EU falling short on wind investment plans

Are nations in Europe on track to meet wind targets in their National Energy & Climate Plans? And how can politicians unlock more investor support?

Those were two of the questions discussed by some of the sector’s biggest names in a webinar run by WindEurope on 16th October to mark the launch of its latest report, called ‘Wind Energy & Economic Recovery in Europe’.

In this report, it gave an eight-point plan that to unlock the investment needed to reach those targets. Those recommendations for the European Union are:

1. Simplify wind farm permitting rules
2. Be clear on auctions through to 2030
3. Plan for electric vehicles and industry
4. Support investment in electricity grids
5. Plan for 450GW offshore wind by 2050
6. Invest in improving mature technologies
7. Set trade rules to help EU firms globally
8. Aim for 55% greenhouse gas cut by 2030

But it won’t be easy. Pierre Tardieu, chief policy officer at WindEurope, kicked off the webinar by saying the EU is in the tough position of having to tackle an “unprecedented economic crisis” caused by the Covid-19 pandemic, while also fixing the “pre-existing structural challenges” of decarbonising the grid to help address the climate crisis.

He added that supporting growth in wind could help address both challenges – while also helping EU firms to stay strong in the face of global competition.

Yet there is a risk of countries missing their NECP targets and harming wind.

How to unlock investment

Gunnar Groebler, head of wind at Vattenfall and outgoing WindEurope chair, used his presentation to show how the wind industry benefits countries where it operates. He said the sector paid €5bn in taxes each year to European governments, and was particularly supportive in rural areas that may otherwise suffer under-investment.

All too often, discussion about the wind industry focuses on outdated arguments from objectors about how wind is a drain on the public purse. But Groebler said that working with communities was the best way to help unlock investment in wind energy.

“Our experience is that involving the community, engaging local actors and activating the local economy has proven to be central, and will be central going forward, to any success of the energy transition,” he said.

WindEurope said European wind farms pay on average €2.30/MWh in local taxes. Talking about the financial contributions of wind will help build support.

But Philippe Kavafyan, CEO at MHI Vestas and incoming chair of WindEurope, set out figures from the association that showed countries in the EU aren’t on track – which, for the purposes of this research, includes the UK.

The direction of the EU’s new climate policy would see the industry in the EU achieve 397GW total capacity by 2030 supporting 450,000 jobs, up from 192GW and 300,000 now. This would mean that EU countries producing 30% of electricity from wind, while wind energy would contribute €50bn to European GDP – up from €37bn now.

However, it is currently on track to reach 324GW installed capacity by 2030, with jobs in European wind slumping to 282,000 – which is lower than today. This suggests EU wind companies will lose ground to rivals, especially those in Asia, during the next decade unless the EU takes serious steps to do better.

Kavafyan says that Europe “must do better”, and that implementing the EU’s green new deal would “ensure Europe remains the world leader in wind”.

He said that EU trade policies must enable European wind companies to grow globally and compete in non-EU markets as “we are competing against companies benefiting from state-backed financing”.

“Green energy must remain a central pillar of Europe’s economic and climate recovery. At this critical time when the EU needs to agree on a credible trajectory towards climate neutrality, there is no better accelerator for our recovery and our chances to deliver the green deal certainty and stability for investors,” he concluded.

The EU said it wants to push its foot harder on the accelerator for green growth. It has even been given a map of how to get there.

But as any driver knows, a map is only good if there's willingness to follow it.

‍