Europe's offshore renewable energy industry is not yet capable of fulfilling the ambitions of governments to rapidly expand green power, according to European companies from the sector. In a joint statement released on Monday, more than 100 firms and industry groups called for a jump in policy support and funding to accelerate progress.
The statement was released as leaders from nine countries, including Germany, France, and the UK, gathered in Ostend, Belgium, to pledge to more than quadruple offshore wind capacity in the North Sea by 2030. However, the signatories argued that the industry's current manufacturing capacity of seven gigawatts of offshore wind per year is insufficient to meet rising demand for renewable electricity and hydrogen.
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“To deliver the nine governments' commitments and meet the rising demand for renewable electricity and renewable hydrogen, our industry is not large enough today,” they said, before pledging to “do everything we can” to ensure new wind farms are manufactured in Europe.
The companies involved in the statement include energy firms Orsted, Shell, and Equinor, wind turbine manufacturer Siemens Gamesa, Britain's National Grid, renewable hydrogen equipment manufacturer Nel, and industry group Wind Europe.
To achieve the required progress, the companies argued that more than 20GW of offshore wind capacity will need to be added each year in a few years' time. However, investment decisions in European offshore wind farms fell sharply in 2022, with developers struggling with high inflation, interest rates, seabed leasing fees, and volatile energy markets.
While investment has since rebounded, the firms called for further support from governments and the EU to ensure Europe's renewables sector can deliver the necessary build-out to hit targets. Without additional backing, there is a risk of increased reliance on imported parts, they warned.
Among the measures proposed by the companies were increased government and EU funding to expand Europe's manufacturing of renewable energy components and inflation-indexed prices in government auctions to support wind farms. The firms also urged the EU not to extend its cap on power generators' revenues, which is set to expire in June. The scheme was introduced last year to reduce cash from soaring power prices and return it to consumers but was criticized by industry for deterring investors.
As the signatories emphasized, the success of Europe's renewable energy industry is critical in helping to mitigate climate change. Speaking at the COP26 climate summit last year, British Prime Minister Boris Johnson said: “Our oceans possess huge untapped potential to power our homes and economies without producing emissions.” To realize this potential, European governments and policymakers must now respond to the industry's call for greater support and investment.
