EDF.

The Guardian notes that there is now 11GW of offshore wind generation capacity across the EU – less than one-tenth of the 131GW for onshore wind. Together the technologies supply about 11% of electricity demand. The UK is still the leader in offshore wind due largely to government pressure, with 46% of the market, but Germany is catching up fast with 30%. Most of the best wind sites in England have already been taken up, and without stronger support the remaining sites are less favourable, many having poorer geography and lower wind speeds so the industry no longer expects major onshore wind projects to be built in England, though Scotland is still seen as viable. One of the largest new projects, Neart na Gaoithe, is now under threat and other projects have been slow to reach the construction stage and begin operation.  An array of potential new factories for offshore turbines has been slow to materialise. 

"Energy firms urge EU to back offshore wind" by Fiona Harvey Environment correspondent The Guardian June 6, 2016

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