Published on July 18th, 2013 | by Joshua S Hill1
Europe Offshore Wind Sector Grows, But For How Long?
July 18th, 2013 by Joshua S Hill
The European Wind Energy Association (EWEA) has revealed that a total of 277 offshore wind turbines were connected to the grid in the first 181 days of the year, totalling 1,045 MW, bringing the total offshore capacity in Europe up to 6,040 MW over 58 wind farms in ten countries.
277 wind turbines is double that compared to the same period in 2012, but 2013 also included another 268 foundations and 254 turbines erected, and all in the first half of the year.
However it isn’t all clear sailing ahead, for the offshore wind sector, as Justin Wilkes, Director of Policy at the European Wind Energy Association, explains:
“Offshore wind power installations were significantly higher than in the first six months of last year.
“But financing of new projects has slowed down with only one project reaching financial close so far this year. This, together with a lack of orders being placed for offshore wind turbines, substructures and components, reflects the regulatory uncertainty in key offshore markets including Germany and the UK. It highlights the significant challenges faced by the offshore wind sector.
“Offshore wind is a new industry that creates jobs, reduces fossil fuel imports and in which Europe is a world leader with huge export opportunities. The installation rate shows what the European offshore wind industry is now capable of. But to attract investment to the sector governments need to provide a stable regulatory framework and the EU should set a binding renewable target for 2030.”
So while construction activity was high for the first half of 2013 — and preparatory work for more wind farms already financed continued — financing for future offshore wind investment began to slow down. Only one financial transaction has been closed so far this year — the 288 MW Butendiek project in Germany, the first to take place since the grid delays issue in late-2011 — and activity in the UK is billed as “unlikely to pick up for the rest of the year”: delightfully playing down the uncertainty surrounding the offshore wind industry as it awaits the results of the Electricity Market Reform. In fact, the UK government is hoping for “around £110 billion of capital investment“, according to the Department of Energy & Climate Change, Department for Communities and Local Government, and Ofgem.
With falling equipment prices and fluctuating government involvement and restriction, renewable sector industries such as offshore wind are going to find themselves similarly fluctuating. Private investment into offshore wind projects is not an unlikely prospect for the growth of the industry, but energy uncertainties like those currently being experienced in the UK are creating economic environments unpalatable to investors.
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