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OPINION: What Asia and US can learn from European offshore

After 25 years of trial and error, the European offshore wind industry has established itself as a part of the electricity mix, albeit still too expensive to compete directly without support.

Not unlike onshore wind when it turned 25 in 2005, offshore is on the cusp of breakthroughs in technology and cost, and it seems to have the volumes needed to make all that happen.

Since at least 2007, there has been considerable interest in offshore in other markets, primarily in Asia (China, Japan, South Korea, Taiwan and now India), but also in North America, where good resources are available close to major urban centres where land is at a premium and the demand is enormous and growing rapidly. What lessons can these potential markets take from the European experience? There are many, but here are a few key ones:

Offshore is not onshore with “wet feet”. Although onshore experience is useful, we’re really talking about a different industry, in terms of scale, complexity and technology. Just because you have an onshore industry doesn’t mean you can move offshore successfully.

Look at the US, Canada, France and Spain, which have nominally had offshore ambitions for a decade but have not yet got off the ground — or, more appropriately, into the water — although the US will have a commercial project running by year’s end.

Even more than for onshore wind and other renewables, a successful offshore programme is predicated on government policy that is “long, loud and legal” for projects that can be measured in the billions of euros and may take the better part of a decade from initial development to full deployment.

Policies that live and die in the course of a single-term government will not succeed; the industry needs consistent policy support over long time frames and with clear objectives. Targets and timetables are best, for installed capacity, electricity generation and penetration percentage. Infrastructure planning for offshore development, as well as the grids to handle them, are often serious bottlenecks.

Offshore needs strong public investment, especially at the beginning. Nothing builds investor confidence like a government willing to put its money where its mouth is, yet this should be accompanied by a plan to progress in a step-wise fashion from pilot to demonstration to commercial; and from public investment to public-private partnerships and then strictly commercial ventures.

Volume and local manufacturing are important. To make the market work properly, there has to be a significant and reasonably predictable annual volume, as well as some sort of target to provide medium-term visibility for the eventual size of the market. Volumes should be ramped up at a moderate pace, and it will become clear whether and how much of a local supply chain and manufacturing base should be developed.

You can’t wave a magic wand and create a supply chain, nor can you force it, unless you’re a very large market; but if the volume and visibility are there, with the right incentives it will come.

Every market is different, and each will follow its own path, ideally adapted to the circumstances of the domestic electricity market, as well as its industrial development and carbon-reduction goals. The lessons learned in Europe have been consistently passed on to colleagues in Asia and the Americas.

The Global Wind Energy Council is deeply involved in assessing local conditions and laying out a road map for the development of offshore in India through our EU-sponsored FOWIND project. Most of the time, responsible bodies in India seem to accept the messages above, although the proof will be in the doing.

Politicians with a limited mandate always want things done yesterday, and we have seen the consequences in Europe, where short-term policy swings and reversals have wreaked havoc with the offshore industry (and, indeed, with all energy sources). But we hope that a long-term, steady programme of development will lead to a flourishing offshore industry in India, kicking off before the end of this decade.

As I get older, I increasingly question the adage that one can learn from the mistakes of others. I’m beginning to believe that you have to make the mistakes yourself to really learn the lesson.

But by studying experience elsewhere, one can recognise the mistakes before they become catastrophic blunders and take corrective action that won’t set the industry back for years.

As the Chinese, Japanese, Taiwanese, Indian, South Korean and US markets evolve, we’ll be able to judge whether they’ve learned anything from the European experience. For the sake of the industry, I hope they do.

Steve Sawyer is secretary-general of the Global Wind Energy Council

This piece was published as part of the Thought Leaders series. Recharge’s Thought Leaders Club brings together leading thinkers and participants from the renewable-energy sector to examine the key challenges facing our industry

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