EU leaders met in Ostend to boost North Sea offshore wind development

In order to establish fresh agreements for the expansion of offshore wind in the North Seas, nine Heads of State and Government and the President of the EU Commission meet in Ostend.

The summit of Belgium, Denmark, Germany, and the Netherlands at Esbjerg last year serves as a precedent for this one. The UK, France, Ireland, Luxembourg, Norway, and those four are joined by those six countries. More than 100 companies representing the entire offshore wind and renewable hydrogen value chain in Europe have released an industry declaration outlining what the nine governments must do now to achieve their offshore wind goals.

To agree on additional commitments regarding offshore wind in the North Seas, the head of state and government of Belgium, Denmark, Germany, France, Ireland, Luxembourg, the Netherlands, Norway, and the UK met in Ostend. Along with more than 100 CEOs from companies throughout the offshore wind value chain, they are joined by the President of the European Commission, the Energy Commissioner of the EU, and the corresponding national Energy Ministers. The North Seas Energy Summit is by far the largest political gathering to ever take place. Making Europe’s North Seas a hub for renewable energy is the plan.

Increasing offshore wind capacity is necessary. But it also entails creating the future offshore wind grid. Offshore wind farms now distribute renewable electricity to a single onshore landing point via point-to-point links to the shore. Future hybrid offshore wind farms will transport their electricity to numerous markets while acting as a conduit between nations. The distribution of power will be more effectively improved, supply security will be increased, offshore wind will be more affordable, and the impact on marine biodiversity will be lessened with a linked and mesh offshore wind grid.

Investments in the European value chain 

The nine Governments’ desire to increase their offshore wind goals at today’s North Sea Summit is welcomed by more than 100 enterprises, who represent the whole value chain of offshore wind and renewable hydrogen in Europe. The Industry Declaration emphasizes the urgent need to increase Europe’s capacity for producing wind energy. The signatories emphasize that an increase in offshore wind in the North Seas must be achieved in Europe in order to meet the continent’s net-zero ambitions.

Governments in the North Sea region are aware that significant new investments in wind energy production capacity and associated infrastructure are required to make this a reality. The recently introduced Net Zero Industry Act (NZIA) in the EU is a significant first step. Powering Up Britain aims to achieve net-zero emissions, energy security, and investments in the UK.

These regulations, however, are now insufficient. Importantly, the NZIA lacks enough resources and financial channels to support Europe’s aspirations. It places too much emphasis on technology advancements and not enough on the actual scaling up of current supply networks. But increasing the value chain for offshore wind is now essentially a volume game. Currently, Europe is able to produce 7 GW of offshore wind turbines annually. By the second half of this decade, Europe needs to produce 20 GW annually to follow the expansion route specified in the Ostend Declaration. Additionally, there are already impending constraints in the production of foundations, cables, substations, as well as in the availability of installation, servicing, and other offshore wind vessels. Similar to this, significant acceleration in grid development and supply chain investment is required if the UK is to fulfill its 50GW objective for 2030.

CFDs and PPAs

Grid and port improvements must support the expansion of offshore wind. Between now and 2030, Europe has to invest twice as much in its grid each year and allocate €9 billion to upgrading and expanding its port facilities.

The Industry Declaration also discusses industrial strategy, power market design, auction design, and finance mechanisms. To get the capital needed to realize Europe’s offshore wind objectives, all of these are essential. No offshore wind farm will have made a final investment decision by 2022. Investments were discouraged by uncoordinated market interventions, price limits, and national clawback policies. Governments must regain investor trust by designing their markets to support a mix of Contracts-for-Difference, Power Purchase Agreements, and merchant projects.

Training and reskilling

However, money cannot build blades, steer ships, or run wind farms on its own. National governments must prioritize assisting in the development of the required skill base. By 2030, the number of people employed in offshore wind in Europe must increase from 80,000 to 250,000, necessitating the urgent need for training and reskilling programs as well as adjustments to national school and higher education policy.

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