Europe’s powerhouse

Thursday, 23 April, 2015 - 11:30
Converter stations can be used as intersections for a future “supergrid” in the North Sea. The photo shows the installation of converter station ­DolWin alpha in the German Bight. (Photo: TenneT)
Converter stations can be used as intersections for a future “supergrid” in the North Sea. The photo shows the installation of converter station ­DolWin alpha in the German Bight. (Photo: TenneT)

The expansion of offshore wind energy can no longer remain dependent on individual countries, and must in future be planned and realised as a European project.

Europe has been in better shape. The mood is depressed and – at the latest since the recent European elections – it has become clear that a growing proportion of the population rejects further-reaching integration.

That is a major concern for the future of our power supplies, because their further development is dependent on integration. In the coming decades, neighbouring countries will need to spend considerable sums to strengthen the capabilities for cross-border electricity exchange.

Contribution to the ­European energy union

The expansion of offshore wind energy would ­actually be an ideal project to demonstrate the benefits of ­European integration. After all, offshore wind farms are in the meantime far beyond the stage at which they could be managed with the resources of a single country. The companies involved are international players, components are manufactured in any number of countries, and questions of financing have long since risen to the European level.

 

Andrew Garrad: „We have a lot to do to achieve the 2020 targets, but we don’t have a specific 2030 target to provide continued pressure for offshore.“ (Photo: DNV GL)

 

“Expansion forecasts show that the worldwide offshore market is a European market, and there essentially a North Sea market,” says WAB Managing Director Ronny Meyer. The nominal output capacity of the planned wind farms indicates that the North Sea could well serve as “Europe’s powerhouse”, contributing a significant share of the power demands in the neighbouring countries. Interconnection of the wind farms to form a “supergrid” would further increase availability. In the same way as happens onshore, even the shutdown of a complete wind farm could be compensated by neighbouring wind farms closing the gap­.

Given the rather dull overall situation in Europe, the European Wind Energy Association (EWEA) has decided to take the initiative. In a memorandum published on 8th December 2014, it formulated its “5 Priorities for a European Energy Union”, in which offshore wind energy plays a significant role. A “North Sea powerhouse” would help to enhance supply reliability, and a “­Northern Seas offshore grid” should be expanded to facilitate cross-­border electricity supplies and to accelerate development of the European energy market.

In this context, it is important to develop the North Sea as an offshore region and to involve all the neighbouring countries, as Jacopo Moccia said in an interview with OWI in his position as Head of Political Affairs at the EWEA (see interview below).

Industrial policy creates jobs

Against the background of the present economic situation in Europe, the prospect of industrial development and the creation of new jobs are strong arguments. In this respect, offshore wind energy holds potential in numerous forms: Port expansion, increased shipbuilding, the large-scale manufacturing of foundation structures, the manufacturing of wind turbines, the laying of marine cables, the erection of converter and transformer substations, and diverse operational and maintenance services add up to thousands of jobs.

For this promising development to take off, the North Sea countries must come to an agreement and formulate a coordinated industrial policy. That, however, is not yet the case, as revealed by a comparison of the individual countries.

 

Ronny Meyer: “From the ­industrial policy perspective, there is competition between the individual countries.” (Photo: WAB)

 

In Denmark and Great Britain, “offshore wind energy was recognised as an element of industrial policy rather than a purely energy-related project from the earliest stage,” says Meyer. “They implemented a strategic top-down approach from the very beginning, whereas ­Germany placed faith in its renewable energies legislation, with the expectation that the appropriate industrial policy would evolve naturally from there.” Furthermore, the German federal government “generally questioned offshore wind energy” and in this way endangered jobs.

Denmark has perhaps been most successful to date in this respect. Meyer remains diplomatic in his comments: “From the industrial policy perspective, there is competition between the individual countries with regard to turbine manufacturers, supplier industries and port capacity utilisation, and we can note that there are some countries which are pushing corresponding development very strongly and also establishing local supply chains.” The lag must be overcome, however, because all the neighbouring countries must benefit accordingly if the North Sea is to become the powerhouse of Europe.

How much cost reduction is possible?

