Thread by @Sustainable2050

Reading the EU offshore renewable energy strategy, published last Thursday: eur-lex.europa.eu/legal-content/…
Thread.

The EC’s impact assessment for its proposed 55% emission reduction target for 2030 projecte that by then, over 80% of Europe’s electricity should be generated by renewable sources.

The strategy sets an aim of 60 GW of EU offshore wind by 2030, up from 12 GW now. In my count, that 60 GW was already largely covered by national targets of member states. I’d say it’s on the conservative side.

Current plans for 2030 offshore wind capacity by Germany (20 GW), the Netherlands (11.5 GW), and Denmark (8.5 GW) already cover 2/3 of the 60 GW EU target. And then there’s Belgium, France, Poland.

That 60 GW would probably produce around 250 TWh, around 8% of the EU electricity demand by 2030. But that’s my own guesstimate; I don’t see a number in the EU strategy at first sight.

The strategy also covers other “Ocean Energy”, but its 2030 contribution is seen as negligible (1 GW), so I won’t discuss that in this thread.
[It’s probably the reason this is called an offshore renewable energy strategy rather than an offshore wind energy strategy though]

For 2050, the EC strategy views another jump to 300 GW of offshore wind. In our 2017 “Translate COP21” report for the North Sea Wind Power Hub consortium (northseawindpowerhub.eu/wp-content/upl…), we showed that around 180 GW in the North Sea and 50 GW in the other northern seas would be needed.

So taking into account the potential in the EU’s southern seas (we recently estimated the potential in the Mediterranean, more about that later), that’s a pretty good match. Even the 300 GW, strange as it may sound, may be on the conservative side.

NB: By 2050, EU electricity demand will be much higher than today, due to electrification and the production of green hydrogen. Depending on how much of the latter we’d like to import from outside the EU, e.g. North Africa, total electricity demand could grow by a factor of 2-3.

The strategy aims for the EU to retain its leading position in the development of offshore wind, and emphasizes the major benefits in terms of jobs and growth, and its contribution to the post Covid-19 recovery.

From the member states’ National Energy and Climate Plans (often not overly ambitious), the Commission concludes that current policies would only lead to around 90 GW by 2050. Mostly because there are few policies going beyond 2030, in my opinion.

But e.g. Germany has already announced a 40 GW target for 2040 (doubling its 20 GW by 2030), and in the Netherlands the post-2030 buildout plans are starting to be discussed as well.

“To change gear, EU and member states need a long-term framework for business and investors that promotes a sound coexistence between offshore installations and other uses of the sea, contributes to the environment and biodiversity, and allows for thriving fishing communities.”

Couldn’t agree more. See e.g. our 2018 whitepaper “Marine Biodiversity and the Development of a North Sea Offshore Powerhouse”: guidehouse.com/-/media/www/si…

“The EU is a global leader in offshore renewable energy. Its offshore wind industry benefits from a first-mover advantage in bottom-fixed wind turbines with a strong home market: 93% of the installed capacity in 2019 was produced in Europe.”

“The EU27 offshore wind market represents 42% (12 GW) of the global installed capacity, followed by the UK (9.7 GW) and China (6.8 GW). European companies are key operators globally, although they face increasing competition from Asian companies.“

“EU industries are also strong in the emerging technology of floating offshore wind. By 2024, 150 MW of floating turbines are expected to be commissioned. A higher level of ambition and clarity is needed to reach the scale to yield cost reductions.”

For floating offshore wind, the EC says a cost (LCOE) below 100 €/MWh can be reached by 2030 if large capacity is deployed. That, however, would still be well above the current cost for fixed offshore wind, given here as 45-79 €/MWh in 2019.

Floating turbines are needed to unleash the offshore wind potential in water depths above ~40 meters. Although the North Sea has large areas that are less deep, this would of course mean an enormous increase in potential, both for the EU and globally.

“Today, 62 000 people work in the EU offshore wind industry, and the sector is outperforming the conventional energy sector in terms of value added, labour productivity and employment growth. It is a true European success story, based on industrial activity spread across the EU.”

Manufacturing facilities of onshore and offshore wind energy components in Europe (JRC, July 2020)

“The North Seas Energy Cooperation (NSEC) provides the most advanced example of regional cooperation. It’s a reference point for other member states willing to tap the full potential of offshore renewable energy. Such cooperation is now being extended to all sea basins.”

