When politicians dither, financial markets get nervous. When banks hesitate to lend, businesses struggle. If job prospects are dim, consumers spend less, which slows down the whole economy. There you have a perfect but vicious circle.
Speaking to delegates at the European Wind Energy Association (EWEA) offshore gathering in Amsterdam a few weeks earlier, the trade body's president, Arthouros Zervos, urged Europe to grab the chance to be a technology leader in this sector for years to come. He added this was an opportunity Europe could not afford to miss. Wind power has already shown it can act as a big driver for industrial growth and job creation. Offshore wind, with the added challenges of the marine environment, could do so on an even larger scale.
But the offshore wind sector needs scale to thrive. A capital-intensive industry cannot exist without growing to a size that will give players at all levels the confidence to plan for the long term.
As the history of any industry will confirm, technological and manufacturing problems can be overcome with the right conditions in place. The crucial ingredient in this case is money. Nothing much is going to happen unless financing is available to buy the turbines, get the staff and equipment in place to install them and run an adequate operations-and-maintenance regime.
When you talk about the kinds of sums required to build and run a large offshore wind farm, it soon becomes clear that utilities' spreadsheets, which have funded the bulk of onshore developments, will no longer do. Deep-pocketed investors such as pension funds are needed. Professional investors, however, will only get involved when they feel they have sufficient clarity about the future, which takes us back to the need for policymakers to give the sector a clear sense of direction.
Studies underpinning the EU energy roadmap to 2050, which was unveiled on 15 December, reveal that a low-carbon energy future for Europe will be no cheaper with nuclear, gas and coal power than with renewable energies and energy efficiency at its heart. This is despite a clear bias towards traditional energy sources in the assumptions that were made, including an expectation that offshore wind will be as expensive in 2050 as it is today.
Cost of energy is undoubtedly the biggest challenge wind power faces today. The good news is that all stakeholders are well aware of this and are working hard to improve the industry's performance. As our cover article on the cost comparison between energy sources demonstrates, the best onshore wind is already competitive with all traditional sources, while the best offshore is not far off the cost of nuclear.
Several speakers at the EWEA event pointed out that offshore wind needs to minimise failures and accidents, and show that it is serious about achieving significant cost reductions.
If European politicians can deliver on binding targets for renewables beyond 2020, greater harmonisation between transmission networks and attractive financial frameworks for investors, wind has the potential to provide a prosperous way out of the vicious circle.
Nadia Weekes is editor of Windpower Monthly.