Germany’s offshore wind industry demanded tenders for new areas and warned of job losses after the expansion of wind at sea in Europe’s largest economy came to a standstill, with only minor installations expected for the next three years.

A mere 219MW of new offshore wind capacity was added during the first half of last year, while not a single turbine was erected during the second half, and no installation is scheduled at all for this year, according to figures by consultancy Deutsche WindGuard.

Another 26MW was added in 2020 through capacity changes to already-operating turbines.

The current lull came as after initial auctions in 2018 and 2019 for pre-developed zones in the North and Baltic Seas, Germany’s government didn’t live up to a promise to hold additional offshore wind tenders for other areas that already have a grid connection. Regular auctions for new areas will start this year, but only be reflected in installation figures by the middle of the decade.

"While the long-term framework conditions for the offshore wind industry have improved last year with the EU's 'Green Deal' and the new long-term targets of the federal government by 2040, the short-term situation in the sector with its very weak domestic market remains challenging," said a joint statement by five leading wind groups (BWE, BWO, VDMA, WAB and the Offshore Wind Foundation).

Bankruptcies, job losses

Under current circumstances, German offshore wind additions would hover around 1GW each in 2022 and 2023, only exceed 2GW in 2024, and jump to above 6GW in 2025.

“The sector needs this regular expansion in order to fully utilise the value chain,” WAB managing director Heike Winkler said at a press conference.

“There is currently a lack of construction activities and we would like it very much if there were opportunities to carry out construction activities in the North and Baltic Seas before 2025, so that we do not have to complain about bankruptcies, job losses or market migration.”

A repeated stop-and-go course of Germany’s offshore wind expansion in recent years already has led to or contributed to the insolvency of several companies in the sector, such as Bard, Weserwind or Senvion, leading to thousands of job losses.

Winkler added that if Germany wishes to still have a functioning offshore wind industry as a job creator for the post-Covid-19 economic recovery, it would be very unfortunate to lose market participants from the supply chain beforehand.

The wind groups stressed that Germany won’t reach its 20GW offshore wind target by 2030 (and 40GW by 2040) unless it uses additional potential for wind at sea in its parts of the North and Baltic Seas.

CfDs, hydrogen

The next government after general elections in September 2021 also urgently needs to reform the current power markets design and enable contract for difference (CfD) tenders, the groups said.

While the industry welcomed Germany’s national hydrogen strategy drafted last year, it also said that green hydrogen (produced from renewable power) requires a market basis, and suggested binding output targets for green hydrogen from offshore wind and more areas at sea for its production.

The EU as part of an offshore renewable energy strategy launched last year targets to boost its offshore wind capacity to 60GW by 2030, and 300GW by 2050, both of which will be difficult to reach without greater efforts by its largest economy. The wind groups added Germany should set up an offshore wind target for 2050 as well.

Green Party pressure

The abysmal expansion figures also had political repercussions in Germany.

Green Party energy spokeswoman in parliament, Julia Verlinden, said the offshore wind lull showed that Berlin is keeping renewables down.

"We need green electricity from the sea to replace coal and nuclear power quickly," Verlinden said.

"The expansion of offshore wind energy should be backed up with clear and gradual volume targets and secured by switching to economically sensible contracts for difference. [Chancellor Merkel's] coalition could give offshore wind energy the necessary backing during this electoral term if it wants to do something for the energy transition and climate protection."

The Green Party opposition wants to make climate protection the main issue in its campaign for general elections in September, at which it challenges Merkel's conservative CDU/CSU and hopes to elect the next Chancellor.

North Sea powerhouse

Germany's installation lull paradoxically came as the electricity output from North Sea wind farms surged by 12.4% last year compared to 2019 to 22.76 terawatt hours fed into the Germany grid, already representing 17.2% of all wind power in the grid, transmission system operator TenneT said.

"The North Sea is becoming the new powerhouse of north-western Europe," TenneT managing director Tim Meyerjürgens said.

"TenneT today already operates offshore grid connections in Germany and the Netherlands with a transmission capacity of about 8.5GW, of which more than 7GW are in the German North Sea."

The TSO said it will build 17GW out of the 20GW in grid link capacity Germany needs by 2030, and another 9.6GW in the Netherlands, spending €20bn ($24.3bn) in coming years.

UPDATES to add Green lawmaker and TenneT comment

Wind

German offshore wind warns of job losses amid three-year standstill