In NSEC, Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway and Sweden work together on enabling the further roll-out of offshore wind in the North Seas (North Sea, Irish Sea, Baltic Sea).
More on NSEC here: ec.europa.eu/energy/topics/…

The EU strategy discusses offshore wind in 5 sea basins:
- the North Sea: high potential and currently world’s leading region for deployed capacity and expertise in offshore wind.
- the Baltic Sea: 93 GW of potential, according to a study under BEMIP, ..

- the EU’s Atlantic ocean: high potential, strong pipeline of demonstration projects, regional cooperation France, Spain, Portugal.
- the Mediterranean: 32-75 GW of potential (mostly floating), according to a recent study by my @GuidehouseESI colleagues: data.europa.eu/doi10.2833/742…

- the Black Sea: offers a good natural potential for offshore wind (bottom-fixed and floating).

And now to the key actions to get (at least) 300 GW of EU offshore wind installed in the EU within three decades, a factor of 25 over its current 12 GW. The EC identifies six fields in which coordinated action is necessary:

1. Maritime spatial planning
2. A new approach to offshore wind and grid infrastructure
3. A clearer EU regulatory framework for offshore renewables

4. Mobilizing private-sector investment; the role of EU funds
5. Focusing research and innovation on supporting offshore projects
6. A stronger supply and value chain across Europe.

1. Maritime spatial planning is of course important. There’s a trade-off between the area needed per GW of offshore wind and the energy it produces. Wake effects cause a reduction in output when the turbines are closer to each other.

At the 5-6 MW/km² we now see in the Dutch Borssele offshore wind farms (1.5 GW), the 300 GW would require 50,000-60,000 km² of sea space. That of course allows for multiple use of the area; at this density, the turbines are at least 1 kilometer apart.

For comparison: that’s about the size of the North Sea EEZ (Exclusive Economic Zone) of the Netherlands: 57,000 km2.
Most of the North Sea belongs to the EEZs of the UK and Norway (so non-EU).

“A chief challenge is integrating offshore wind development objectives when developing national maritime spatial plans (to be submitted by 31 March 2021). This would signal to business and investors the govts’ intentions, helping both the private and public sector to plan ahead.”

“Robust maritime spatial planning can also result in the proper protection of vulnerable marine ecosystems. The EU’s biodiversity strategy calls for the expansion and the effective management of the EU’s network of protected areas.”

What I miss here is the drive to *improve* biodiversity in offshore wind areas. We think it’s possible in the North Sea, and first (anecdotal) experience seems to confirm that. But it requires a targeted approach. guidehouse.com/-/media/www/si…

“To ensure the success of large-scale offshore wind planning & deployment, it’ll be necessary to boost regional cooperation. The Maritime Spatial Planning and Marine Strategy Framework directives already require member states to work together across borders, at sea-basin level.”

The grid companies in the @NSWindPowerHub consortium, which we support in various ways, have concluded that the effective integration of 180 GW of North Sea wind power in the NW European energy system requires an internationally coordinated roll-out. northseawindpowerhub.eu

What we’re building in the North Sea is world’s largest power plant, dwarfing China’s Three Gorges dam (23 GW). Far offshore wind farms can be connected to hubs, with electricity connections to multiple countries. Those connections can also serve as interconnectors.

Such a coordinated approach, perhaps in future involving green hydrogen production too, has many benefits. And it of course requires international coordination in marine spatial planning to begin with.

Back to the strategy now. “The Commission will further analyse the interactions between offshore renewables and other activities at sea, such as fisheries, aquaculture, shipping, and tourism and strongly encourages this dialogue with the communities that are most concerned.”

“To facilitate dialogue on the environmental, economic and social sustainablility of offshore renewable energy, the Commission is ready to facilitate and promote a ‘community of practice’ ..

.. where all stakeholders, industry, social partners, NGOs and scientists can exchange views, share experience, and work on joint projects.”

Key actions to be taken by the EC in the field of maritime spatial planning:

Action area 2: “A new approach to offshore renewable energy and grid infrastructure”.

“To step up offshore wind development in a cost efficient and sustainable way, a more rational grid planning and the development of a meshed grid is key.”

“The concept of ‘hybrid projects’ has been given considerable attention over the last years. This can include energy islands and hubs. In the example below, offshore wind production is directly connected to a cross-border interconnector.”

“Here the grid has a dual functionality combining electricity interconnection between two or more member states, and transportation of offshore renewable energy to its sites of consumption. Such projects can yield significant savings in terms of costs and space.”

“To achieve a significant scale-up of offshore wind, the development and planning for an offshore grid needs to go beyond national borders, cover the whole sea basin, and increasingly consider multi-functionality, in hybrid projects or (later) a more meshed grid.”

