Winds of change: Seven key statistics of Europe's booming offshore wind industry
A new report released today (6 February) from WindEurope highlights a record year for Europe and UK offshore wind projects. Diving into the data, edie brings you seven surprising statistics, from the continent's booming offshore industry.
Offshore wind is quickly becoming a mainstream energy source for nations, with installation costs tumbling at record rates. The UK enjoyed its “greenest year ever” in 2017, and offshore projects played a big part in that.
Across Europe, the trajectory also looks promising, with WindEurope’s latest report outlining huge growth in the market.
Wind Europe’s chief executive Giles Dickson said: “Offshore wind is now a mainstream part of the power system. And the costs have fallen rapidly. Investing in offshore wind today costs no more than in conventional power generation. It just shows Europe’s ready to embrace a much higher renewable target for 2030. 35% is easily achievable. Not least now that floating offshore wind farms are also coming on line.”
But as 2020 deadlines for European-based renewables policy close in, how do current and future trends stack up? edie has looked through the report to bring readers seven key takeaways from Europe’s booming offshore wind industry.
UK the leader in offshore wind
Of the new capacity added to the grid in 2017, the UK and Germany accounted for the most, adding 1.7 GW and 1.3 GW respectively. But it is the UK that leads the charge for offshore wind projects, accounting for 53% of all net capacity brought online. In fact, 67% of all net capacity installations occurred in the North Sea.
A further 400MW deriving from UK Round 3 projects will connect to the grid in 2018. The offshore market will continue to centre around the UK, as the nation adds 3.3GW of new grid-connected capacity by 2020 – well ahead of Germany’s scheduled 2.3 GW pipeline.
Europe’s capacity grew by a quarter
More than 3.1GW of net capacity was connected to the grid across Europe in 2017, taking total capacity on the continent to 15.8GW. This represented an increase of 25% in just one year and was 4% higher than the previous record in 2015.
Europe now has more 4,000 offshore wind turbines operating across 11 countries. A total of 13 new windfarms were completed – including the world’s first floating offshore windfarm in Scotland. Another 11 projects are also scheduled for construction, which will add another 2.9GW. WindEurope predicts that by 2020, Europe’s offshore portfolio will hit 25GW.
Five countries account for nearly all projects
Despite the record growth, offshore wind across Europe is heavily concentrated within a small cluster of countries. In fact, 98% of offshore wind capacity comes from the UK, Germany, Denmark, the Netherlands and Belgium.
The UK accounts for the largest amount of installed offshore capacity across Europe at 43%, with Germany following at 34%. Despite adding no new projects in 2017, Denmark sits third with an 8% share, in front of the Netherlands (7%) and Belgium (6%).
Investment is down, but that might not be a bad thing
In 2017, investment into new European offshore projects fell by almost 60%, with final investment decisions (FIDs) granted to a further 2.5GW of capacity. These investments total just €7.5bn, but WindEurope notes that this reflects the falling costs of the technology rather than a lack of appetite.
In fact, new investments were still able to access feed-in-tariffs in 2016, which reduced costs further. Auctions held over the last two years should create FIDs totalling €9bn in 2018. As for refinancing, investment hit record levels of €4.6bn, bringing total sector investment to more than €12bn.
France set to become a world leader
According to the report, France officially inaugurated its first offshore wind turbine in 2017 – creating a total of 2MW of net installed capacity. However, with President Emmanuel Macron pledging to increase the nation’s renewable energy portfolio, rapid acceleration is expected. WindEurope predicted that France will become the second largest market by 2021.
Projects off the French coast are expected to expand and accelerate from 2020, potentially turning the nation into Europe’s fourth-largest offshore wind generator by 2030. Around 4.3GW of net capacity is pipelined over that decade.
Siemens Gamesa has control in Europe
In regards to manufacturing and construction, Siemens Gamesa Renewable Energy currently accounts for 51% of new installed capacity. MHI Vestas is some way off, with a 24.7% share of the market. While more manufacturers entered the market in 2017, the two companies still accounted for more than three-quarters of installed capacity.
Regarding connection and ownership, Ørsted – formerly DONG Energy – connected the most megawatts to the grid in 2017, gaining a 19% markets share of ownership in the process.
The market needs policy clarity
WindEurope’s report warns that the number of grid-connected projects will fall around 2020, due to European Member States meeting National Renewable Energy Action Plans under the Renewable Energy Directive.
In the short-term, Belgium and Denmark are expected to add between 1 to 1.3GW of capacity each, while the Netherlands has pledged to install 1GW a year between 2023 and 2030; already, the Borselle III and IV and Hollandse Kust Zuid I, II, III & IV windfarms are scheduled for connection by 2022.
The UK’s next Contract for Difference Auction also takes place in 2019, with £557m in funding set aside for “less established” renewables, including offshore wind. Despite numerous national pledges, the European Union will likely have to re-establish renewable energy targets to spur on growth in the sector.