A European Green Deal

How offshore wind can help
decarbonise Europe

Table of Contents
  1. Foreword
  2. Introduction and summary
  3. A green deal approach to offshore wind buildout
  4. Finding the space
  5. Transporting the offshore wind energy to Europeans
  6. Enabling the industry to scale
  7. Conclusion
  8. Get in touch with the authors
  9. About Ørsted

A ‘Green Deal’- approach to offshore wind buildout


The current approach to offshore wind buildout has worked well so far. Offshore wind energy has been developed through individual countries’ energy policies and marine spatial planning (MSP). It has helped mature the technology, brought down costs and created a strong European industry with a global footprint. But this approach to develop offshore wind in Europe will not be sufficient to establish 450GW of offshore wind generation by 2050. The need for a significant increase in offshore wind buildout requires a new ‘Green Deal approach’ to the development of offshore wind.

With today’s approach, offshore sites are typically chosen as a result of what can be fitted in with existing sea uses. This makes finding space for the required increase of offshore wind capacity challenging in continental Europe. Export cables are generally established as single onshore connections for each project and in most cases, they are built by the Transmission System Operator (TSO). We can reduce costs by including transmission into the competitive tendering, and we can get a higher value from connections, not least through increased security of supply, by connecting wind farms to more countries in a meshed structure. Finally, a new approach to policy formulation and collaboration between national and European policy makers is needed to provide clarity and enable the industry to reach the scale required.

European offshore wind capacity towards 2050

CUSTOM GRAPHS WILL BE INJECTED HERE
Source: Source: Bloomberg New Energy Finance, 2019 and Ørsted calculation

Together, these challenges raise three broad questions about how to ensure the timely buildout of offshore wind towards 2030 and 2050, to help Europe deliver on its green transformation and stay in line with the Paris Agreement. These questions, which are the topic of this paper, are:


1. How do we find the space for 450GW of offshore wind generation?


How do we find the space for an accelerated buildout of offshore wind generation?
European governments are currently working to develop the maritime spatial plans (MSPs) for the future use of Europe’s seas. How can these be designed with a goal of net-zero in mind?

How do we ensure the buildout is aligned with the need for environmental protection?
Offshore wind energy is a key part of combatting climate change, which is one of the most important threats to Europe’s maritime biodiversity. But offshore wind farms themselves also affect local biodiversity. The benefits and impacts of offshore wind energy is a complex field of marine science, with gaps still to fill. We need to work to improve scientific knowledge to understand and manage the longterm consequences of offshore wind energy buildout.

How do we enable co-existence with other maritime activities?
As European waters share space to other economic activities, finding the space for offshore wind buildout means finding a balance between economic activities, while also protecting the environment and abating CO2 emissions through increased offshore wind buildout.

 

2. How do we ensure sufficient capacity for transporting offshore wind energy to Europeans?


How can we ensure an adequate and timely buildout of transmission infrastructure?
New, reformed regulation with more agile approval processes and effective incentives to build transmission can help TSOs undertake the needed transmissions grid enforcements in time.

How do we optimise the value of the offshore transmission grid?
The value of offshore transmission connections to offshore wind farms can be substantially increased by connecting to more markets, eventually creating a meshed grid, based on clusters of wind farms. This will allow for trade between markets, while improving dispatch and security of supply. This vision of an advanced offshore grid with interconnectors doubling as export cables, eventually leading to dedicated energy hubs, should be established through a step-wise approach. This way, governments, TSOs and market actors will be able to gradually develop the organisational capacity the cooperation needed.

How do we allow for competition and synergies to reduce costs?
Offshore grid infrastructure has fallen behind in its cost-out journey compared to offshore wind generation. By allowing offshore wind developers to compete in designing and constructing the offshore grid, synergies between the connection and the wind farm, investments in industrialising the supply chain can be unlocked, and costs can be significantly reduced. This will require updated regulation and new models for remuneration of installation and operation grid assets.

 

3. How do we enable the industry to scale?


What will it take to scale up the industrial supply chain?
To enable significant investment into the industrial supply chain, the industry requires clarity and confidence in a continued pipeline towards and beyond 2030, to unlock the necessary private capital.

How do we make sure the energy demand is shifted towards green electricity and other renewable fuels?
The European green transformation is heavily dependent on consumers in other sectors switching to renewable electricity, either directly through electrification or indirectly through power-to-X technologies. Uncertainty about the pace of the required shift in consumed energy translates into a significant uncertainty regarding investments in renewable electricity and transmission. Therefore, a political push to shift demand to these low-carbon technologies is essential.

What should the governance look like?
Formulating high-level – and eventually multigovern-mental – policies for both the buildout of offshore wind and for the future electrification of the European economy is vital. Both to provide the needed confidence to unlock investments and to facilitate the pragmatic cooperation between governmental entities.

A simple growth path to reaching 450GW by 2050 implies increasing the current capacity roughly six-fold to 130GW by 2030

Answering these three broad questions and sustaining an accelerated buildout of offshore wind energy should be a top priority for governments seeking to deliver a Green Deal for Europe.

It will require a pragmatic and inclusive discussion across sectors and countries to identify the right solutions for Europe. Governments, industry, regulators, TSOs, civil society and environmental NGOs should work together to identify and formulate answers, which can sustain an accelerated buildout of offshore wind energy.

To start the discussion, this paper presents the views from Ørsted on where the answers could be found. This is summarised in the overview below, showing the differences between the existing approach to offshore wind buildout and a potential new Green Deal approach.

Traditional approach


Space

  • Sites designated by governments.
  • Sites often specific to tenders.
  • No or very little tolerance for local environmental impact.
  • Offshore wind energy sometimes last in line after other uses.


Infrastructure

  • One project – one connection to shore and often to the closest suitable point on the transmission grid.
  • Often delegated to TSO.


Industrial development

  • Governments setting national targets.
  • Tenders organised to meet national energy demand.

 

Green Deal approach


Space

  • Larger gross areas or zones designated, where offshore wind is prioritised and in which developers have more freedom to screen and propose new projects.
  • Environmental consent based on latest knowledge and incorporating benefits from climate change impact.


Infrastructure

  • Transmission included in developer scope.
  • Multilinked offshore wind farms enter into a larger transmission system potentially sharing connections in hubs or feeding into several markets at the same time.


Industrial development

  • Governments set stretch targets, based on a Europe-wide view, but the market will also drive offshore expansion through demand.
  • Volumes optimised regionally rather than nationally.

Roadmap towards 2050
– it is a shared responsibility

     Continue to

Finding the space

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