The political will behind offshore wind power in northern Europe has reached unprecedented levels of support. High ranking government ministers and officials from no less than four countries -- Germany, Britain, Sweden and Denmark -- graced the European Wind Energy Association's Offshore Wind 2007 event with their presence in Berlin last month. All were looking to wind power, the maritime variety in particular, to deliver a major part of the European bloc's commitment to reducing carbon emissions and reliance on energy imports.
What became clear over the three day event was that if a target of 40 GW of offshore wind power by 2020 is to be achieved, it will require serious co-operation between the EU member states. Earlier this year they committed to passing legislation which would require the bloc to collectively produce 20% of its energy from renewable sources by 2020. That means raising the contribution of renewables to electricity supplies from about 19% today (mainly from largely exhausted hydro resources) to 35%. Wind is slated to contribute 12% of the total, one- third of that from offshore resources, delegates heard from Gordon Edge, who heads the offshore group at the European Wind Energy Association (EWEA).
To reach the 12% target, installed wind power must be raised from today's 50 GW to 180 GW. "This target cannot be met without large scale offshore wind," according to a new EWEA report, Delivering Offshore Wind Power in Europe. With the right policies in place, Europe could achieve 40 GW of offshore capacity by 2020, says EWEA.
Given the cross-border nature of offshore wind, "co-ordination" is a key buzzword in the report. It calls for increased co-ordination between countries on regulatory policies and a strategic interconnected grid system; co-ordination with other industries and users of the sea; co-ordination at EU and member state level on increased research and development; and increasing co-operation between regions to boost the offshore wind industry's hard pressed supply chain. EWEA says it is "confident" that technology suppliers are willing to invest to meet the demands of the offshore wind market "so long as there is a clear and credible pipeline of project work for these companies to bid for."
How to structure European markets to produce that pipeline is a bone of contention between governments and between the European Commission and some parts of the wind power industry (Windpower Monthly, December 2007). The issue was also a flashpoint at the Berlin event.
Sweden's energy minister, Maud Olofsson, said that green certificate trade had allowed electricity retailers flexibility in meeting the national green power mandate, "giving us the most renewables for the money." Sweden expects to reach 1 GW of wind in 2008 -- divided equally between offshore and onshore capacity -- and will add 2.5-3 GW of offshore wind by 2016, said Olofsson. British energy minister Malcolm Wicks also talked of driving the offshore wind market by awarding more certificates for power generated at sea than on land under the UK's Renewables Obligation legislation.
The references to certificate trade, however, were not well received by host country Germany and raised the ire of the German government's representative, Michael Müller, parliamentary permanent secretary at the federal environment ministry. He vehemently defended Germany's system of government-decreed power purchase prices for wind power, also offshore (page ??), and determinedly refused to countenance any reliance on market forces for deciding wind power's price.
Despite the disharmony, Müller, Olofsson, and new Danish minister for Climate and Energy, Connie Hedegaard, signed a joint declaration on co-operation in the field of research on offshore wind. The signing ceremony prompted Wicks to declare himself "a bit lonely," not being part of this "exclusive club." Müller hastened to explain the agreement had grown historically out of an initial co-operation with Denmark. All are welcome to join in, he assured. "It's sometimes better to let things grow than impose them from above."
The three countries, all with Baltic Sea coastlines, are to work on measures to "detect, reduce and mitigate" possible negative effects of offshore wind plant on marine ecosystems. They will also work together on integrating large volumes of offshore wind energy into the electricity system, including co-operation on grid development. "We have looked at the Baltic Sea situation very closely and the only viable solution is to connect all the offshore projects in the Baltic Sea to Sweden and to Germany and preferably to Denmark too," said Göran Lundgren, head of Sweden's Vattenfall Generation.
The necessity of cross-border co-operation became increasingly apparent as the conference got into its stride. Cable connections across the Baltic would involve transmission system operators from three countries with different offshore wind energy support systems. This would impose different obligations on the grid companies, which operate in separate electricity markets -- one in Scandinavia and the other in Germany. Several legal regimes may apply, also dependent on whether the cable is an interconnector or purely a transit cable, pointed out Martha Roggenkamp, an energy law expert at Groningen University in the Netherlands.
Based on gas industry experience, Roggenkamp expects bilateral or multilateral agreements on transmission to emerge among coastal states rather than the European Commission stepping in with a rulebook. Treaties on cross border oil and gas developments could be applied to electricity cables, she suggested.
While welcoming multilateral co-operation across borders, energy minister Hedegaard stressed the need for full "unbundling" across Europe of the business of electricity generation from electricity transmission. "We must separate the grid from the generation people," agreed Eddie O'Connor of Irish wind power development company Airtricity. If not, he said, Airtricity becomes a direct competitor to a company it is reliant on for grid access. EWEA's Edge urged for better co-ordination between European electricity market regulators. He also called for their powers to be increased. "The monopoly grid companies aren't going to look at curing problems until network regulation is sorted out," he said. Grid operators must develop common commercial and technical codes and security standards and plan and coordinate investments needed at EU level.
