London, May 2, 2024 /PRNewswire/ — Latest insights summary from the Energy Transition Commission, Overcoming turbulence in the offshore wind sectorhighlights the need for governments and the offshore wind industry to work together to restore market confidence, reduce costs and accelerate the transition to clean energy. ETC members include companies in the offshore wind industry such as bp, Iberdrola, Octopus Energy, Petronas, Shell, SSE and Vattenfall.
Offshore wind power already provides large-scale clean electricity at competitive costs around the world.in western europe, costs decreased by 60% between 2015 and 2022. The number of installations is increasing rapidly. From 2015 to 2023, global capacity will expand six-fold from 12 GW to 74 GW, already producing enough energy for around 90 million homes, and with huge potential for further expansion. Masu.
However, from 2022 to 2023, inflation, supply chain bottlenecks and rising interest rates increased the cost of offshore wind in some markets. There was a perceived 'crisis' in offshore wind, with many projects and contracts cancelled, particularly in the UK and US markets.
Although the increase was significant, most of it is expected to be short-term. Costs in Western markets are already coming down as most of the factors were temporary in nature (e.g. supply chain bottlenecks due to COVID-19, 200% rise in steel costs, etc.), but in the medium term There may remain an increase in financial costs. Meanwhile, technological advances and large-scale production have driven consistent cost reductions. China This indicates that offshore wind power could become even cheaper and more competitive in the future.
“Offshore wind power is essential to the clean energy transition. It can generate electricity even when the sun isn’t shining and it doesn’t compete for land use. If the world is to reach net zero, now is the time to increase wind capacity. This is a critical time for rapid acceleration.''The government will seek to restore market confidence by setting ambitious offshore wind targets and designing auctions and contracts that bring certainty to the market and reduce costs. We should act now. ”
– Adair TurnerChairman of the Energy Transition Committee
The International Energy Agency (IEA) estimates that offshore wind power has the potential to generate more than 420,000 TWh of electricity per year worldwide, which is 14 times more than the world generates today. Achieving a net-zero economy based on clean electricity will require a tenfold increase in annual wind power generation from 2,000 TWh in 2022 to more than 20,000 TWh by 2050. Complementing this is a 30-fold increase in solar power capacity from 1,000 TWh to approximately 30,000 TWh in 2022. TWh by 2050.
However, most countries are not on track to install enough offshore wind capacity by 2030, along a net-zero emissions trajectory.
“Future energy systems will rely on clean, safe and cost-competitive electricity, and this report shows the important role offshore wind will have to play. To understand this, policymakers, system operators, regulators and the industry must: Refocus on expanding the sector's capacity, and the companies that act first will be critical and You can derive lasting economic benefits.”
– Alistair Phillips-DaviesSSE, CEO
Government-industry collaboration can restore trust and reduce costs
Government and industry must work closely to restore confidence in the offshore wind market and reduce costs. To keep the installation of the capacity needed for the transition to clean electricity on track, ETC recommends that governments:
- Setting ambitious goals and pre-defined auction schedules ensure the execution and delivery of large transactions each year.
- Design auctions and government-backed contracts to reduce the risk of non-delivery. Changes should include indexing for inflation to reduce risk for developers and increasing penalties for withdrawing from contracts to reduce the number of contracts treated as optional. Governments must accept to pay a somewhat higher price to remove this option.
- Streamline planning, permitting, and grid connection processes, as well as strengthen the grid and reduce connection latency for offshore wind.
- By promoting harmonization of turbine components and sizes, we ensure that wind turbine and component production achieves economies of scale.
- For example, addressing specific supply chain bottlenecks through guarantees and subsidies for new installation vessels to carry larger turbines. It is about balancing the desire to promote local supply chain content with the need to achieve high production volumes at multiple country/region levels.
“This clarification from ETC reiterates the reality that despite temporary disruptions in the UK and US last year, the offshore wind industry remains on a fundamental global growth trajectory. As the description states, offshore wind power has significant cost savings and is cost-competitive with gas.”Power Governments on every continent are looking to keep the lights on and produce cost-competitive energy at scale. No wonder we are seeing an increasing role for offshore wind in supplying. ”
– rebecca williamsChief Strategy Officer – Offshore Wind, GWEC
“Offshore wind power is a key technology in the energy transition. We are seeing governments and policymakers around the world working hard to add offshore generation capacity to support decarbonization efforts. This is because the offshore wind sector creates opportunities for industrial growth and supports jobs. At the same time, it contributes to energy security and reduces emissions in the energy system. ”
– Agustín Delgado, Chief Innovation and Sustainability Officer, Iberdrola
Overcoming turbulence in the offshore wind sector was developed in collaboration with ETC members from industry, financial institutions, and environmental organizations. ETC is a global coalition of energy industry leaders aiming to achieve net-zero emissions by mid-century, and its members include Arup, BP, HSBC, Iberdrola, National Grid, Octopus Energy, Petronas, Shell, Includes SSE, Rabobank and Vattenfall. , We Mean Business, and World Resources Institute.
Although this report was prepared in consultation with ETC members, it should not be construed as members agreeing with all findings and recommendations.
To access the report, please visit https://www.energy-transitions.org/publications/overcoming-turbulence-in-the-offshore-wind-sector/.
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For more information about ETC, please visit https://www.energy-transitions.org.
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Source Energy Transition Commission
