Brexit would alter Europe’s leadership in the offshore wind market

The United Kingdom represents 35% of the installed capacity in the world. China has surpassed Europe in capacity deployed in 2018, according to the 2018 Offshore Wind Energy Technology Market Report

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Offshore wind energy will accelerate its worldwide deployment over the next ten years, driven by the growth of demand in China, Europe and the United States; by the improvement of available technology and by a reduction in the price of Administrative auctions. They verify, one after another, all the official reports. The European Commission did it in its yearly Report on the Blue Economy, released in June in Lisbon. This is confirmed by the United States Department of Energy and the National Renewable Energy Laboratory in the 2018 Offshore Wind Technologies Market Report, with data updated until March 31, 2019, which has been released on 19 August 2019. According to these two agencies, the wind power installed at sea will go from the 22.5 gigawatts (GW) currently deployed in the world, to a capacity of between 154 and 193 GW in 2030, and about 500 GW, in 2050.

In 2018, the record for new offshore facilities was broken, with a total capacity of 5,562 megawatts (MW), 50% more than in 2017. Half was deployed in China; the United Kingdom activated another 2,120 MW; Germany, 835 MW; Denmark, 28 MW, and the rest of the world, 17 MW. The report records the first offshore installation in Spain, the Elisa turbine, built by Esteyco and Siemens Gamesa, among other partners, which connected to the grid at the Plocan test area on the coast of Gran Canaria, in the Canary Islands, and it is fully operational since March 2019, with a capacity of 5 MW. The project was selected in 2015 by the European Union Horizon 2020 R&D Program.

Wind power at sea will reach 193 GW in 2030, and 500 GW in 2050, according to the Offshore Wind Energy Market Report published by the US Federal Energy Department

The US Department of Energy and the National Renewable Energy Laboratory also include in its report two other prototypes of floating facilities in waters over 60 meters deep, which Plocan is developing for activation in 2021. One of them, with a 8 MW capacity turbine, is a hybrid system that will take advantage of wind and wave energy.

In the world, there were 176 offshore facilities at sea at the end of 2018, with a total deployed capacity of 22,592 MW. The projection for 2019 of the US Department of Energy and the National Renewable Energy Laboratory of the United States is that the new deployments will exceed the 2018 record, when new facilities were activated at sea with a power of 5,652 MW. Apart from the capacity already deployed, there are projects in different previous phases (from the acquisition of permits to construction). The pipeline of projects in different phases of development and facilities already operating in the world totaled 272,000 MW of power, according to data updated as of December 31, 2018.

Why the offshore wind market grows

Several forces are accelerating the growth of the offshore wind market on the planet. The Report of the US Department of Energy and the National Renewable Energy Laboratory indicates the reduction in the price of administrative license auctions, from $200 per MW to an average of between $74 and $79 per MW, as one of the key factors of the industry growth.

The demand for offshore wind power in Asia –particularly in China, Vietnam, Japan and South Korea– and in the United States, where there are projects authorized to deploy 25,824 MW, and laws such as the one approved in California in 2018 provide for 100% Clean energy by 2045, is another engine of growth in the industry, according to the report of the two US agencies. China will boost global demand in the next ten years: of the total power expected to be deployed in the sea by 2030, more than 40% will be in China, another 50%, in Europe, and the remaining 10% will be distributed between the United States and Asian countries other than China.

In 2018, the record for new offshore facilities was broken, and everything indicates that it will be beaten again in 2019, according to the United States Government

The Asian region «may soon surpass Europe in terms of adding new power» offshore wind power, due to the Chinese demand for renewable energy and the regional motivation to make progress in the manufacturing of the components.

The European leadership in the offshore wind energy market rests on several behaviors, according to the report of the Department of Energy and the National Renewable Energy Laboratory. Public tenders have «clear and transparent rules»; equipment manufacturers and installers are based in Europe; The region has a mature supply and logistics chain; It has strong R&D networks and also has a 28-year advantage in the deployment of offshore wind power.

The European offshore represents about 80% of the installed capacity in the world. The aggregation of the European bloc hides, however, the fact that it is the United Kingdom that really leads the deployment of this technology. It is the economy with the most installed capacity at sea: 44% of offshore wind power across the EU, followed by Germany (34%), Denmark (7%), Belgium (6.4%) and Netherlands (6% ). Brexit would alter the EU leadership in this field and would have a direct impact on the research, development and the suplly chain for regions producing blue innovation, such as the outermost regions.

Technological change is also contributing decisively to reduce costs. On the immediate horizon, there is the commercialization of 10 and 12 MW turbines, compared to those of 5-8 MW that are currently operating. Siemens Gamesa announced in January 2019 a 10 MW turbine that will be on the market in 2022, and General Electric is developing another 12 MW model to market it in 2021. US agencies expect the deployment of new turbines up to 15 MW before of 2030.

Research on higher capacity turbines aims to reduce the cost per kilowatt, but also delays the maturity of the offshore wind power industry, which is still at an early stage of its development, experts warn.

“Although larger turbines improve long-term project costs, it can also delay the maturity of the industry. It may take some years for component and infrastructure manufacturers to stabilize larger turbines at sea. This problem of scale will persist, ”says the report of the US Department of Energy and the National Renewable Energy Laboratory.

European offshore wind energy projects installed and connected in 2018

The next generation of offshore facilities will be floating

Deployment of deepwater floating facilities will accelerate market growth, according to the report on the situation of offshore wind energy. In the United States, more than 58% of the optimal sea surface for wind energy is in waters more than 60 meters deep. In Europe, the optimal area is, in 80% of cases, deep water. At the end of 2018, there were 8 floating facilities operating in the world, all in the testing phase, with a total capacity of 46 MW. Five tests, with a total capacity of 37 MW, are being carried out in Europe, and three others (9 MW), in Asia. There are another 14 approved projects, with an expected capacity of 200 MW. Spain will provide two prototypes developed by Plocan in the outermost region of the Canary Islands, whose tests will begin in 2021. No floating technology project will reach the market before 2025, according to the forecast of the two US agencies. Its report indicates that, with the data updated as of December 31, 2018, the wind energy deployed in floating facilities will reach 4,888 MW in 2027.

Sources consulted for this article:

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