Offshore wind development in Europe seems to have a momentum all of its own. The European Wind Energy Association (EWEA) predicts 40 GW of wind plant will be operating in European seas by 2020, requiring around 4 GW of capacity to be installed every year over the next decade. The collective ambition of European Union (EU) member states makes EWEA's estimate look modest, however. Almost 1.5 GW of wind turbines are already operating in European seas. Over 3 GW is in construction. And with more than 50 GW at various stages of development, Europe's wind developers show no lack of willingness to continue taking to the water - even in the face of increased costs, a lack of grid infrastructure and major technical challenges.
The attractions of developing wind farms at sea are many. In addition to the stronger, more stable wind resource offshore, undeveloped onshore sites are becoming increasingly scarce in some countries, while in others offshore wind offers fewer troublesome neighbours and a better chance of securing construction permits. Add to this the pressing need for countries to meet new national renewables targets, the potential of the burgeoning offshore wind sector to create new national industries and jobs, and its contribution to secure energy supplies, then it is no wonder that governments see the sector as crucial to their energy portfolios.
But the key driver is Europe's 2020 goal for 20% of all EU energy to come from renewables (Windpower Monthly Special Report, Europe 2020, March 2009). While the transport and heating-and-cooling sectors will have to play a part in meeting the target, the biggest contribution will have to come from the electricity sector. Over one-third of all EU electricity will be generated by renewables. Wind power will play the leading role, supplying some 34% of all renewable electricity, with two-thirds coming from onshore plant and one-third from offshore, says Europe's executive arm, the European Commission (EC), in its renewable energy road map.
The countries most gung-ho in their determination to take full advantage of this new technology are the UK, which currently leads the world in offshore capacity (Windpower Monthly Special Report, UK Offshore, June 2009), and Germany, as yet with few offshore wind turbines operating but big ambitions to catch up. Belgium, which has only a limited onshore wind resource, is aiming for the maximum offshore deployment possible, while the Netherlands also needs to see more new development offshore than onshore, aiming for 6.5 GW in its waters (table).
Meantime Denmark, for many years the world leader, is reviving its offshore programme with a modest aim of 400 MW of new capacity by 2012, but as yet no detailed plans beyond that date (page 12). The French government needs to do more work to smooth the way for wind farms around its considerable coastline, but developers are already jostling for sites along France's northern and Atlantic coasts. Sweden, one of the early movers in offshore wind, has let its advantage slip; the wind lobby is now urging the government to boost its financial support for the sector (page 16). European newcomers that are just dipping their toes in the water include Spain, Italy and Portugal.
With the cost of building offshore wind farms around double that for onshore (page 7), it is notable that the companies most active in the sector are those with deep pockets - in particular European utilities, able to finance on balance sheet. This is most marked in the UK. All of the 13 projects either operating or in construction are owned by utilities, as are the 12 totalling 5 GW that are consented or awaiting a government decision.
The picture in mainland Europe is more mixed. Here, smaller players are finding their niche in the sector, some aiming to take stakes in the multi-million euro - and billion euro - projects. Meanwhile, Belwind's successful project financing of the first 165 MW phase of its Bligh Bank wind farm off Belgium, the first project financing package to be closed since the credit crunch, shows that independent power producers might be able to survive alongside the big boys (Windpower Monthly, September 2009). The Belwind deal is interesting for another reason: it marks the European Investment Bank's (EIB's) entry into offshore project financing, although since 2004 the EIB has also loaned funds to four other offshore wind projects developed by utilities.
Yet perhaps the biggest challenge to large-scale expansion is integrating huge quantities of offshore wind into the European grid. The offshore infrastructure will require billions of euros of investment - not to mention the onshore wires needed to accept the new generation.
Governments are tackling the problem of the offshore connections in different ways. The UK is developing a competitive offshore transmission regime with developers paying for the connections through grid charges. Germany, Belgium and Denmark simply require network operators to build the wires out to offshore wind farms and shoulder the cost. But these national solutions usually comprise national radial connections to just one project at a time. The vast amount of offshore wind capacity planned will demand a different approach.
