For many countries, a combination of constrained financial markets and local bureaucratic inefficiencies have combined to slow the rate of new installations. Chief offenders in this respect among the larger EU states are Germany and France. In Germany, the main reason why the country may fail to meet its target is the slow rate at which development zones are being tendered. It is a similar story in France, where offshore policy has changed three times in the past decade.
Countries such as Spain and Italy are suffering under weak economies where offshore wind is no longer seen as a priority. However, offshore development continues apace in the UK, while Poland could potentially have installed four times its NREAP target by the 2020 deadline.
THE BIG THREE
The UK, Germany and Denmark together have 24.3GW of offshore capacity pledged by 2020 under their NREAPs. The UK and Denmark appear well on course to meet their obligations, but Germany shows signs of falling short of its target, perhaps set over-optimistically in view of the wind farm locations that are mostly located in deeper waters far out in the North Sea.
Within the EU, the UK set the most ambitious 2020 offshore target of 12.99GW. By laste 2012, total capacity was 2.36GW, according to trade body RenewableUK, and was expected to have reached about 3GW by year end.
The strong importance attributed to offshore wind was underlined by the UK government's renewables road map of 2011, which heralded an even more ambitious target of 18GW offshore wind to be operating by 2020. Furthermore, the Crown Estate, which manages the seabed out to the 12 nautical mile national limit, is "working to deliver 25GW of capacity, either completed or under construction, by 2020".
Germany's offshore aim is more modest at 10GW, but it faces bigger challenges because almost all offshore wind sites have been forced tens of kilometres out to sea to avoid encroaching on coastal nature protection zones.
Delays have been widely attributed to transmission cables not being built on time. But transmission system operator Tennet, responsible for grid connections for projects in the North Sea, denies this, saying in autumn 2012 that it had 5.5GW of offshore cable capacity installed or under binding contracts, and another 2.7GW being negotiated. Under legal arrangements, another 1.8GW of cable capacity needed to be put up for tender before the end of 2012 and, with current delivery times, that would allow 10GW of connection capacity to be ready by 2018 to meet the German target.
This exceeds what would be required, points out a spokesman for Tennet: "The federal wind energy association only expects 6-7GW of capacity to be ready by 2020." A spokesman for German wind energy association BWE confirmed this: "Ten gigawatts is unlikely."
To achieve the political target of 13GW of offshore wind by 2022, one turbine needs to be installed every working day, which is not realistic, the Tennet spokesman said.
Other reductions come through use of smaller turbines. Operator Vattenfall's decision to use 3.6MW turbines rather than the planned 5MW models for its 80-turbine Sandbank project, due to start construction in 2015, reduces output from 400MW to 288MW.
Denmark set a much smaller NREAP target of 1.34GW by 2020. By mid-2012 it already had 865MW in operation - 65% of its target. Eight small near-shore sites totalling a potential 500MW were identified for development by the Danish government in September. These, combined with another 400MW at the Horns Rev project and 600MW due at the Kriegers Flak site, mean that Denmark looks likely to soar past its offshore target.
North Sea outlook
The UK, Germany and Denmark all hope that the often weak economies of their coastal towns can be rejuvenated by new business and jobs from offshore wind developments. German and Danish ports are already competing to provide facilities for service and maintenance of the North Sea offshore wind farms.
The Baltic Sea countries - Poland, Sweden, Finland, Latvia, Estonia and Lithuania - have committed to just over 2GW of offshore wind capacity in operation by 2020. Although Poland's official NREAP target is modest, if massive industry plans are implemented, it could top the six countries' joint target on its own.
Poland's 2010 national plan foresees 500MW offshore by 2020, and implementation of the first 200MW may begin before the end of 2016. Last summer, three companies were awarded licenses by the infrastructure and maritime ministry last summer: utility PGE Energia, which aims to build 1GW by 2020, with 2.5GW more in the pipeline; investment firm Kulczyk Holding, which plans 1GW online by 2020; and energy firm PKN Orlen, which plans 150MW by 2020, with 1.9GW to follow.
