In the wake of Russia’s attack on Ukraine, Europe needs a new approach to wind auctions to meet recently boosted wind power targets that not only includes an acceleration of permitting processes, but also makes sure additional capacity will be built with homegrown wind technology, according to WindEurope chairman Sven Utermöhlen.
“Accelerating permitting alone will not guarantee that we deliver wind projects with European technology,” he said at the opening session of the WindEurope’s annual exhibition and conference in Bilbao. Utermöhlen is also RWE Renewables offshore wind chief executive.
“Energy security requires more homegrown wind energy, with technology that is developed and ‘Made in Europe’. That will require a new approach to wind auctions.”
Deciding the winners at tenders on the basis of price criteria alone is not the right solution anymore, Utermöhlen added.
“We need auctions that reward the added value the European wind industry brings in terms of sustainability, system integration, and making our economies stronger and more resilient.”
The war in Ukraine has pushed Europe to rethink its approach to energy with a new focus on drastically cutting its reliance on fossil-fuel imports, Utermöhlen added, but warned that the EU currently is only building less than half of what is needed to reach its stepped up target (from the REPowerEU plan) of 480GW of wind capacity by 2030 (up from about 190GW today).
At the same time, the supply chain is facing disruptions, and the industry is facing higher and more uncertain costs, both from rising raw material and component prices, Utermöhlen cautioned.
“This is threatening business cases and established commercial cases and established commercial standards in the industry.”
Juan Diego Diaz, president of Spain’s wind energy association AEE also lobbied for a change in auctioning design at the opening session. He stressed that the EU’s new state-aid rules enable member countries to design auctions with 30% of the weight of the awarding assigned according to non-price criteria.
“We must manage to get the best added value for the technology and look after our industrial capacity," he said.
While asking for a changed design of auctions with less emphasis on prices and more support for Europe’s own wind sector, Utermöhlen rejected calls by some EU governments for immediate changes to the way electricity prices are set in wholesale markets in order to deal with high energy prices.
“We need a market design that sends the right investment signals to deliver climate neutrality and ensures energy security for all Europeans,” Utermöhlen said.
“This requires adapting the current rule book by taking into account the impact of the war. Abrupt, uncoordinated changes would be detrimental to investment just when we need them more than ever.”
Ditte Juul Jorgensen, director-general of energy at the European Commission, agreed that the war underscored the bloc’s ambitious renewable energy targets, and that it was more urgent than ever to build up alternatives to fossil fuels.
“We in the European Union cannot and will not continue to be dependent on Russian fossil fuels," she told the opening session. "We must take charge of our own energy future and not ever again let a third country destabilise our energy markets or influence our energy choices.”
“To reduce our dependence on imports from Russia, we need to ramp up our European energy production in order to become more resilient to volatility of fossil-fuel prices.
“We need to invest more and more quickly into cheaper and cleaner sources of energy that are closer to home.”
Wind already accounts for 240,000 to 300,000 jobs in the EU, and the industry in 2018 had an annual turnover of €36bn, she highlighted.