Germany’s 2020 wind target as set out in its National Renewable Energy Action Plan (NREAP) totals 45.75GW — 10GW offshore, and the rest from onshore. By 2015, wind capacity is expected to reach 34.8GW, of which 2GW will be offshore.
By the end of last year, Germany’s capacity had reached 27.13GW — 92MW offshore and 27GW onshore, showing a 550MW shortfall on the expectations of the National Renewable Energy Action Plan, set out two years ago for the European Commission. The plan proposed a starting point of 27.63GW for 2010, of which 27.53GW would be onshore, and 150MW offshore.
To get back on track and achieve the 2020 target, wind energy needs to grow at an average of just over 1.8GW/year, of which just over 50% is expected to be offshore. Average annual growth of wind energy in Germany over the five years to 2010 achieved this level of progress, but offshore played only a small role, which will now need
Although offshore wind has barely left the starting blocks, the action plan expects it to develop at a faster rate now than onshore wind. Onshore’s expected annual rate of growth of 822MW is only around half that achieved over the past five years.
"Through the last decade, the Renewable Energy Act has proved itself a very stable instrument for expansion of renewable energies, and this needs to continue if we are to achieve the NREAP targets," says German wind energy association BWE. Renewables projects must continue to take priority in network connection and in electricity feed-in as well as transmission and distribution. The annual modest decrease in renewable power feed-in tariffs must continue as set out in the country’s renewables act, BWE stresses. The federal states also need to make new areas available for onshore wind, it adds. BWE is carrying out a study into the potential of onshore wind, to be published in April 2011.
In contrast, 10GW offshore by 2020 looks ambitious, not least because of the financing problems that arose during the economic and financial crisis that began in mid-2008, says BWE. Offshore wind has also suffered delays caused by the challenges of siting large wind projects far out to sea in deep water to avoid the marine protection areas stretching along most of Germany’s North Sea and Baltic Sea coasts.
There is optimism, however. "We believe the 10GW offshore can be achieved," says Ronny Meyer, managing director of Bremen wind energy agency WAB. "If you look at how onshore wind energy has developed from zero to where it is now and apply this to the offshore sector, then it can be done. It’s ambitious but realistic — but only if the framework conditions are right. Without some adjustments to current conditions, we’ll only reach 6GW or 8GW."
The first of these conditions is that the "sprinter bonus" needs to be available for a longer period, says Meyer. This additional payment to encourage faster development expires in 2015. Without an extension, many offshore wind stations will not be economically feasible and so will not be built. The return on investment has to be right, he stresses. "After all, we are in competition with other countries such as the UK.
"Currently, the return on German offshore projects is about 7%. Returns are not only higher on offshore investment in the UK but also on other infrastructure investments, where returns can reach 11-12%. Companies will put their money in these rather than in German offshore projects unless returns on offshore wind investment are attractive."
Second, Germany does not yet have the required port capacity to install offshore wind stations, points out Meyer. Incentives are required to get the ports properly equipped, be it through financial guarantees, grants or cheap loans, he says. While he admits that some of Germany’s offshore wind stations could be built from the UK or Dutch ports, he believes working from German ports would be beneficial.
A third issue is the electricity transmission network, which needs to be expanded rapidly to take up offshore wind power and deliver it to the busy urban centres in middle and southern Germany. "We don’t have a ten-point plan to speed progress but, most importantly, all parties — including local citizens affected by new cable projects — need to get around the discussion table. If they don’t participate, ensuing court appeals will tend to slow progress even further," Meyer says.
Finally there is the issue of connecting offshore wind stations to shore. The cable cost is rolled over to electricity customers in network usage charges. Germany’s regulator, the federal network agency, aims to keep costs low, reducing the return on investment and the incentive for transmission system operators to build. Although the creation of clusters of offshore stations to be connected by a joint cable link to shore will help, progress on cables is still slow, says Meyer. "We need an investment incentive for construction of the cables to counter the regulator’s emphasis on keeping costs to a minimum," he warns.