A long promised EU action plan for offshore wind will be released next year, said the Commission's Alfonso Gonzalez Finat, director for new and renewable energies. But whether it will be the starting point for better network regulation remains to be seen. Finat declined to go into detail.
Can be done
For its part, the wind industry is cautiously optimistic about achieving the EWEA goal. "It can be done, we are gearing up," said Andreas Nauen, head of wind power at Siemens. "This means eight times five hundred megawatt every year. At the moment it looks scary but we have a few years, I'm sure it can be done." In pondering the prospect of installing 3 GW of offshore wind power a year, Vestas' Bo Mørup claimed that in theory, "We could do all of it. We'll reach five gigawatt output this year and plan to increase at 20%/year," he said. "All parts in the supply chain need to make money doing this," he cautioned.
Airtricity's O'Connor had no doubts. "I see us powering through forty gigawatt on our way to two hundred to three hundred gigawatt, since after 2030 there'll be no more fossil fuel plant," he said. He was sure the 27 member countries of the EU could do it, although judging by the modest show of registered participants from southern Europe, it will be the northern countries pulling the load.
"For the industry to grow capacity and meet expectations, it's crucial that more countries join in with offshore wind alongside Denmark, the UK, Netherlands and Sweden," said Kaj Lindvig from A2SEA, which provides specialist turbine installation vessels. "For the first time, the market is beginning to show some confidence and orders for turbine and other reservations are being placed for three years ahead," he said.
Nauen noted that with bigger offshore orders, the "tailor made approach" can go and production can become more like assembly line work. Coupled with standardised contracts with customers and suppliers, the approach "can help get the waste out of the system to get costs under control," he said. For investors that would be good news. Per Holmgaard of Dong Energy, which owns operating offshore wind farms in both Denmark and the UK, said "reasonable payback" was needed to cover the risk. "There has to be the will to pay or we'll never get the several thousand megawatt per year. But economies of scale should see a stabilisation of price, we could even expect prices to decrease -- but not a lot." Cost reduction, however, is essential. "We'll need to decrease, otherwise we'll get into trouble, we have to come down with the prices," said Holmgaard.
Creating enough confidence in the market to trigger the needed investment in logistics and infrastructure was a key discussion point in Berlin. Nauen said the ramp-up was already happening. Siemens is on the way from production of one 3.6 MW machine in 2004, to 25 machines in 2007 to over a 100 in 2010. "The onshore industrialisation takes six to seven years," he pointed out. Building coastal turbine assembly facilities, perhaps in co-operation with tower and foundation suppliers, is a big step, said Nauen. "You need to be convinced that there is a large enough market to take the step."
Whether the offshore wind industry will continue to develop at national level or as a European enterprise remains to be seen. "In 2010, we need twelve to fifteen sea-going crane vessels for installations," said Lindvig, with EWEA's 40 GW target in mind. Vestas' Mørup believes it will happen. "If the market is there the supplies will be there. It's capitalism, not brain surgery," he said.
But more co-ordination across borders on transmission networks is vital for the future of offshore wind, said Peter Jørgensen of Energinet Denmark, a transmission system operator (TSO). He called for timely involvement of TSOs across Northern Europe to tackle congestion created by offshore wind and to build a strong transmission grid over a large area.
"We need co-ordinated planning of offshore wind with grid deployment," he said. TSOs will have to create more system flexibility in both generation and consumption to absorb more wind power into grids via new technical grid codes and market-based incentives. Ideally he would like to see a single a market design supporting wind power in Europe. "We need trade and efficient congestion management close to the hour of operation."
Jorgensen also called for increased research and development aimed at making sure the transmission wires could cope with future demands. "We need a new system architecture and closer integration of national energy systems," he said. But he warned that lead times for new infrastructure are a problem; it can take up to 15 years of planning and permitting before a new overhead transmission line can be built.
So far, most offshore wind generation is planned off northern Europe. A question left unanswered in Berlin is whether there is enough load to take all the power. From Danish transmission operator Energinet, Anja Orths assumed some of Denmark's surplus wind power will be exported north to Norway. But in outlining plans for development of Norway's offshore resource, Magnus Korpas of Sintef Energy Research assumed that any surplus will flow south to Denmark.
Storage was aired as a solution. From Stuttgart university's energy institute, Christop Kruck said the cost of compressed air storage facilities, with capacities of 300-500 MW each, would add about EUR 1/MWh to the cost of offshore wind by 2020-2025 for provision of 2.5-3.5 GW of stable generation capacity. The cost, said Kruck, was about the same as increasing reserves to cover the extra uncertainty in supply and demand that wind adds to the system. His estimate ties in with the preliminary results of a large study of wind power integration underway for the International Energy Agency, which puts the cost of balancing a system reliant on 20% wind power at EUR 1-4/MWh.
Looking even further ahead, Bernhard Lange from ISET, the German institute for solar energy technology, described a project undertaken with grid operator E.ON Netz on how to manage the German electricity system during periods of high wind power production and low demand when all electricity would come from wind power. It was quite feasible, he said.