Cross-border energy exchanges between offshore wind farms would be a contribution towards the establishing of a European energy union. Moccia points out that the first step could be taken with an interconnector between two countries. The Kriegers Flak site in the Baltic Sea, where Germany, Denmark and Sweden are each planning a wind farm, could serve as an ideal pilot project. Nothing similar is presently on the horizon in the North Sea.

With growing importance, offshore wind energy will become a topic for public debate, and the costs will then play a central role. The motto must thus be: Attack is the best form of defence, and this led the world’s largest association of energy experts, DNV GL, to present a corresponding “manifesto for cost reduction” in September 2014. This paper forecasts a cost reduction of around 25 %, and even describes a figure of 40 % as by all means feasible if the measures are “combined with trends in other areas such as improved supply chain efficiency”.

Former EWEA President (March 2013 to October 2014) Andrew Garrad, longstanding Managing ­Director of the Garrad Hassan Group (1984 to 2013) and as a current member of the supervisory board of DNV GL ­Energy one of the foremost European wind energy experts, sees the branch “certainly at a crucial point,” because discussion is currently concentrated on the objective of cutting the cost of energy by 40 %. This leaves us caught in a vicious circle, since – as could be learned from the development of wind energy onshore – massive expansion and correspondingly high numbers of units are prerequisites for significant cost reductions. Massive offshore expansion, however, currently lacks adequate political support, not least due to the aspect of costs.

The EU Commission is playing for time and has foregone the specification of binding targets for renewables for 2030. That is definitely a setback, because the wind energy branch has already gained positive experience with a binding target for 2020: The success of onshore wind energy “was associated with the 20-20-20 obligation, and the stimulus from this obligation was very important,” says Garrad, looking back. The EWEA has a lot of convincing to do in Brussels if it hopes to improve the basis for cost reductions and thus to establish offshore wind energy as a European project.

Detlef Koenemann

 

“Voluntary agreement on harmonising the frameworks”

The North Sea could become a big “European power station”, but the five countries engaged in offshore wind energy have quite different legislative frameworks and ­different support mechanisms. Offshore Wind Industry spoke to EWEA’s Head of Political Affairs, Jacopo Moccia*, about the actual problems and the resulting ­inefficiency.

OWI: Is the offshore wind energy in the North Sea really an European project?
Jacopo Moccia: From a business perspective, we need to consider the North Sea as a single market. The companies working in German, Danish or UK waters tend to be the same, using the same supply chains, the same bases for building the turbines, for transportation of the turbines, for contracting the ships and the offshore workers. But these countries all have individual policies and individual support schemes. That can create some problems and inefficiency. What would be ideal is to have a programme for the offshore development for the North Sea, involving all the neighbouring countries.

OWI: The UK is the strongest market. The government hopes that many jobs will be ­created. But the Danish companies seem to be more successful. Could that become a problem?
Moccia: German and Danish companies operate from the UK too, and they create jobs in the UK. A number of harbours especially in the economically depressed areas in the north of the UK benefit immensely from the growth of the offshore wind business. If every country wants the entire supply chain on its territory, then it would be just very expensive. In Europe, we need perhaps four, five or six Bremerhavens, but we don’t need 20 Bremerhavens. If we want to have a fully industrialised offshore wind industry that brings down the cost, we need to let the industry decide what is the best and most cost-­efficient way of using the supply chain.

OWI: Can we live with four or five different grid codes in Northern Europe? Shouldn’t these codes be harmonised as soon as possible?
Moccia: At the moment, there are no technical difficulties to creating the offshore grid, but there are political problems. The actual problem is that we have quite different legislative frameworks, and we also have different support mechanisms. We suggest, as the EWEA, that the European Commission talks with the North Sea countries to see whether they can come to a voluntary agreement on harmonising the frameworks and on making the support mechanisms compatible. We don’t want to have another round of revision of the support mechanisms. And we need an impulse to get the first bit of the integrated offshore grid built. We need one interconnector between two countries with one wind farm that plugs into it. Once it has happened for one part of the grid, we can use this as a model for a big offshore grid which is fully meshed among the different countries. We have the technology and we know all the principles. We only need to make the first psychological step: “Let’s do it!”

The interview was conducted by Detlef Koenemann.


* Shortly after the interview was conducted, Jacopo Moccia had left the EWEA. He is now Policy and Operations Director at the industry association Ocean Energy Europe.

 

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