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View from Brussels: Wind power plays

Image credit: European Commission

The EU has unveiled plans to increase offshore wind power capacity from just 12 gigawatts today to a massive 300GW by 2050, as part of the bloc’s goal of being carbon-neutral by 2050, but there are plenty of hurdles to overcome before the renewables boom can take hold.

With its offshore power strategy, published on 19 November 2020, the European Commission – EU’s executive branch – aims to tap the power of renewable energy in its ambitious quest to reduce greenhouse gas emissions substantially.

In addition to building scores of new wind farms, the Commission wants power providers to use more tidal and ocean energy. The plan calls for at least 40GW by mid-century, which would be a huge increase on the current capacity.

It is not a cheap strategy. An estimated €800 billion will be needed to hit those targets, the majority of which will need to be spent on upgrading electricity grids and linking wind farms to those same grids.

The Commission insists most of the cash will have to be sourced from private investments, but there is funding available for countries that want to replace fossil-fuel energy generation with cleaner options.

“Europe is a world leader in offshore renewable energy and can become a powerhouse for its global development,” said European energy commissioner Kadri Simson. For ocean and tidal, scaling up will be crucial to bring down costs.

Different countries have varying attitudes towards wind energy, and different capacities to deliver on offshore wind. EU members with North Sea and Baltic coastlines are well placed to deliver because of how shallow those seas are.

Mediterranean states are in a more difficult position because of how deep the sea is, and costs linked to wind power technology that can be operated in deeper waters, such as floating turbines.

France is somewhat of an outlier, as it has plenty of marine space to build wind farms. However, local opposition and a government that is more than willing to rely on its vast nuclear fleet means that not a single marine turbine has been erected.

Landlocked countries like Austria, the Czech Republic and Luxembourg will not directly contribute to the offshore goal for obvious reasons but could end up paying fees to other countries to count renewable energy they generate on their energy books.

This practice, known as ‘statistical transfers’ in EU law, allows clean-energy laggards to avoid heavy fines by buying up surplus amounts from other countries so that they can meet their targets.

Yet the sheer scale of the Commission’s plans means there might yet be problems linked to trade and environmental policies.

Wind turbines and towers need a lot of steel and the industry is concerned that Europe’s market is not in the right shape to cope with increase in demand, and could fall prey to cheaper foreign imports if not regulated correctly.

In October, the EU launched an anti-dumping inquiry into Chinese steel towers, after a complaint was lodged against volume and price of imports. Investigations normally last at least a year and tariffs can be imposed for five years after that.

“The pressure by imports from China left EU producers no choice but to also drop their prices so as not to have plants idle and try to stay competitive. As a result, pressure by dumped imports led to price suppression, which drove the industry into losses,” the complaint reads.

Another option the EU has in its fight to preserve domestic industries and meet its green goals is a planned tax on energy-intensive imports, which could target steel.

The so-called carbon border tax would impose a charge on certain products the EU says are manufactured in an unsustainable way, which is supposed to stop European industries relocating offshore to avoid climate regulations.

Part of the reason countries like China and India can offer cheaper products is that they are produced using fossil-fuel energy such as coal power, which can often be less expensive than renewables.

“It’s important that all steel imports have a similar carbon cost constraint that European producers have,” said Axel Eggert, secretary-general of trade body Eurofer.

Brexit will also have an impact on the wind industry.

According to WindEurope, UK wind farms rely on European engineers for maintenance and upgrades. Depending on the outcome of ongoing talks, a lack of free movement for specialised workers could hurt that collaboration.

The UK has its own big plans for wind. In October, Prime Minister Boris Johnson’s government increased a 2030 wind power target from 30GW to 40GW, pledging that every home in the country could be powered by wind by the end of the decade.

Another issue the EU will have to negotiate is the balance that green political parties and groups want to strike between power generation and preserving biodiversity.

Although green politicians welcomed the Commission’s plan, some criticised it for not being ambitious enough in its target, but also for not giving enough attention to spatial planning and public consultations.

Irish MEP Grace O’Sullivan said that “unfortunately, the strategy does not mention the precautionary principle,” and that “offshore renewables must not come at the expense of marine ecosystems and biodiversity.”

When done correctly, wind farms can improve biodiversity and even create indirect jobs. Off the Dutch coast, local fishermen have been granted access to wind farms and oyster reefs have even been seeded.

 

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