June 23, 2024
Owner's Engineer banner
HomeSEE Energy NewsEU: EC prepared Wind Power Package

EU: EC prepared Wind Power Package

Supported byClarion Energy banner

The European Commission is planning to table a European Wind Power Package on Tuesday (24 October), aiming to strengthen the EU’s wind industry by solving the challenges it is facing, according to leaked drafts seen by Euractiv.

Wind power is viewed as crucial to replacing fossil fuels and boosting domestic energy production, but the EU is falling behind on installation if it wants to meet its 2030 climate and energy goals.

“Wind energy is renewable, abundantly available in the EU, and secure. It is pivotal to meet the EU’s decarbonisation objectives and deliver clean, affordable and secure electricity to our households, our industry and increasingly our transport sector,” according to one of the leaked drafts.

But despite its importance and the demand for more renewables, the sector is struggling. All of the largest wind turbine manufacturers reported significant operating losses in 2022, the leak warns, citing the International Renewable Energy Agency.

“The EU cannot double the wind energy pace of deployment without a healthy, sustainable and competitive wind supply chain. And the wind industry cannot be healthy without a clear and secure pipeline of projects, attracting the necessary financing and competing on a level playing field globally,” the draft action plan warns, calling for “immediate action”.

The European Wind Power Package aims to solve these issues with a ‘Wind Power Action Plan’ and a communication on ‘Delivering on the EU offshore renewable energy ambitions’.

The draft documents, seen by Euractiv and subject to change before publication, lay out what the EU has done to promote wind power and offshore renewables, including new laws and money, and what further steps are required to help the industry.

The draft action plan looks at supporting European companies in the wind sector and improving their competitiveness with actions that “should be urgently undertaken”.

It identifies five difficulties for European wind equipment manufacturers:

“The under-utilisation of production capacities, driven by inadequate and uncertain demand for wind turbines in the EU”, with the industry estimating that 80 GW of capacity is currently stuck in permitting procedures, much of it for years.

“High inflation and commodity prices, combined with limited hedging by wind equipment manufacturers against input price volatility,” which erodes the sector’s finances.

Design of national support focusing on price criteria rather than environmental and social standards in European products and supply chain resilience.

Pressure from international competitors, including China, an important supplier of raw materials and components to the EU and an increasingly serious competitor globally.

Availability of skilled workers in the wind manufacturing sector that risks impacting the speed of European production capacity, particularly in offshore wind.

Beleaguered wind industry turns to European governments for help

While European governments boost their wind power ambitions, the industry is struggling with rising production costs and growing competition from China.

Redesigned wind auctions

One focus of the action plan is to design auctions for new wind power generation capacity that do not prioritise the cheapest bids, where Chinese manufacturers have an edge over European companies.

The idea is to encourage “non-price award criteria which reward higher value added products and promote industrial scale-up that can better support an innovative and competitive wind manufacturing industry,” the draft document says.

Brussels also wants more uniform auction designs, with “non-discriminatory pre-qualification” criteria looking at emerging issues like cyber-resilience among other things.

The European Commission will launch a dialogue between EU countries, industry players and other stakeholders to improve and simplify auctions. Based on this, the European Commission will adopt guidance by the end of March 2024.

Alongside this, the EU executive will work with the wind industry to “closely monitor possible unfair trade practices which benefit foreign wind manufacturers,” including the potential subsidisation of wind-related products entering the EU.

“If justified, the Commission will activate its trade defence instruments,” the lead document warns.

It will also look at helping manufacturers access markets beyond the EU, boosting skills and increasing access to EU money pots.

Permitting and grids

The action plan also seeks to improve permitting and grid capacity. This includes potentially extending temporary rules aimed at easing red tape to “send a strong signal to the industry and member states about the need to urgently accelerate deployment of wind and other renewable energy sources”.

Alongside this, the European Commission will launch ‘Accele-RES’, an initiative aimed at speeding up the implementation of the new renewable energy law, particularly when it comes to permitting. This may be key as the previous renewables directive dating back from 2018 has still not been fully implemented.

In addition, the EU executive will launch a “dedicated online tool to support member states in the permitting process” by the end of the year. By April 2024, it will update its recommendation on speeding up permit-granting procedures for renewable energy projects and guidance on good practices for speeding up permit-granting procedures.

The action plan also looks at creating more certainty for project developers and manufacturers by calling on EU countries to set up detailed implementation plans for the new renewables law and increase visibility on the pipeline of upcoming wind projects.

The initiative will be complemented by an “action plan to facilitate grids build-out,” expected to be presented in November 2023.

This will help accelerate key cross-border electricity grid projects that are “crucial to integrate increasing volumes of renewables and advance energy system integration”. It will also include measures to address bottlenecks holding up grid reinforcement and expansion, the document says.

EU countries lagging behind on wind energy goals, WWF warns

Current wind energy deployment rates in European countries are not aligned with the EU’s climate change targets, according to a report published on Thursday (5 October) by the nature conservation NGO WWF.

Boosting offshore wind

The Wind Power Action Plan will be published on Tuesday alongside a communication on delivering on Europe’s offshore renewable energy ambitions.

“Offshore renewables are set to become an indispensable part of the energy mix that will be necessary to decarbonise and reach climate neutrality,” according to the leaked draft of the proposal.

“In 2022, the cumulative EU-27 offshore installed capacity amounted to 16.3 GW. To bridge the gap between the 111 GW committed by member states and the installations in 2022, we must install almost 12 GW/year on average. This is 10 times more than the 1.2 GW that were installed in 2022,” it warns.

The communication identifies similar issues as those in the action plan, including in permitting, skills, supply chains and squeezed profit margins.

It looks at developing cross-border offshore grids, supporting innovation, fast-tracking permitting, improving maritime spatial planning, strengthening the resilience of infrastructure following the sabotage of the Nord Stream gas pipeline, and securing supply chains.

The plan also seeks to ensure that EU countries exporting renewable energy to other EU states are duly rewarded for doing so, with the Commission currently assessing ways of sharing the benefits, Euractiv reports.

RELATED ARTICLES

Supported byOwner's Engineer
Supported by
Supported byClarion Energy
Supported by
error: Content is protected !!