Germany’s offshore future ‘challenging’

27 January 2021

New impetus for the German offshore wind industry is needed if it is to recover from the construction slump experienced in 2020, according to industry organisations BWE, BWO, VDMA Power Systems, WAB and the OFFSHORE-WINDENERGIE Foundation, commenting on the offshore expansion figures for 2020 published on 22 January by Deutsche WindGuard.

According to these figures, 32 turbines with a capacity of 219 MW were connected to the grid for the first time last year. In total, 1501 offshore wind turbines with a capacity of 7770 MW are feeding electricity into the German North Sea and Baltic Sea. But due to what is called ‘incorrect political framework conditions’, no new plants could be built in the second half of 2020.

"While the long-term framework conditions for the offshore wind industry have improved over the past year with the EU's 'Green Deal' and the German government's new long-term targets until 2040, the short-term situation of the industry remains challenging with the very weak domestic market" said a spokesman in a joint statement.

The statement sets out various measures that are needed to reinvigorate the offshore market and the associated construction process. Construction activities should be enabled immediately. Numerous companies in the offshore wind industry are not only confronted with the challenges of internationalisation and the Corona crisis, but also with the outlook that not a single offshore wind turbine will be installed in German waters in the coming year. This follows a 2020 in which expansion was only 15% of the 2017 level.

The serious consequences of the lack of wind energy expansion in the North and Baltic Seas, such as company closures, employment losses and migration from the German market, which the industry has continuously warned about in recent years, must be overcome as quickly as possible. It makes sense to trigger a surge in investment now. This will secure the German offshore wind value chain. 

To this end, it is necessary to quickly implement the Coastal Sea Regulation proposed by the industry. 

What is needed, says the statement, is a short-term stimulus for cost-efficient expansion. To achieve this, the existing potential must be put out to tender as quickly as possible and combined with rapid commissioning. More new capacity should be added before the end of the decade. By this the German government's expansion target of 20 GW by 2030 can be safely achieved. "Bringing forward investments now helps the economy and climate protection in equal measure. Offshore wind power is essential as the foundation of the energy transition for German and European climate targets" said the statement.

Other significant measures set out by the industry representatives included: 

  • Creating spatially secure offshore expansion targets - emerging conflicts of use with shipping, marine and nature conservation must be resolved pragmatically so that the achievement of the defined goals is not prevented through the back door. In order to defuse conflicts of use to some extent, the EU Commission developed the co-use approach. According to this approach, the scarce marine space should – if possible – be used by several actors at the same time. This idea should be further developed and also increasingly applied in Germany. 
  • Developing the market framework for offshore wind energy and "green" hydrogen further. The next legislative period must be used urgently to initiate a fundamental reform of the electricity market design and the refinancing of offshore wind projects. 
  • Approach to electrification. Since direct electrification is not possible in all sectors of the economy, synthetic energy sources based on renewable energies are an indispensable element for complete decarbonisation. The industry expressly welcome the National Hydrogen Strategy and the associated approach of developing a comprehensive energy industry and industrial policy strategy that takes the entire value chain of technologies, components, production, storage, infrastructure and logistics into account. "Green" hydrogen needs a market-based foundation. CO2 pricing in the transport and heat sectors with a simultaneous reduction or restructuring of the EEG levy and financial burdens through other levies and taxes are steps in the right direction.

For better planning of hydrogen projects, a concrete and binding volume target to produce "green" hydrogen from offshore wind energy and reliable procurement mechanisms are also needed. 

  • Harnessing positive market momentum through EU strategy. The EU wants to expand offshore wind to 300 GW by 2050. This shows the great export potential. The announcement to revise the EU climate target for 2030 must be backed up by a faster expansion of offshore wind energy. Furthermore, the Green Deal is an investment offensive for Europe's energy sector and needs a clear framework to trigger production and value creation in Europe.

In order to secure the expansion targets in the long term and enable European planning, Germany also needs an expansion target for 2050. In addition, European and international cooperation should be further developed.

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