European wind “needs CfD auctions” to meet targets

Technology-specific auctions with contracts for difference (CfD) support are essential if the European wind industry is to help achieve ambitious EU decarbonisation targets, WindEurope CEO Giles Dickson said today (2 June).

Speaking at the launch of the WindEurope 2022 industry conference and exhibition to be held in Bilbao next April, he said that CfDs are a "cheap and effective" model to ensure stable revenue for developers while keeping the cost of support low for governments.

He said he hoped that CfDs would become "the standard model of support for renewables across Europe". Countries that want to develop both wind and solar capacity should always run technology-specific auctions, Dickson insisted. "Forcing [wind and solar PV] to compete against each other does not make sense," he added.

Only last week, all capacity in a 350MW joint wind-and-solar tender in Greece was awarded to solar projects.

Juan Diego Diaz, president of Spanish wind association, AEE, agreed that "neutral auctions don't work". In Spain's January 2021 auction, the technology-neutral 1GW capacity pot was entirely bagged by solar PV, forcing prices in the wind-specific auction down to €20/MWh, well below the national wholesale electricity market price for 2020 of nearly €34/MWh.

"Wind should be the bedrock of Europe's energy transition," Dickson said. At this decisive time for the climate crisis, the wind industry is ready to show how wind is crucial not only to greening electricity in Europe, but also to helping decarbonise energy in transport and buildings, he added.

Siemens Gamesa CEO Andreas Nauen said that Spain has the potential to lead in promising technologies such as floating offshore wind and green hydrogen — two key technologies for Europe's decarbonisation.

Global wind power installations should reach about 390GW a year in 2030 and remain at a similar level into the 2050s, according to the International Energy Agency's (IEA's) latest net-zero roadmap.