The industry returns to WindEurope

Trade association WindEurope’s signature conference, hosted in Copenhagen late last month, is surely the highlight of the year for Europe’s wind industry.  

Attending these events is a wonderful way for wind power finance intelligence providers, Tamarindo included, to keep our fingers on the pulse of European industry and to reconnect with individuals and agendas.

Tamarindo members and staff heard presentations from several European leaders, as well as developers and suppliers, noting the critical importance of wind power to national climate targets.

Speaking for the executive of the EU, European Energy Commissioner Kadri Simson highlighted a key agreement that had been reached the day before the conference. 

The Ostend summit saw several additional North Sea countries vowing to grow offshore wind supply chains and incentives, building on goals announced at the Esbjerg summit last year. That summit laid down a target for 65GW of North Sea offshore wind power by 2030 and 150GW by 2050.

The countries have now agreed to build offshore wind – including floating – in the deeper waters of the Irish Sea, the Celtic Sea, and the Atlantic Ocean, thanks to the contribution of seabed from new joiners France, Ireland, Luxembourg, Norway and the UK.

But this time around, the countries admitted that Europe’s supply chain was not ready to reach the 65GW target. They pledged to step up efforts with new designs for auctions that incentivise both developers and suppliers to build over 20GW of offshore wind capacity per year.

While this agreement looks overwhelmingly positive, WindEurope warned that there were obstacles, as “in 2022 not a single offshore wind farm reached final investment decision.” It blamed state interventions such as price caps and clawback measures for having a chilling effect on plans to invest in offshore wind.

Partly, the summit agreement relies on regulations facilitating the growth of market-based PPAs, or sales of offshore wind power to greening corporations.

It also relies on a return to subsidies for offshore wind in the form of two-sided CfDs. This could create both an energy price guarantee and an agreed revenue cap for wind power developers and investors. In today’s market, they are forced to plan projects without clarity on revenues on the one hand and are randomly taxed on their profits on the other, wreaking havoc whenever there is a mismatch between planned revenue and capex.

The background to this announcement – and related ones around new EU-level permitting, network and hydrogen regulations – is the EU’s pursuit of energy independence from Russia given the war in neighbouring Ukraine. 

Also seeking independence, Ukraine used WindEurope’s expo to expand an existing partnership with Denmark to include offshore wind power in the Black Sea. Building offshore wind farms there would mark a first for the country and take place during its reconstruction. The local wind association expects offshore wind capacity could reach 250GW.

“We need to ensure Ukraine's access to wind energy, to freedom energy. When peace is restored, and Ukraine is once again free of the Russian occupation, Denmark will support Ukraine’s reconstruction and expansion of offshore wind power,” said Ukraine’s minister of energy German Galushchenko, speaking via videolink.

He noted 74 per cent of Ukraine’s onshore wind capacity was out of operation amid the war, and 80 per cent of it was in the Russian-occupied territories of Kherson, Zaporizhzhia and Crimea. Ukraine’s current capacity is 1.67GW, excluding wind power in Donbass and Crimea, but its 2032 recovery plan foresees building 5 to 7GW of additional wind and solar.

Not only did the event give the stage over to Ukraine, but it provided opportunities for under-represented voices in all sectors to give their perspectives. We look forward to the next edition.