Offshore Wind Power Costs To Fall 30-40% In 10 Years

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On Day 2 of my cleantech tour of Germany, one of the big events was the WindEnergy Hamburg 2014 trade fair. It is reportedly the largest wind energy conference in the world, and it is being held in Hamburg for the first time (with a slightly different name, of course).. Hamburg is home to the headquarters of 10 wind energy companies, more than any other city in Europe and perhaps the world.

As I’m writing this, we are sitting at the front of a panel discussion about wind energy markets in Germany, which includes the heads of several important wind energy companies and local or regional government:

• Reinhard Meyer, Minister of Economic Affairs, Employment, Transport and Technology of the State of Schleswig-Holstein
• Frank Horch, Senator of the Ministry for Economy, Transport and Innovation of the Free and Hanseatic City of Hamburg
• Andreas Nauen, CEO Senvion SE
• Dr. Markus Tacke, CEO Siemens Division Wind Power
• Dr. Jürgen Zeschky, CEO Nordex SE

However, the panel discussion has been heavy on small talk, discussion regarding the trade fair moving from Husum to Hamburg, and intricacies as well as “old” discussions of German energy policy. Luckily, however, before the panel discussion, we had the opportunity to talk with Jan Rispens, Managing Director of Renewable Energy Hamburg, who provided some very interesting statements.

Rispens started off by letting us know that recent decisions in the German Parliament regarding the EEG ended with favorable support for wind energy (supportive feed-in tariffs, to be precise), and these are expected to result in a boom in offshore wind power development and a drop in offshore wind power costs.

Thanks to the boom, wind energy companies claim that they are going to be able to bring costs down dramatically (thanks to economies of scale). Siemens recently stated that a 40% drop in the price of offshore wind is possible within the next 10 years, or 30% at the least. This would be a similar trend as we have already seen with onshore wind power costs.

In response to questions I asked Rispens, he noted that the focus of the offshore wind market in the coming years would be the North Sea and Baltic Sea. He agreed that the UK market would remain the #1 offshore wind power country in the world for a long time, and would continue to grow, but that Germany would see strong growth and would climb to #2.

In particular, the German market will be strong from 2014 through 2016, but after that it depends on policy.

Currently, thanks to feed-in tariffs, Rispens noted that return on investment (ROI) from offshore wind farms built in Germany is ~10%. It is made quite high via feed-in tariffs in order to compensate for the relatively high risk that still exists in offshore wind power development.

Aside from Germany and the UK, I also asked Rispens what he thought of the US offshore wind power market (…or the potential for such a market to finally sprout). He did note the tremendous offshore wind power potential that exists in the US and said that he thinks it will be a big market in the coming decades, but he emphasized decades. I’m hoping we will finally get going in a strong way in the coming decade, but decades it may very well be.

To close out, below are some of my choice pictures from Hamburg WindEnergy 2014.

All images by Zachary Shahan | CleanTechnica (CC BY-SA 4.0 license)