14th Hamburg Offshore Wind Conference: Industry Shows Self-Confidence

Those who have followed the development of the offshore wind energy sector over the last few years may have noticed that the mood has changed greatly in the case of industry events. Only three to four years ago, discussions and panel sessions often raised the question if it was actually possible at all to reduce costs as demanded by government and public within the announced time schedule. The plan was to save up to 40 percent costs by 2020 to make offshore wind competitive against other types of renewable power generation. And not all experts were then convinced that such a development would actually be possible.

By now things look different though: The industry has clearly drawn a steep learning curve and has presented results in lightning speed. A 40 % cost reduction has already been achieved within the last two years. The prices for offshore wind  are now at almost the same level as onshore wind and photovoltaics. But so far only 15 % of Germany's planned energy transition has actually been achieved, as Hamburg's mayor and patron of the conference, Olaf Scholz, emphasized in his inaugural speech.

The strong development of the offshore industry in recent years has been accompanied by a strengthening of self-confidence. The industry has outgrown its children's shoes and emphasizes its role as a job motor and guarantor for economic growth. Whole regions are benefiting today when a new plant is being built, as the example of Cuxhaven shows, where Siemens is currently setting up a production site for offshore wind power plants scheduled to start operation this year. In addition Siemens has built a test field in Denmark on various innovations, including a Gravity Jacket, designed to better spread the weight of the turbine on the foundation. Simplifying workflows by better software networking is another subject being tested, as Bent Christensen, Head of Cost of Energy at Siemens, explained.

Fast-growing industry: Siemens' 7 MW model is not sold any more – although not one single turbine was ever installed in a wind farm (Photo: Siemens)

But it's not a winners only game with offshore wind as German turbine manufacturer Senvion's example shows. They recently announced that they had to close down their plant in Husum and dismiss 700 workers with harsh consequences for the region not altogether foreseeable. However, it is quite probable that further jobs will be lost in the supply chain.

In the meantime, the attitude of politics towards the industry has also changed: wind power has become a driving force behind the energy transition showing tremendous success in short time. Speed can't be kept up though, as grid expansions show. To get the industry in line again, the German government has implemented the EEG 2017, which has introduced a cap for wind industry and the call for tenders. Germany thus joins a number of countries already using tenders in the offshore sector in order to reduce costs, such as Denmark and the Netherlands.

The introduction of this system in Germany is not a complete breach with the practice so far, since the government tried to get as smooth a transition as possible. However, a very complex legal system has emerged, the direct approach of which is difficult to predict, as attorney Ursula Prall of Becker, Büttner and Held explained in a lecture during the event.

The industry used to look at this system with some concern and now feels constrained by it. In addition to the recent price recordings for offshore wind power in Denmark and the Netherlands, the companies want to build as many projects as possible in the shortest time possible, as a panel discussion at the conference showed. Only a sustained high production can secure long-term jobs and achieve further cost reductions. On the one hand, declared troublemakers for the industry are the Federal Ministry of Economics having introduced said cap. On the other hand, transmission system operators (TSO) are to blame, because they can't keep up with grid extension and integration.

TenneT's 'power hub' is a European project to improve grid integration of offshore wind energy (Image: TenneT)

"The big vision is missing in the political debate," explained Sven Utermöhlen, responsible for offshore wind at E.ON. The euphoria in the initial phase is followed by the great question of where to go with the energy transition. In the end, it is also not sufficient to only build the ‘electricity autobahn’, as the big transmission lines across the country are called in Germany. Ultimately, the energy transition is and will be affected by the inclusion of different sectors, electromobilty among others. Currently, the speed of expansion of renewable energies in Germany is being adapted to the speed of grid expansion. Instead grid expansion should rather be adjusted to climate protection targets. Otherwise the two-degree goal of the Paris Climate Agreement will be missed, stated Jörg Kuhbier, head of Stiftung Offshore Wind Energy.

A strong call to policy not to lay low after the introduction of the EEG 2017, but to continue working on further developing the energy transition – not only in Germany – but united across Europe.