Offshore wind needs grid development

Wind projects already being planned could cover 10% of Europe's electricity needs, but a lack of grid infrastructure and liquidity problems will prevent the development of some, according to the European Wind Energy Association (EWEA).

EWEA has set its sights on 40GW of offshore generating capacity by 2020, hoping to replicate the roughly 30% annual growth that onshore wind achieved in the 12 years prior to 2004.

In a new report launched at the Offshore Wind Conference in Stockholm today, the industry argued that the target is achievable as offshore wind projects of over 100 GW have been proposed or are already under construction. If all the projects were to go through, they would meet around a tenth of European electricity demand, while avoiding 202 million tonnes of CO2 in a single year, it said.

"This shows the enormous interest among Europe's industrial entrepreneurs, developers and investors," the report argued.

Nevertheless, not all the projects will be realised as the credit crunch and inadequate grid infrastructure will continue to restrain an offshore wind boom, EWEA Chief Executive Christian Kjaer told journalists ahead of the conference.

Building up the 40 GW capacity will require €57 billion of investment by 2020 but banks are still reluctant to lend money, he said. Although offshore wind projects by nature attract large utility companies with strong balance sheets, the challenge is not insignificant, he added.

"We really need to develop an entire new industry," Kjaer said, pointing out that offshore wind requires radically different infrastructure to its onshore counterpart.

A single turbine installation vessel costs up to €250 million, the CEO said. Moreover, upgrading the operation and maintenance of wind farms and turning harbours into centres for operating wind power compare with the challenge that offshore oil and gas faced when they were being developed in the 1980s, he added.

"We need some element from the EU to ensure that the investor has the confidence that there will be a market to sustain their risky investments," Kjaer concluded.

Extending European grids

One major hurdle facing infrastructure development is the lack of grid connections to bring offshore energy to shore, the report notes.

EWEA launched a proposal for a transnational offshore grid in an attempt to feed into the first 10-year network development plan from the European Network of Transmission System Operators (ENTSO-E), a new EU agency created by the third energy liberalisation package (see EurActiv LinksDossier).

The EWEA report argues that a common regulatory regime will be needed to ensure that transmissions system operators (TSOs) develop the grids in an economically efficient way. Offshore developers should not be forced to also take on the costs of the grid, which will bring economic benefits to all society, it said.

"Offshore should not go down as the first technology in history which has to cover the cost of the grid," Kjaer argued. Offshore wind, although still more expensive than land-based wind farms, has identical benefits in that the price of wind is predictable and independent of volatile fuel prices.

EurActiv