The offshore wind industry in Europe is looking to bounce back from a rough year caused by the global energy crisis, which has affected its costs, supply chains, and auctions. The industry has faced challenges from soaring raw-material prices, higher borrowing costs, and long-running supply-chain issues, which have resulted in project failures, multi-billion dollar writedowns, and disastrous wind farm auctions.
However, the industry has also seen some positive developments, such as new policies and initiatives from the UK, Germany, and Poland, which have announced new measures to support the offshore wind sector, such as increasing the subsidies, speeding up the permits, and easing the grid access. The industry has also witnessed the progress of some offshore wind projects that are proposed or under development in Europe, such as the Star of the South project off the coast of Victoria in Australia, which could be the first large-scale offshore wind farm in the Southern Hemisphere.
The UK, which has the largest offshore wind industry in the world, with 45 offshore wind farms producing 14GW, and plans to expand capacity to 50GW by 2030, has taken direct action to help with funding, bumping up the support price for new offshore wind farms by around two-thirds to £73 per megawatt hour to help more offshore windfarm projects to move ahead despite higher costs. The UK has also raised the starting price for floating offshore wind projects by more than 50% from £116 a MWh to £176 a MWh before the next subsidy auction in 2024.
Germany, which has 30 offshore wind farms producing 8GW, and aims to achieve 65% of its electricity from renewable sources by 2030, has also announced new measures to boost its offshore wind industry, such as increasing its offshore wind target from 20GW to 40GW by 2040, and simplifying the grid connection process for green energy firms. Germany has also launched a new offshore wind auction, which will award contracts for 1.6GW of offshore wind capacity by 2022.
Poland, which has shown its ambition to develop its offshore wind potential, which is estimated at 28GW, has signed a cooperation agreement with Denmark to exchange best practices and experiences. Poland has also launched its first offshore wind auction, which attracted bids from major developers such as Orsted, RWE, and Equinor, and plans to award contracts for 5.9GW of offshore wind capacity by 2022.
The offshore wind technology has become more feasible and cost-effective in recent years, due to the development of larger turbines and floating foundations that can operate in deep waters. The offshore wind industry is a vital part of the global energy transition, as it can provide large-scale clean energy projects in a relatively short time frame, and create new opportunities for regional development, skills transfer, and innovation.
