The new German Renewable Energy Sources Act (EEG) means troubled waters for the German offshore wind industry, according to a press release jointly issued by AGOW (Arbeitsgemeinschaft Offshore-Windenergie), Stiftung OFFSHORE-WINDENERGIE, VDMA Power Systems, BWE (Bundesverband WindEnergie) and WAB.
The number of new offshore wind installations in Germany was relatively moderate in the first half of the year, with a total capacity of 258MW going on line with the industry anticipating that in the course of the year new offshore wind turbines will feed a further 700MW into the grid in Germany. This means that by the end of the year there will be a total output of almost 4GW on grid in the German North and Baltic Seas. The average capacity of each turbine connected to the grid has risen from 4 to 6MW.
The industry organisations and associations that commissioned Deutsche WindGuard to compile the figures consider the expansion in 2016 to be a moderate contribution to a steady development. A consistent and substantial level of offshore wind energy expansion remains the top priority, also if cost reduction is to be achieved through economies of scale. Dutch tenders have shown what possibilities there are for reducing costs, even if the conditions there are not exactly the same as in Germany. Where the final decision to invest in new projects is to be taken in 2020, the goal is to achieve a price of 10 cents per kilowatt hour for a period of 20 years, excluding the cost of grid connection. Results have shown that the greater the volume the more significant the reduction in costs. On the other hand, the annual expansion numbers defined in the EEG 2017 are well below what is possible, according to the organisations.
The numbers foreseen for 2021 and 2022 in Germany of 500MW per annum are much lower than the annual expansion in capacity of 700MW in the smaller Netherlands. The expansion volume capped in the EEG 2017 for the early 2020s is thus – also in the light of the constantly increasing sizes of turbines and wind farms – simply nonsensical and expensive, the industry organisations said. It is obvious that if the market shrinks by a third it will not be possible to keep all the approximately 20,000 jobs with manufacturers, suppliers and service providers for the offshore wind industry. And with Brexit, the largest export market seems considerably less secure.
For the offshore wind industry one thing is certain – if sluggish grid expansion continues to retard the expansion of offshore wind energy and other renewable energy sources, the shift to renewable energy usage will fail. The culpably neglected expansion of transmission grids on land to date must be accelerated instead of providing grounds for curbing offshore wind energy expansion. Evidence shows that there is considerable acceleration and cost reduction potential for offshore HVDC grid connection (high voltage direct current transmission). Processes and technical innovations that enable better grid utilisation should be employed for the short-term bridging of grid bottlenecks on land. In this context, the offshore organisations and associations refer to the industry report “Acceleration and Cost Reduction Potentials for HVDC Offshore Grid Connection Projects” published in June of this year.
With regard to the last-minute amendments made without sufficient discussion during the legislative process, the organisations and associations demand that corrections be made relating to the tendering terms for 2021 and 2022. The key-date regulation for the eligible projects in the transitional system for tendering should be postponed until the end of 2016 in order to guarantee sufficient competition. According to the current EEG amendment, the projects must have received planning permission, outline approval or consideration by 1 August of this year if they are to be allowed to participate in tenders in 2017 and 2018.