According to a Polish treasury ministry report transmission system operator PSE says the grid can integrate 1GW of offshore wind, and add another 2GW of integration capacity by 2025 with a relatively small outlay. Expanding beyond 3GW would require much more effort - disappointing news for companies that have lodged expressions of interest for a massive 31GW of offshore wind projects with the economy ministry.
In its NREAP, Sweden committed to 182MW of offshore wind power by 2020 and had already reached 160MW in 2012. While likely to reach its 2020 target, it may be disadvantaged thereafter as up to 20GW of onshore wind projects are fighting for connection to the limited capacity of the national grid.
Latvia's national plan targets 30MW of offshore wind operating by 2016 rising to 180MW in 2020, both achievable. The Baltic Wind Park company's first 200MW development near the western coast of Latvia, within 70 kilometres of the city of Liepaja, is progressing and could be on course for commissioning in 2018.
Estonia expects to have 100MW of offshore wind commissioned in 2016, rising to 250MW in 2020. But a first 310MW project planned by Canadian developer Greta Energy was put on hold last summer, so the country's chances of hitting its NREAP target are unclear.
Lithuania made no commitment to develop offshore wind in its national plan. Nor did Finland, but it did include an unofficial target of 900MW by 2020. In October 2012, the Finnish government proposed a one-off €20 million incentive for an offshore project, the sum to be approved by parliament in 2013. Companies will compete for the incentive on top of the standard onshore wind support, but this sum looks too small to kick-start any substantial offshore wind activity.
The Baltics outlook
Among the Baltic countries, Poland seems most advanced in identifying advantages of offshore wind that outweigh the benefits of cheaper onshore wind and make it worthwhile pursuing it strongly. If its ambitious plans are implemented, a positive impact on jobs and the economy along the Baltic coast could be apparent within the next ten years.
The other countries either have existing substantial hydro or nuclear capacity - Sweden and Finland respectively - or, as in Lativia, Estonia and Lithuania, could do with stronger cross-border network integration to allow more electricity trading and potentially more efficient use of offshore wind generation.
While miracles can happen, it looks increasingly unlikely that France will meet its offshore target of 6GW by 2020. The country has committed to generate at least 23% of its energy consumption from renewables by 2020 but has not yet installed one turbine offshore.
Part of the explanation lies in the changing offshore policy - three times over a decade. The first attempt at competitive tenders in 2004 resulted in one offshore project being awarded. It struggled against a still-evolving permitting process before stalling in the courts. The government then introduced a premium purchase price for offshore wind in 2006, setting the tariff at only €0.13/kWh for the first ten years, varying over the next five according to the number of operating hours. While this was acceptable for large, well-designed projects on good sites, the industry judged it too low elsewhere.
Before that policy could bear fruit, the government reverted to competitive tenders, arguing that this would give greater visibility and promote public support by creating an industrial base. It hoped to simplify matters by identifying dedicated zones, selected on the basis of wind resources and constraints. It launched a call for 3GW in 2011, split between five zones, of which four totalling 1.9GW were awarded. A call for 1.3GW was due at the end of 2012.
While winning bidders will have the right to operate and sign a 20-year offtake agreement with utility EDF, they must still go through a permitting process, not all of which is yet in place. Questions remain over grid connection regulations, and when the authorities will grant final concession permits, although developers are hoping to receive them by the end of 2014. This would allow final investment decisions in 2015, with construction starting in 2016.
Another issue is the grid connection timetable. Although the first turbines are due to start turning in 2018, developers warn that grid operator RTE will not have the connections in place before 2019 - possibly later if the connection approvals are challenged in the courts. The projects themselves are also likely to come under attack. Already, France's vocal anti-wind lobby has appealed against the terms of the tender and announced it will challenge the offshore projects.
Employment in the French offshore sector should ramp up from 2015 onwards, with construction in factories from French firms Alstom and Areva, and site preparation beginning on the first four projects.
With no capacity yet installed in Italian waters and a shortage of advanced projects in the pipeline, the country's 680MW 2020 offshore target looks ambitious. Authorisation difficulties top the problems facing developers, while the deep seas around much of the Italian coastline present technical challenges that could obstruct development.
