Offshore Wind: “The current pipeline of projects is not enough”

Tuesday, 26 July, 2016 - 15:30
Annual installed offshore wind capacity in Europe (graph: WindEurope)
Annual installed offshore wind capacity in Europe (Graph: WindEurope)

The offshore wind industry hit a new record for investments of €14 billion during the first half of the year – exceeding the total full-year investments in 2015 – according to offshore statistics for the first 6 months of 2016 published today by WindEurope. As of 30 June 2016, cumulatively, there are 3,344 offshore wind turbines with a combined capacity of 11,538 MW fully grid connected in European waters in 82 wind farms across 11 countries, including demonstration sites.

Brand new WindEurope statistics show UK offshore wind projects attracted €10.4 billion, i.e. more than three quarters of the total investments. Germany (€2.5bn), Denmark (€1bn), and Finland (121 million) followed on rank 2 to 4. All in all seven projects reach their final investment decision with a total of 3.7GW of new capacity financed. WindEurope expects a further €5.2 billion investment from July 2016 to June 2017, financing 1.4G W in capacity.

But there’s some water to be poured into the wine: The number of offshore turbines connected to the grid suffered a 78% declined compared to grid connections during the first half year of 2015. 114 offshore turbines have been connected to the grid – close to values seen last time during the first half year of 2012. Even worse: All grid connection were concentrated in two countries: Germany (258 MW) and the Netherlands (253 MW), resulting in an overall installation of 511 MW.

At the same period, 13 commercial wind farms have been under construction, totaling more than 4.2 GW of capacity, with 6 offshore wind projects in Germany, 4 in the UK, 2 in the Netherlands, and 1 in Belgium. 128 turbines, totaling 596 MW, are currently erected but awaiting grid connection.

“The record investment numbers show a clear industry commitment to offshore wind”, comments WindEurope Chief Executive Officer Giles Dickson, “We expect installations will pick up significantly in 2017 but there are a lot of challenges out there still on offshore wind. Not least the uncertainty over future volumes and regulation in many key markets for the period after 2020.”

4.8 MW average size of offshore wind turbines now

All 114 turbines grid connected in the first 6 months have been supplied by Siemens. They ranged in size between 3 MW and 6 MW. The average turbine size has grown from 4.2 MW to 4.8 MW in the first half as developers prefer larger machines.

DONG Energy has installed over a quarter of all new capacity (129 MW) in the first 6 months of 2016. Infrastructure and pension funds ownership accounts for another quarter of all installed. The second largest developer is Northland Power with 96 MW (18.8%), followed by Westermeerwind with 93 MW (18.2%).

“The costs of offshore wind are falling, but we need healthy volumes in the market to sustain this”, Dickson concludes, “The current pipeline of projects is not enough, and the commitments Member States have so far made for beyond 2020 fall well short of what's needed. This risks undermining Europe's competitive position in offshore wind.”

To keep the European offshore wind industry in the lead while the US and China are now moving to rapidly expand their offshore wind investments, WindEurope calls Member States’ Governments for “clearer deployment goals and long-term visibility on tender volumes and timetables”.

In a further outlook WindEurope expects €5.2bn and 1.4 GW in Final Investment Decisions (FIDs) by June 2017. This compares to €10bn and 2.2 GW for the same period last year. Transactions that are approaching financial close are two Belgian projects: Rentel (300 MW) and Norther (370 MW) as well as two German offshore wind farms: Deutsche Bucht (252 MW) and EnBW Hohe See (492 MW).

Volker Buddensiek

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