Europe falls short despite Covid resilience

Europe will fail to meet its 2030 emissions reduction target because too little wind capacity is being built.

That was the finding of WindEurope’s 2020 statistics last week even though, on the face of it, European wind developers and investors had a good year.

On Thursday, the trade body published research on total wind installations in Europe in 2020. It reported 14.7GW of wind farms were completed in Europe, of which 80% (11.8GW) was onshore and the rest (2.9GW) was offshore.

This was the continent’s third best year for installations after 2017 (17.1GW) and 2019 (15.6GW), and a 5.8% drop annually since 2019 could be attributed to delays caused by Covid-19.

But this is far short of the level the continent needs if the European Union is to hit its target of cutting carbon emissions 55% by 2030. WindEurope said the EU will only see 15GW of new wind capacity in its member states each year in the next five years, but needs almost double that to hit its 2030 target: 27GW a year. This should serve as a stark warning for businesses and politicians alike.

Why does this matter?

The first thing to say is that 14.7GW is nothing to be sniffed at. It is testament to wind developers and investors in Europe that they delivered those projects in the face of disruption scarcely imaginable at the start of 2020.

We will celebrate wind's leaders in our European Power List next week.

But that 27GW figure shows just how far policymakers in Europe are falling short. On one hand, the EU has set ambitious goals for wind developers and investors. But, on the other, it is failing to remove the regulatory roadblocks that are stifling investment.

The main hurdle is permitting rules, which WindEurope called “too complex”, and because applications are being handled by bodies that are under-staffed. This increases the time taken to award permits; increases the risk of decisions ending in court; and reduces the appetite from investors to take the risk.

This is also forcing European utilities, developers and investors to pursue projects in other parts of the world. The US wind industry may have been itself in a storm – both actual and political – over the last two weeks, but it doesn’t change the fact that more wind capacity was completed in the US in 2020 (16.9GW) than the whole of Europe. This boom vindicates the decisions of European utilities that have betted big on the US market.

Meanwhile, China added a reported 45.4GW of capacity in 2020, which is more than the US and Europe combined. Of this, 3GW was offshore, with China adding as much as the rest of the world combined.

This strong growth in the US and China contributes to a perception of Europe slipping behind. This is bad for developers and investors.

De-carbonisation delays

Slow growth is putting European de-carbonisation efforts at risk too.

Major industrial players in Europe are looking to wind power to help them de-carbonise their operations, including steel and chemicals companies. They want wind to help to electrify their processes and produce green hydrogen.

But they say a shortage of affordable renewable energy will derail these plans.

Marco Mensink, director general at European chemicals industry body CEFIC sees a “problem in the future supply [of wind power] as not enough capacity is added”; and Axel Eggert, director general at steel association Eurofer, said the EU must “significantly” speed up the installation of wind capacity in Europe.

The EU made a big show about supporting the ‘green recovery’ in 2020, but it needs to now back that up with action. Wind investors are waiting.