"The question of authorisations is the most serious one for offshore projects," says Andrea Marchisio, a partner at renewable consultancy Elemens, who notes that the process is slow. This is despite the national government taking over responsibility for authorising offshore projects from the regions a few years ago to facilitate approvals.
A number of developers have continued to persevere despite difficulties indicating that wind resources at planned offshore wind farms are sufficient, says Marchisio. The incentive prices offered for offshore projects are also attractive, adds Luca Wagner, general manager at offshore developer Effeventi.
A new market framework sets a base auction price of €165/MWh for offshore wind farms. It also puts a 650MW capacity limit to which the feed-in tariff (FIT) can be assigned in the 2013-2015 period. Yet with a shortage of projects, offshore bidders expect no problems achieving a price near the maximum, and the capacity limit is not a pressing concern. On top of the base fee, notes Wagner, an additional €40/MWh payment is offered for companies choosing to cover grid connection costs. The tariff is set for 25 years.
Gaetano Gaudiosi, president of offshore wind association Owemes, says Italy's offshore potential is significant, but concedes that the biggest potential is in deeper waters, where technology is still at an early stage. In 2007 the Italian government was estimating 2GW in offshore wind capacity by 2020, but when the final target was set in 2010, it had fallen by two-thirds.
A handful of projects, including one deepwater site, have received environmental impact clearance and could theoretically participate in the first offshore FIT auction. But, given the lack of projects at the ready-to-build stage, the auction is expected to be poorly attended. Effeventi's 162MW planned wind farm, off the Molise coast, has been blocked for years in court amid regional opposition, but would be Italy's first fully authorised project if this year's court ruling is favourable. It would be too late for the first FIT auction but could pave the way for Effeventi's project to be built and Italy's offshore wind sector finally to get started.
Unless the offshore sector starts moving or the government takes a strong policy decision to promote the sector, Italian offshore projects are likely to make only a limited contribution to the country's economy and its jobs market for the foreseeable future.
Commercial offshore wind projects in Spain date back to 1998, with 7-8GW now lined up. Yet the current offshore target, set in the 2020 renewable energy plan is for just 750MW, down from 3GW in the 2010 NREAP.
The realisation of even the much reduced target, however, is not likely in the foreseeable future, says Alberto Cena, technical director at national wind association AEE. "If we can't afford to properly support cheaper onshore sites, much more expensive offshore doesn't stand a chance," he says.
Strong Spanish wind industry players, especially energy giants Iberdrola and Repsol, have lined up multi-gigawatt offshore stakes in the UK, France and Germany. But Cena says deployment at home in Spain will be restricted to research-and-development prototypes and demonstrators, especially in floating turbine technology - at least until Spain's economic future becomes more stable.
That floating turbine niche stems from necessity, due to the extremely deep waters close to most of the Spanish coast. It is also widely considered a way to keep Spanish technology engaged for a future deep-water offshore takeoff, at home and abroad.
Recently, the government granted environmental approval for the first shallow-water, fixed-foundation 20MW phase of the Zefir offshore wind test station project in north-east Spain. Zefir is being developed by the regional government research institute, IREC, which plans a 50MW deep-water floating second phase.
IREC director Antoni Martinez laments, however, that Spain's moratorium on renewables subsidies scuppered plans to start building phase one in 2012. He hopes that offshore research projects will be granted special status, and believes that the lack of a clear signal on this is the reason Brussels finally dropped Zefir from its shortlist for €30 million funding through the EU's NER300 programme for innovative low-carbon technologies.
Meanwhile, developer Acciona plans to install a 1.5MW floating turbine later this year in Spain's Bay of Biscay, as part of the €19.8 million HiPRWind project, backed by 18 other European companies and €11 million EU funding. Acciona and energy firm Alstom are also collaborating in the Azimut project to 2015, led by manufacturer Gamesa and aimed at producing design basics for offshore turbines of up to 15MW. Iberdrola is also developing a floating turbine platform with Acciona and Alstom in its Emerge programme.
Commercial offshore projects are not expected to be opened to tender until 2014, followed by a two-year selection process. Even then, with drastic cuts to renewables expected when the current moratorium is lifted, there are no signs that a viable pay scheme will be in place. Zefir developers believe the best hope for offshore is if the government bows to demands to fast-track research projects.