Curbing Offshore Ambitions

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Adam Barber
November 15, 2013
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This content is from our archive. Some formatting or links may be broken.
Curbing Offshore Ambitions

The last European Wind Energy Association Offshore conference in Amsterdam two years ago took place under some very different market conditions.

In our assessment of that conference, we reported that most delegates bemoaned a lack of firmer political targets for offshore wind development beyond 2020.

So whilst the industry has gone through quite a learning curve on the ground - as technology has evolved, installation methods have improved and the finance industry has started to take a bigger interest - the macro picture is still bedeviled by uncertainty.

This uncertainty was increased further this week, in the conference’s host country, Germany, as Berlin announced a reduction in its offshore wind targets to 6.5GW by 2020 and 15 gigawatts by 2030, from 10GW and 25GW, respectively.

The official industry response from the German offshore wind lobby, BWE, was that now was not yet the time to panic.

And to be fair, that’s probably about right. There were some industry protagonists who questioned whether the German industry would have reached its initial targets anyway, particularly given the continued delays seen in the connection of German offshore wind energy projects to the national grid.

It does, however, raise questions as to whether with this downsizing, Germany will continue to push towards the cost reduction in renewables that the politicians in Berlin are demanding.

After all, the industry will need to continually see growth and expansion if long run costs are to be reduced through economies of scale.

We’ll see what the next few days brings, but the market will certainly continue to see challenging times ahead. Not least as some of the largest players struggle with their business models.

The industry will have to work hard this week to ensure delegates in Frankfurt go away with reasons to be cheerful.

The last European Wind Energy Association Offshore conference in Amsterdam two years ago took place under some very different market conditions.

In our assessment of that conference, we reported that most delegates bemoaned a lack of firmer political targets for offshore wind development beyond 2020.

So whilst the industry has gone through quite a learning curve on the ground - as technology has evolved, installation methods have improved and the finance industry has started to take a bigger interest - the macro picture is still bedeviled by uncertainty.

This uncertainty was increased further this week, in the conference’s host country, Germany, as Berlin announced a reduction in its offshore wind targets to 6.5GW by 2020 and 15 gigawatts by 2030, from 10GW and 25GW, respectively.

The official industry response from the German offshore wind lobby, BWE, was that now was not yet the time to panic.

And to be fair, that’s probably about right. There were some industry protagonists who questioned whether the German industry would have reached its initial targets anyway, particularly given the continued delays seen in the connection of German offshore wind energy projects to the national grid.

It does, however, raise questions as to whether with this downsizing, Germany will continue to push towards the cost reduction in renewables that the politicians in Berlin are demanding.

After all, the industry will need to continually see growth and expansion if long run costs are to be reduced through economies of scale.

We’ll see what the next few days brings, but the market will certainly continue to see challenging times ahead. Not least as some of the largest players struggle with their business models.

The industry will have to work hard this week to ensure delegates in Frankfurt go away with reasons to be cheerful.

The last European Wind Energy Association Offshore conference in Amsterdam two years ago took place under some very different market conditions.

In our assessment of that conference, we reported that most delegates bemoaned a lack of firmer political targets for offshore wind development beyond 2020.

So whilst the industry has gone through quite a learning curve on the ground - as technology has evolved, installation methods have improved and the finance industry has started to take a bigger interest - the macro picture is still bedeviled by uncertainty.

This uncertainty was increased further this week, in the conference’s host country, Germany, as Berlin announced a reduction in its offshore wind targets to 6.5GW by 2020 and 15 gigawatts by 2030, from 10GW and 25GW, respectively.

The official industry response from the German offshore wind lobby, BWE, was that now was not yet the time to panic.

And to be fair, that’s probably about right. There were some industry protagonists who questioned whether the German industry would have reached its initial targets anyway, particularly given the continued delays seen in the connection of German offshore wind energy projects to the national grid.

It does, however, raise questions as to whether with this downsizing, Germany will continue to push towards the cost reduction in renewables that the politicians in Berlin are demanding.

After all, the industry will need to continually see growth and expansion if long run costs are to be reduced through economies of scale.

We’ll see what the next few days brings, but the market will certainly continue to see challenging times ahead. Not least as some of the largest players struggle with their business models.

The industry will have to work hard this week to ensure delegates in Frankfurt go away with reasons to be cheerful.

The last European Wind Energy Association Offshore conference in Amsterdam two years ago took place under some very different market conditions.

In our assessment of that conference, we reported that most delegates bemoaned a lack of firmer political targets for offshore wind development beyond 2020.

So whilst the industry has gone through quite a learning curve on the ground - as technology has evolved, installation methods have improved and the finance industry has started to take a bigger interest - the macro picture is still bedeviled by uncertainty.

This uncertainty was increased further this week, in the conference’s host country, Germany, as Berlin announced a reduction in its offshore wind targets to 6.5GW by 2020 and 15 gigawatts by 2030, from 10GW and 25GW, respectively.

The official industry response from the German offshore wind lobby, BWE, was that now was not yet the time to panic.

And to be fair, that’s probably about right. There were some industry protagonists who questioned whether the German industry would have reached its initial targets anyway, particularly given the continued delays seen in the connection of German offshore wind energy projects to the national grid.

It does, however, raise questions as to whether with this downsizing, Germany will continue to push towards the cost reduction in renewables that the politicians in Berlin are demanding.

After all, the industry will need to continually see growth and expansion if long run costs are to be reduced through economies of scale.

We’ll see what the next few days brings, but the market will certainly continue to see challenging times ahead. Not least as some of the largest players struggle with their business models.

The industry will have to work hard this week to ensure delegates in Frankfurt go away with reasons to be cheerful.

The last European Wind Energy Association Offshore conference in Amsterdam two years ago took place under some very different market conditions.

In our assessment of that conference, we reported that most delegates bemoaned a lack of firmer political targets for offshore wind development beyond 2020.

So whilst the industry has gone through quite a learning curve on the ground - as technology has evolved, installation methods have improved and the finance industry has started to take a bigger interest - the macro picture is still bedeviled by uncertainty.

This uncertainty was increased further this week, in the conference’s host country, Germany, as Berlin announced a reduction in its offshore wind targets to 6.5GW by 2020 and 15 gigawatts by 2030, from 10GW and 25GW, respectively.

The official industry response from the German offshore wind lobby, BWE, was that now was not yet the time to panic.

And to be fair, that’s probably about right. There were some industry protagonists who questioned whether the German industry would have reached its initial targets anyway, particularly given the continued delays seen in the connection of German offshore wind energy projects to the national grid.

It does, however, raise questions as to whether with this downsizing, Germany will continue to push towards the cost reduction in renewables that the politicians in Berlin are demanding.

After all, the industry will need to continually see growth and expansion if long run costs are to be reduced through economies of scale.

We’ll see what the next few days brings, but the market will certainly continue to see challenging times ahead. Not least as some of the largest players struggle with their business models.

The industry will have to work hard this week to ensure delegates in Frankfurt go away with reasons to be cheerful.

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Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.