Major European projects such as the Vattenfall development off the Norfolk coast stalled due to rising costs – Vattenfall
Europe has lost its crown as the top builder of offshore wind power to China as UK developers grapple with high costs and stagnant electricity prices.
According to the Global Wind Energy Council (GWEC), the global offshore wind market last year totaled 64.3 GW of electricity, with China accounting for about 49 percent, compared to Europe’s 47 percent share.
The report notes that large manufacturers in the wind sector “have suffered from a lack of profitability over the past few years, leading to layoffs and selective withdrawal from smaller or slower-growing markets.”
In its annual Global Offshore Wind Report, GWEC said supply chain disruptions could occur in every region of the world except China by the mid-2020s.
Rebecca Williams, global offshore wind head at GWEC, said: “Urgent investment and global co-operation will be needed to overcome these barriers.”
The installation rate in Europe last year was the lowest since 2016. Europe’s total offshore wind capacity reached 30 GW last year, of which 46 per cent was from the UK.
While the UK still dominates European wind power at sea, Britain’s ambitions to become an exporter of clean wind power are at risk of being eroded as the rest of Europe rises.
An increase in supply chain costs has increased the price of wind turbines, while a rise in global interest rates has significantly increased refinancing costs.
In July, Swedish energy giant Vattenfall halted development of a major 1.4 gigawatt wind farm off the coast of Norfolk after rising inflation made the project unviable.
Wind farms in the UK are largely governed by contracts for difference (CFDs), which are 15-year subsidy agreements between the government and electricity generation companies, designed to guarantee steady revenue to energy schemes.
UK is in the middle of another round of bidding for the contracts. In the current allocation round, which ends next month, offshore wind is competing with solar and onshore wind, which are cheaper to build.
Boris Johnson aimed to turn Britain into the “Saudi Arabia of wind” in 2020 when he was prime minister, and the UK aims to build 50GW of offshore wind power by 2030 from current levels of around 14GW.
However, the GWEC report showed that the UK’s share of new offshore wind projects is forecast to fall from almost a half today to almost a fifth in a decade as Germany, Denmark, the Netherlands and France build wind farms of their own. Are.
The lobby group warned that investors seeking to meet their environmental goals need wind farm projects with permits and anticipated income from interested customers.
Ms Williams said: “Offshore wind projects have been delayed or stalled indefinitely because of inadequate and inefficient permitting and licensing rules. These factors have created uncertainty and forced developers to review the viability of their projects, in some cases even to stop development.
“Such ineffective policies focused on low-cost competition and where combined with impractical and unattainable local material conditions, will increase project costs and slow the pace of offshore wind deployment needed for the world to meet net zero “
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