What is needed, according to the EC, is more cross-border co-operation on offshore sites, and grid planning between countries and national transmission system operators (TSOs) and regulators. Moves are afoot for just such a joined-up approach to the wires. Part of the solution being pushed by the EC is an offshore grid that would interconnect Europe's national electricity networks via subsea cables and hook up offshore wind farms in the process. This European "supergrid" would also improve the functioning of the internal electricity market, a key goal of the commission.
A blueprint for an offshore grid in the North Sea is due from the commission in 2010. This will become one of the building blocks of a European supergrid. Already working towards the vision of an offshore grid is Georg Wilhelm Adamowitsch, the EU-appointed co-ordinator given the job of speeding up development of a grid in the North and Baltic seas that will connect wind farms and provide cross-border interconnections. Now two years into his unpaid appointment, Adamowitsch doesn't underestimate the challenge ahead. He points out that around the North Sea, which has most potential for offshore wind, every country is looking at a national solution to connecting its own wind farms. "This is not a European solution," he says.
Adamowitsch proposes developing an offshore grid in modular form, to include Norway with its flexible hydro capacity to help balance the system. But as a first step, a test case to develop best practice is a project to interconnect a cluster of three separate wind farms in the Baltic Sea. Krieger's Flak, totalling 1600 MW, is located at the boundary between German, Danish and Swedish waters (page 10).
As Adamowitsch observes, the project involves "three different governments each with different electricity and climate protection targets, three different regulators, three different TSOs and a lot of investors."
The cheapest grid solution would be for straightforward connections from each project to its national mainland, he says. But An Analysis of Offshore Grid Connection at Krieger's Flak in the Baltic Sea, a pre-feasibility study by the TSOs involved - Denmark's Energinet.dk, Sweden's Svenska Kraftnat and Germany's Vattenfall Europe Transmission - has found that connections that would allow three-way trading between the countries would carry a socio-economic benefit that would more than compensate for the increased cost, he explains. This is borne out by EWEA's TradeWind study earlier this year, which found that improved interconnection between countries could save up to EUR1500 million every year in system operation costs, regardless of whether more wind is connected at the same time.
To push the Krieger's Flak project forward, the EU is allocating EUR150 million for a joint interconnection under Europe's economic recovery plan. A further EUR165 million of economic recovery money is also available to be shared between a maximum of five offshore transmission projects that could form the basis of an offshore grid in the North Sea. Already a number of international wind farm developers and wires operators are looking at separate interconnector links between wind farms and onshore grids in different countries. These are likely to be bidding for the money and include developers Mainstream Renewable Power from Ireland, Scottish and Southern Energy subsidiary Airtricity and Germany's RWE, as well as several offshore networks companies.
The EC is also looking to beef up funding for new transmission networks. Under the current funding framework, trans-European energy networks (TEN-E) receive just EUR155 million for the period from 2007-13 while over the same time frame transport networks (TEN-T) receive EUR8.013 billion. In the coming year, the EC plans to introduce a new funding framework called the EU Energy Security and Infrastructure Instrument. This will ensure the transmision grid is developed to allow Europe to meet its future renewables objectives, it says.
Meantime, a greater degree of cross-border co-operation is anticipated from the TSOs under recent EU legislation. A new organisation has been formed, the European network of transmission system operators, comprising 42 TSOs from 34 countries. Next year it is to publish a ten-year network development plan to deliver the 2020 renewables' targets.
What is not yet known is how ambitious this will be in setting out plans for a truly interconnected pan-European grid capable of accommodating large amounts of renewables and offshore wind, says Justin Wilkes from EWEA. "Is this first ten-year network development plan going to be just 34 national plans or are they sitting down and saying: where do we want to be in 2020?" he says. "How much European added value is there going to be?"
More cooperation is also expected from energy regulators. The Agency for the Cooperation of Energy Regulators is to be a new EU body with the job of paving the way for a regulatory framework for an integrated European grid.