The offshore wind sector is increasingly having to tell politicians they can’t have it both ways over cheaper power and demands for local benefits such as jobs, said a senior executive at global industry pacesetter Orsted.
Christina Aabo, head of R&D at the Danish offshore wind giant, said expansion into new global markets is creating the need for frank discussions with policymakers keen to secure high-profile benefits while at the same time insisting on rock-bottom electricity prices.
“As we step into new markets we see requirements on local content, harbours and job creation,” Aabo told the Recharge Summit in Copenhagen.
Developers like Orsted are having to ask politicians whether they want the cheapest possible offshore wind, or to prioritise other spin-off benefits such as job creation.
“Right now it’s we want both. But honestly, as an industry we are stepping up and saying simply, guys, you cannot have it,” Aabo said, adding that to accommodate all the extra requirements would be adding cost, potentially decreasing quality and increasing project risk, but not reducing price of energy.
The Orsted executive stressed that the developer is in favour of local content and other added value, but the focus should be on planning regionally rather than “state by state or even city by city sometimes”.
Local content is increasingly emerging as a potential headache for offshore wind as it expands around the world, with policymakers anxious not to be seen missing out on an industrial bounty.
That's putting pressure on offshore wind developers, who fear a needlessly fragmented supply chain will reverse some of the huge gains in competitiveness the industry has made in the last five years.
Taiwan – one of the world’s hottest new markets – is a case in point, with politicians there piling the pressure on developers and the supply chain to commit to local investments, while the UK has also seen controversy over major offshore wind contracts going abroad.
Australian labour unions recently warned they want to see tangible local benefits from the planed first offshore wind development there.