EU to Accelerate Wind Farm Development and Monitor Foreign Competition
The European Commission is launching a broad initiative to accelerate the development of wind energy projects as it seeks to meet its aggressive targets to convert to renewable energy. Announcing its European Wind Power Action Plan, the European Commission recognized that the industry faces significant challenges and is falling behind the required installations, while they also are fearing increased foreign competition.
According to the European Commission, the action plan will help to maintain a healthy and competitive wind energy supply chain, with a clear and secure pipeline of projects, attracting the necessary financing, and competing on a level playing field globally. The EC will provide direct support focusing on six main areas while also encouraging member states to take specific actions to ease some of the challenges in the industry and support development.
Overall, the EU’s 27 members have approximately 204 GW of installed wind capacity adding a record 16 GW of wind power in 2022. While that was a 47 percent increase from 2021, the commission highlights that they are lagging behind on a goal of having 500 GW of installed capacity by 2030. They note that the EU will need to add 37 GW per year to meet its target, which is required to meet the overall goal of 42.5 to 45 percent renewable energy in 2030.
Offshore wind, while one of the early success stories for Europe, has also slowed its growth. Of the total added in 2022, only 2.5 GW was offshore wind bringing the total to 16.3 GW in the offshore sector. Most of Europe’s offshore wind capacity is in the UK, which continued commissioning in 2022, while in the EU France installed its first large offshore wind farm. The commission highlights that 111 GW of further capacity is committed by member states, but to meet the targets, the EU must install almost 12 GW per year of offshore capacity, which is 10 times more than the 1.2 GW installed in the EU in 2022.
The situation needs immediate action the European Commission concluded. They point to a broad range of issues including insufficient and uncertain demand, slow and complex permitting, and unsupportive decisions for national tenders. They also highlight the impact of high inflation, commodity prices, the lack of access to raw materials, and the lack of trained and skilled labor. They are also concerned that the European players are facing “increased pressure from international competitors,” without naming China’s rapid growth as a threat to the European market.
To counter potential foreign competition, the EC says it will focus on maintaining a fair and competitive international environment. Among the elements of the action plan, the EC commits to closely monitoring possible unfair trade practices. Specifically, they are looking at subsidies and tariffs.
The proactive steps include engaging with investors to identify and address obstacles to investment. They will also support the industry through an Innovation Fund and de-risk financial guarantees using the European Investment Bank. They are also encouraging member states to take advantage of financial programs and the use of export credit agencies.
They look to increase predictability and make the permitting process faster. This will include an increased focus on digitalization of the process. Member states are encouraged to enhance visibility with wind pledges, transparent auction schedules, and improved auction designs.
The commission commits to the launch of a Grids Action Plan and will support the necessary build-out of electricity grids. They will also facilitate the launch of European net-zero industry skills academies, including one dedicated to the wind sector.
Kadri Simson, Commissioner for Energy, notes that the wind sector is key for the achievement of the European Union’s clean energy and climate policies. The action plan is designed to support the industry and accelerate its growth to meet the long-term energy goals.