A recent study reveals that the European offshore wind market can compete effectively with traditional gas and coal markets. That is – if this industry is really intent on getting cost-competitive by discarding 26% of its outlays by 2023.
According to the European Wind Energy Association, this industry sector “must significantly reduce costs over the next five years through a number of key actions, outlining where savings can be found.”
The study was conducted through the auspices of Ernst & Young. Its authors said that “offshore wind should be considered as an important component to the power mix” if Europe wants to ensure its commitments to climate change.
The report emphasized that “continued cost reduction and support from policy makers are necessary to maximise the potential of offshore wind resources and to realise the socio-economic benefits of a fully industrialised and emerging sector.”
“This study shows that offshore wind power in Europe will be a major contributor to the continent’s energy security now and over the course of the next decade,” says Thomas Becker, Chief Executive Officer of the European Wind Energy Association.
The Ernst & Young report underlined a number of key priorities that are important in meeting the challenges facing offshore wind. They are:
- ensuring a stable regulatory framework and defining long-term policy schemes
- improving access to finance for the offshore wind energy sector
- ensuring cost-effective grid investment and connection
- addressing planning system issues
- facing supply and logistics challenges
- supporting innovation and training, and enhancing synergies to reduce costs
The authors of the report also created an “Offshore Wind Scenario” where they projected the installed capacity of Europe’s offshore wind to reach nearly 65 GW by 2030. This will enable the industry to supply over 25 per cent of the continent’s power generation.
In addition, this scenario has the potential of saving Europe €18b each year on fuel imports in 2030. If this happens, low carbon energy sector will be cheaper by €4b compared to a “Nuclear Scenario”.
“As much as we need politicians to come on board, it is also up to the industry to deliver on our commitments,” pleads Becker.
“It is no secret that cost reduction is a great challenge that we face in the offshore business; but as we continue to work together, innovate and compete, the sector will face down its trials in the years ahead,” he expounds.
“We must not forget the jobs, trade and growth that offshore wind is contributing to Europe,” Becker adds.
Fortunately, Becker’s stand on wind against coal has a lot of adherents. Several key people in the European wind industry agree with his stand on this issue.
“Cost reduction remains a top priority of the offshore wind industry. We need to create profitable investments for offshore projects independent of subsidies,” says Michael Hannibal, the CEO Offshore of Siemens Wind Power and Renewables.
“For offshore wind to realise its full and significant potential, we need to continuously reduce the cost of electricity,” adds Claus Hviid Christensen, Vice President in DONG Energy Wind Power.