The Energy Ministers of the nine North Sea countries held their annual meeting on Friday in Odense, Denmark, reaffirming their ambition to transform the North Seas into Europe’s “green power plant.”
The North Seas Energy Cooperation is the intergovernmental forum supporting and facilitating the development of offshore grid and renewables development in the North Seas, including the Irish and Celtic Seas. It is made up by Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway, Sweden and the European Commission. The UK had to leave the North Sea Energy Cooperation in 2020 as a result of Brexit.
The ministers gave clear recommendations to the new EU Commission how best to further strengthen Europe’s wind energy supply chain. They also highlighted the need to get hybrid offshore wind farms which connect to two or more countries, energy islands and meshed grids underway by defining a cost-sharing formula and creating a new dedicated offshore financing facility. They also highlighted the importance of involving the UK.
In a joint declaration, the Energy Ministers said Europe needs to rethink its approach to offshore wind planning, they said. With the large offshore wind volumes to be installed in the North Seas over the next years, national supply chain planning will not suffice. Investments in new and expanded factories require international cooperation and coordination at sea-basin level. A strong European supply chain is a prerequisite for the further build-out of offshore wind.
The recommendations call for a “digital transparency tool” that provides visibility for the entire wind energy value chain. The tool should serve as an overview of auction schedules, manufacturing capacities, equipment requirements and port capacities across the North Seas countries. Ultimately, it is envisaged to cover all of Europe, including the UK and Norway.
Supply chain bottlenecks remain, especially with regards to the availability of offshore wind installation and service vessels, port infrastructure, the expansion and reinforcement of onshore grid connections and the availability of skilled workers. Despite this, the European offshore wind supply chain is ramping up. By the end of 2025 Europe will be able to manufacture 9.5GW of offshore wind turbines a year.
European companies are investing at least €10 billion to build new factories and expand existing ones – for everything from wind turbines to foundations, cables and grid equipment. Europe must continue to facilitate access to capital, enable a level playing field with non-European competitors, boost the grid buildout, said the ministers.
With the European Wind Power Package and the EU Grids Action Plan, the European Commission has taken a series of significant steps to back investments in the wind industry and its supporting infrastructure. The European Investment Bank (EIB) is supporting Europe’s wind industry with counter-guarantees, but additional steps at regional level are needed to facilitate investments.
The recommendations call for a new approach to offshore financing. Preliminary discussions on establishing an “offshore regional facility” to unlock financing at sea-basin level have started. The facility could support funding of meshed grid infrastructure and hybrid offshore projects and help overcome persisting questions on cost, risk and benefit sharing between the actors involved.
The facility would be based on voluntary cooperation between the European Commission, Member States, private investors and possibly non-EU countries which could support offshore projects.
Industry group WindEurope welcomes the proposed offshore regional facility. “Well done to the North Seas Energy Ministers for identifying exactly what needs to happen to increase momentum on offshore wind and for spelling out clearly what the EU needs to do to on this over its new five-year mandate,” said WindEurope CEO Giles Dickson.