“As a first step, member states need to set ambitious targets for each sea basin together, taking into account environmental protection, socio-economic impacts and maritime spatial planning. This can translate into a memorandum of understanding or an intergovernmental agreement.”

“These commitments should be reflected in the updated National Energy and Climate Plans in 2023-2024. The next step would be to take those into account in an integrated regional grid planning and development. Offshore hydrogen production and pipelines are an option to consider.”

“Grid development has longer lead times (10 years or more) than offshore power generation, highlighting the need for forward-looking grid investment. The commitments of the member states will reduce the TSOs’ risk of developing stranded assets offshore.”

“In the short term, it appears necessary to set up more structured cooperation between member states, TSOs, and regulators to formulate integrated optimised regional offshore grid planning.”

“Later, this could become a task with a stronger role carried out by regional coordination centres, which will enter into operation in 2022. In the long term, structural cooperation could be enhanced by establishing regional offshore independent system operators of meshed grids.”

[Note: I often shorten sentences a bit. For the actual text, I refer to the link at the top of the thread. Also I sometimes replace offshore renewable energy by offshore wind, since that’s 98% of the show in 2030, and still almost 90% by 2050.]

“More clarity is needed on the distribution of costs and benefits, both amongst the member states concerned, and between the generation assets and the transmission projects. There is a need for a robust methodology for allocating costs to where the benefits accrue.”

“To prepare for more offshore energy and more innovative and forward-looking grid solutions, including hydrogen infrastructure, the regulatory framework should enable anticipatory investments, e.g. to develop offshore grids with a larger capacity than initially needed.”

Key actions to be taken by the EC in the field of the new approach to offshore renewable energy and grid infrastructure:

Action area 3: A clearer EU regulatory framework for offshore renewable energy

“A well regulated energy market should provide the right investment signals. But more complex, cross-border offshore renewable projects are expected to become increasing important, and ..

.. innovative projects, such as energy islands or hybrid projects and offshore hydrogen production face specific challenges. The current regulatory framework was not developed with such projects in mind. Clarification of the electricity market rules is therefore needed.”

“Such clarification is provided in the Staff Working Document accompanying this strategy”. You can find it here: eur-lex.europa.eu/legal-content/…

[If, in the middle of all this important but lengthy strategy talk, you long for some inspiration by the real thing, I recommend browsing my end-of-August thread, on an exciting boat trip to @Orsted 750 MW Borssele 1-2 offshore wind farm, being completed in the Netherlands:]

https://twitter.com/sustainable2050/status/1300352199453794306

“Based on consultations and studies, establishing an offshore bidding zone for a hybrid project can be compatible with electricity market rules, and a well suited option for a large-scale integration of offshore renewables, as it ensures electricity flow to where it is needed,

.. reduces the need for costly after-market corrective action by TSOs (‘redispatch’, I think) and provides strong price signals to encourage offshore wind demand such as green hydrogen from electrolysis.”

“In some cases, an offshore bidding zone could lead to significantly lower income for the offshore wind farms, while congestion in the grids drives up the income for TSOs. This redistribution effect needs to be addressed to allow the total value of the project to be captured.”

“For now, any incentive or support scheme should take the redistribution effect into account ensuring that there is no delay to the rollout of hybrid projects.”

“Furthermore, a common approach to grid connection requirements for high-voltage direct current (HVDC) grids should be developed, based on experience in the North Sea basin.”

Regarding support schemes, “a combination of an efficient market framework, and some form of revenue stabilisation system (de-risking, guarantees and power purchase agreements) may be required for the envisaged upscale of mature offshore wind technologies.”

“In addition, dedicated support will continue to be needed for emerging offshore renewable technologies, such as tidal, wave, and floating offshore wind and solar, to move from the pilot and demonstration phase.”

“The range of cooperation mechanisms under the Renewable Energy Directive (RED II) is promising to achieve a higher share of cross-border projects in the form of joint and hybrid projects.“

“Clear guidance on proper cost-benefit sharing between stakeholders is key to ensure that the member states involved draw a net benefit from acting jointly.”

Key actions to be taken by the EC in the area of “a clearer EU regulatory framework for offshore renewable energy”:

[I still plan to summarize the remaining three action areas, but first a correction, to the 2nd tweet in this thread. The EU share of renewable electricity by 2030 is 64-67%, according to the Impact Assessment for a 55% emission reduction scenario. Not 80% as a footnote said.]