The European Commission has launched its long-awaited Offshore Renewable Energy Strategy that aims for 300GW of offshore wind and 40GW of ocean energy (wave, tidal and floating solar) by 2050, as the renewables industry welcomed the ambition but demanded higher investments in ports, grids and the supply chain.
The EU strategy (link here) also details interim targets of 60GW of offshore wind by 2030, up from 12GW now, and of 1GW of ocean energy by then.
"Today's strategy shows the urgency and opportunity of ramping up our investment in offshore renewables," said Frans Timmermans, Executive Vice-President of the European Commission in charge of the European Green Deal.
"With our vast sea basins and industrial leadership, the European Union has all that it needs to rise up to the challenge. Already, offshore renewable energy is a true European success story."
Kadri Simson, European Commissioner for Energy, added: "Europe is a world leader in offshore renewable energy and can become a powerhouse for its global development.
"We must step up our game by harnessing all the potential of offshore wind and by advancing other technologies such as wave, tidal and floating solar."
The strategy establishes a stable framework for authorities, investors and developers in this sector, Simson said.
"We need to boost the EU's domestic production to achieve our climate targets, feed the growing electricity demand and support the economy in its post-Covid recovery."
The massive increase in offshore wind capacity requires major investments in infrastructure, industry group WindEurope said, pointing to a need of €6.5bn ($7.7bn) in investments in ports over the next 10 years alone.
“This is a very good strategy. It confirms the vision for offshore wind to be Europe’s number one source of electricity,” WindEurope chief executive Giles Dickson said.
“It’s also spot-on in recognising the necessary investments to deliver that – in grids, ports and the supply chain.
“And it identifies all the right policies that will drive those investments: industrial policy; state aid rules; and the mechanisms to ensure predictable revenues for offshore wind farm developers at least cost to society.”
The ambitious strategy launched today is a major boost to an already thriving offshore wind sector in Europe, where 42% of the world’s capacity of wind at sea are installed, as the sector becomes increasingly important across the EU.
The European Commission in March had made a proposal for a Climate Law that would make its 2050 net zero greenhouse gas emissions binding, a step that has encouraged other large emitters to also make pledges to become climate neutral by mid-century (Japan, South Korea), or in the case of China, by 2060.
US President-elect Joe Biden has promised that his country will follow suit once he is in power from mid-January.
The EU commission has admitted that the massive boost in offshore energy is challenging, and will require an investment that is estimated at up to €800bn ($945bn) by 2050.
To install the capacity needed, the volume of offshore energy additions needs to speed up to 7GW per year after 2030, from 3GW per year today, the draft stipulated.
For that, a number of regulatory obstacles have to be overcome, the commission acknowledges, adding that EU member states need to get involved more. Under current stated policies, offshore energy would only reach a capacity of 90GW in 2050, the proposal estimates.
“Offshore wind is cheap now but it requires high upfront investments. So minimising financing costs is crucial to keeping overall costs low,” Dickson said.
“Revenue stabilisation is central to this. If banks see stable revenues they lend at low interest. And the Contract for Difference, which many countries are now using to finance offshore wind, is the best mechanism for this.”
Germany's federation of offshore wind farm operators (BWO) and the country's Offshore Wind Energy Foundation in a joint statement also welcomed that the EU strategy will place wind at sea at the centre of a future climate-friendly power supply and said it is an important step for the offshore wind sector across Europe.
The challenges for a rapid build-up cannot be resolved on a national basis, and require coordinated European planning, the groups stress.
"We are faced with a mammoth task," BWO managing director Stefan Thimm said. He added that money alone won't be enough, as a patchwork of national rules stand in the way of cross-country projects so far.
"It is positive that the ORES (Offshore Renewable Energy Strategy) contains many points that we too have repeatedly addressed in relation to German and European politics over the past few weeks and months. Now these have to be converted into a reliable regulatory framework as quickly as possible."
Among those points are the distribution of costs and benefits of cross-border projects, the interlinking of marine spatial planning with an increased focus on the possible joint use of available sea areas, the strengthening of regional cooperation, the need for pilot projects and of course the harmonisation of framework conditions for financing, the groups added.
Germany has the EU's biggest offshore wind capacity after the UK left the economic block.
WindEurope estimates the UK will contribute another 80GW to Europe's offshore wind capacity in 2050, and Norway a further 30GW.
German economics and energy minister Peter Altmaier said he welcomes the EU commission's expressed intention to improve framework conditions for cross-border offshore wind projects.
"Here, in particular we need rules that make sure that wind power from cross-border projects can be transmitted and integrated into the market efficiently," Altmaier said, adding that commission's strategy is a good starting point for further discussion.
Manon van Beek, chief executive at TenneT, the transmission system operator linking Dutch and German North Sea wind farms to the mainland grid, on that point lobbied for hybrid projects that use subsea cables not only for transporting power from wind farms to land, but also for electricity trading between countries in period without wind.
"Such hybrid projects would link wind farms to various countries and at the same time establish a direct electric link between these countries at low costs."
TenneT plans to build a 12GW energy hub in the North Sea by 2035 that would channel 6GW to Germany, 4GW to the Netherlands, and the remaining 2GW to Denmark.
UPDATES with comment from German energy minister, TenneT CEO.