Germany has identified 36.5GW of offshore wind sites to help it meet its 2030 target, but can it overcome key obstacles?
Germany wants to kickstart growth in offshore wind. The industry grew fast in the 2010s, to total capacity of 7.6GW in 2019, but there has been little of note completed since.
Development has not totally stopped. RWE commissioned the first turbines at its 342MW Kaskasi project in the German North Sea in 2022 and is set to fully commission it in 2023; Parkwind is due to complete its 247MW Arcadis Ost 1 in the German Baltic Sea this year too; and Vattenfall last year exercised its step-in rights to develop 980MW after RWE won the N-7.2 tender in September.
But that isn’t enough for the industry to reach the German government’s goals of 30GW installed offshore wind by 2030 and 50GW by 2035. The targets were set last year in a bid to boost energy security after Russia’s invasion of Ukraine – but the government has needed a plan to get there. It finally got this plan last week.
On Friday, the Federal Maritime & Hydrographic Agency published its development plan for the expansion of offshore wind in the North and Baltic Seas. It sees the plan as a key element to achieving the 2030 goal and laying down a strong foundation for 2035.
This includes details of proposed sites and tenders for the next decade, and should give developers, investors and manufacturers the certainty that they have been sorely lacking. But will it be enough to reinvigorate a stalled sector?
It will take a major effort for Germany to quadruple its installed offshore wind capacity in the 2,896 days we have left until 31st December 2030.
Robert Habeck, German vice-chancellor, said the plan showed it was “serious about planning acceleration” of offshore wind. The plan follows the revised targets that were announced by the German government last November; which won approval from the European Commission in December; and came into law on 1st January 2023.
The plan announced last week goes beyond those targets. It sets out offshore wind sites that could accommodate 36.5GW by 2030; defines the necessary network links; and sets out plans to kick off 1GW of green hydrogen in German waters.
The plan for new capacity includes:
This is in addition to 1.9GW of sites tendered in 2021 and 2022, where the projects are due to complete in 2026 and 2027.
Overall, the government sees the potential to tender 34.7GW of sites in the 2020s, with a further 10.8GW after that. It is seeking 9.5GW completions in 2030 and 4GW annually until 2035, with potential for total capacity of 70GW by 2045 if the area is fully used, including with power-to-X. But what does this mean beyond the numbers?
Companies throughout the value chain will no doubt feel grateful they are getting some clarity and that the government looks set to make good on its offshore promises.
The German offshore wind association BWO called the development plan an “important milestone” for the sector, and said it could help reverse problems caused by a “lack of necessary production capabilities and skilled workers” in the industry.
Yet the government has also come in for criticism from BWO and WindEurope for its plan to introduce negative bidding with no price caps in upcoming tenders. That could expose developers and consumers to additional costs, and hamper projects.
This is a significant concern given that companies worldwide are facing extra pressures and costs to secure raw materials and components to build projects profitably; and any profit concerns could also harm investments in ports, vessels and factories.
There are challenges in German offshore wind that cannot be fixed overnight, and these will hang over any plan. With almost 9GW of offshore wind tenders planned in Germany in 2023, we will soon get a clear view over how this is affecting investor appetite. But the window to tender projects for 2030 is closing soon. Germany has no time for missteps.
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