Bringing some hope at the end of last month, the federal shipping office, Bundesamt für Schifffahrt und Hydrologie (BSH), granted two new authorisations -- with conditions attached -- for neighbouring pilot projects in the North Sea from Energiekontor and Plambeck Neue Energien. Another three decisions are likely in the short term. Energiekontor's Borkum Riffgrund West pilot project, of 80 turbines up to 5 MW in size, can proceed once a cable permit has been granted for the route through a coastal nature park; the company must also satisfy authorities on other engineering details. It expects to start construction in 2006/2007. Plambeck -- which plans to use the same cable route -- received similar approval for its Borkum Riffgrund pilot of 77 turbines totalling up to 277 MW, with erection set for 2006.
NEARLY 70 GW IN PROCESS
Altogether, around 24 applications have been lodged for projects in the German North Sea outside the 12 nautical mile zone, totalling 64 GW. A few of these -- such as a 3 GW plant proposed by Plambeck -- are unlikely to be firmed up for at least a decade. Another four projects totalling 477 MW are under development within the zone. In the Baltic Sea, six projects of a combined 3475 MW are earmarked outside the 12 nautical mile zone and another four plant are within the zone for a total 149 MW. Germany has set a target for 3 GW of offshore wind energy installed by 2010.
There is a bright side to the slow German progress, at least according to some. "Preparations for German offshore projects and getting them connected to the network on land needs a lot of time," says Stefan Küver of PricewaterhouseCoopers Corporate Finance in Hamburg. "But in the meantime, international projects already underway will provide valuable input for getting German projects bankable." Data gathered from offshore stations elsewhere will help to set the parameters for successful projects in Germany. "Every bit of experience counts in getting a track record for financing," he says.
Two of the three major energy companies with substantial involvement in German offshore developments are foreign. Dutch utility Essent, which acquired wind developer Winkra in 2002, has two projects slated. Energi E2, which built the 165 MW Nysted offshore plant in Denmark last year, clinched a joint venture in October with Plambeck Neue Energien. The third big company with offshore development in mind is German firm E.on Energy Projects, a subsidiary of giant energy company E.on. It has a hand in various projects, including the 72-turbine Nordsee Ost, still lacking a permit.
"Much will happen in the next two years," predicts Küver. Banks, investors and insurers have been primed by a series of Offshore Finance Circle workshops attended by, among others, 15 German banks. "For an offshore wind station investment of EUR 300 million, it would be normal [in Germany] for up to ten banks to be involved," says Küver.
The biggest risks, on both the technical and economic fronts, lie in the time-consuming development and testing of new offshore technology and the costs of connection to the electricity network. "German insurers, in particular, tend to have a more negative attitude to offshore projects," reports Thomas Michahelles of Marsh insurers branch in Hamburg.
Küver says wind measurements providing data on potential electricity output and the fixed price system set by the renewable energy law "provide sufficient basis" for costing projects and "initial findings indicate that economic efficiency is sufficient for project financing."