On May 18 this year Denmark, Germany, Belgium, the Netherlands signed a pledge to jointly build at least 150 gigawatts (GW) of offshore wind capacity in the North Sea by 2050, marking a 10 fold increase. Signed at an offshore wind summit in Denmark, attendees at the summit included German Chancellor Olaf Scholz, who stated, “This is not just a declaration, but the toolbox for what we have to do and will do in the coming period.” Also present at the summit was the European Commission’s President Ursula von der Leyen. According to Robert Habeck, Germany’s Vice Chancellor and the Economy Minister, the move is expected to allow the four European countries to cooperate on all fronts of project development, ranging from construction to finance and distribution.
Additional capacity for hydrogen manufacturing
Aimed at marking a tenfold increase in the bloc’s current offshore wind capacity, the wind turbines will be set up on the coastlines of the four countries. While 150 GW would suffice for powering 230 million European homes, the ambition of the four countries is to try and reach 300 GW by 2050. The additional capacity is meant to be utilised for manufacturing hydrogen and other green fuels, which would power heavy industries and transportation, according to Danish business minister Simon Kollerup.
The task ahead will prove to be quite challenging for the European Commission, the executive branch of the European Union. For one, there is a long way to go: existing wind at sea capacity in the bloc amounts to roughly 16 GW. Meanwhile, the wind supply chain in Europe has been beset by fierce competition and lack of profitability, with several key players reporting heavy losses in the last financial quarter. In addition, red tape and long permit waiting times have impeded the rate of wind farm build- outs. The good news, however, is that high demands for wind energy could help mitigate these losses in the long run.
A public private partnership
Denmark’s Climate and Energy Minister Dan Jorgensen estimated that installing 150 GW of offshore wind power would cost hundreds of billions of dollars. Private investors, with the aid of small state subsidies, are expected to finance these ambitious projects. The declaration for dramatically increasing offshore wind capacity comes alongside the European Commission’s 210 billion euro REPowerEU plan, which will pave the way for an accelerated transition away from Russian energy imports to European green fuels. “The answer, my friend, is literally blowing in the wind” said Jorgensen at the port of Esbjerg, used by top turbine makers Siemens Gamesa (SGREN.MC) and Vestas (VWS.CO).