Friday, 4 December 2009
Politics of Wind
The Renewable Energy Sources Act (EEG)
The legal framework provided by the Electricity Feed Act (StreG)1991 and thereafter by the Renewable Energy Sources Act (EEG) 2000 has been a decisive factor in the success of the wind industry and for the major increase in the implementation of wind energy on land. The EEG which has since been amended in 2004 and 2009- , implements the EU Directive on the Promotion of Renewable Energies. The Act promotes more efficient conditions for the feed-in, transfer, and payment of electric power from renewable sources. In turn, this has spurred the efficient adaptation of technological development.
The purpose of the EEG is to increase the share of the renewable energies in the electricity generation to at least 30 % by 2020. The EEG stipulates compensation for electric-power generation from renewable energy sources in the domestic electricity market. Grid operators must purchase electricity from renewable sources as a priority. Degressive tariffs have assisted in advancing the development of efficient and economical technologies. A principle aim of the EGG is to improve the efficiency of feed-in, transfer of payments, and technological adaptation for renewable energy sources.
The EGG provides wind farm developers and turbine manufacturers with a solid basis for calculated planning by guaranteeing the economic viability of wind energy facilities. The resulting growth and continued development with wind technology have enabled ongoing technical progress, ultimately achieving an economy of scale. Cost reductions, technological innovations and synergetic effects have increased economic viability even further.
Reimbursement for Offshore Wind Farms
A specific ordinance in the amendment of the Renewable Energy Sources Act as came into effect in January 2009 provides reimbursement for electricity from offshore wind farms (s. figures below).
In order to promote early construction of wind energy, the Renewable Energy Sources Act establishes a starting reimbursement higher than that of the base reimbursement, the details of which are outlined below. The starting reimbursement may be extended under specific circumstances for offshore wind development, based on the hardship involved with project actualization as distance from the coast and water depth.. After this period of the higher starting reimbursement the payment goes down to the level of base reimbursement.
In order to foster the development of efficient and cost effective technologies the starting reimbursement decreases by 5% annually for wind energy turbines that are installed after 2015.
Note that offshore development is in part defined as being constructed at least three nautical miles seaward from the coast.
Reimbursement according to the EEG 2009:
- Starting reimbursement = €0.13/kWh for first 12 years)
- Every wind energy plant which is in use before 01.01.2016 gains an extra bonus of €0.02/kWh (so-called sprinter bonus)
- The period of 12 years for the starting reimbursement will be extended according to distance from the coast and water depth:
- 0.5 month for every nautical mile over an initial coast-distance from 12 nautical miles
- 1.7 months for every meter over an initial water-depth from 20 meters - Base reimbursement = €0.035/kWh
- Decrease of the starting reimbursement by 5% for new wind farms constructed after 2015
Presentation of the Reimbursment for Offshore Wind Farms (EEG)
(enlarge the graphs by clicking on them)
Facts: Offshore wind potential
More wind
The economic viability of offshore wind farms depends heavily on the quality of the sites. Much higher winds at sea, combined with more advanced technological development, will partially make up for the higher investments needed to build offshore facilities and connect them to the electrical grid. Two decisive factors in choosing sites are the depth of water and distance from the coast. Priority is therefore given to areas which are relatively close to the coast and not more than 30 meters in depth.
Potential
A variety of forecasts indicate that the potential for exploiting offshore wind energy is great. But the forecasts also vary considerably because technological and economic viability is still uncertain. Besides, numerous other interests (shipping, fisheries, defence and nature conservation) all reduce this potential in practice.
The German government's strategy
Under the overall management of the Federal Ministry for the Environment, Nature Conservation and Reactor Safety (BMU), the German government has developed a strategy on the use of offshore wind energy that takes nature conservation and other interests into account. According to this, the installation of 20,000 to 25,000 MW of offshore capacity is seen as possible by 2030. The plan identifies low-conflict areas which could be considered suitable for offshore wind energy installations. These areas were classified as special areas suitable for wind energy after an appraisal of the various interests on the basis of the Marine Facilities Ordinance.
North and Baltic Seas are good places to start
North and Baltic Seas will play a central role in the utilisation of offshore wind energy. For starters, the use of onshore wind energy has already progressed furthest in these regions, a result of which less land sites are available. Secondly, wind energy will become competitive more quickly in Northwestern Europe because the cost of electricity is high in an international comparison. Thirdly, the North and Baltic Seas are quite shallow and close to large urban areas, making them very suitable for this form of energy. The development of offshore wind power consequently promises significant potential for the export of electricity to neighbouring countries and the development of offshore ports.
Oceans of Opportunity
Oceans of Opportunity
Europe's offshore wind potential is enormous and able to power Europe seven times over.
Huge developer
interest
Over 100 GW of offshore wind projects are already in various stages of planning. If realised, these projects would produce 10% of the EU's electricity whilst avoiding 200 million tonnes of CO2 emissions each year. 1.5 GW is currently operating.
Repeating the onshore success
EWEA has a target of 40 GW of offshore wind in the EU by 2020, implying an average annual market growth of 28% over the coming 12 years. The EU market for onshore wind grew by an average 32% per year in the 12-year period from 1992-2004 – what the wind energy industry has achieved on land can be repeated at sea.
Building the offshore grid
EWEA's proposed offshore grid builds on the 11 offshore grids currently operating and 21 offshore grids currently being considered by the grid operators in the Baltic and North Seas to give Europe a truly pan-European electricity super highway.
Realising the potential
Strong political support and action from Europe's policy-makers will allow a new, multi-billion euro industry to be built.
Results that speak for themselves
This new industry will deliver thousands of green collar jobs and a new renewable energy economy and establish Europe as world leader in offshore wind power technology.
A single European electricity market with large amounts of wind power will bring affordable electricity to consumers, reduce import dependence, cut CO2emissions and allow Europe to access its largest domestic energy source.
Oceans of Opportunity: Harnessing Europe's largest domestic energy resource
Offshore wind power is vital for Europe's future. Offshore wind power provides the answer to Europe's energy and climate dilemma – exploiting an abundant energy resource which does not emit greenhouse gases, reduces dependence on increasingly costly fuel imports, creates thousands of jobs and provides large quantities of indigenous affordable electricity. This is recognised by the European Commission in its 2008 Communication ‘Offshore Wind Energy: Action needed to deliver on the Energy Policy Objectives for 2020 and beyond'.
Europe is faced with the global challenges of climate change, depleting indigenous energy resources, increasing fuel costs and the threat of supply disruptions. Over the next 12 years, according to the European Commission, 360 GW of new electricity capacity – 50% of current EU capacity – needs to be built to replace ageing European power plants and meet the expected increase in demand. Europe must use the opportunity created by the large turnover in capacity to construct a new, modern power system capable of meeting the energy and climate challenges of the 21st century while enhancing Europe's competitiveness and energy independence.
EWEA target
In March, at the European Wind Energy Conference 2009 (EWEC 2009), the European Wind Energy Association (EWEA) increased its 2020 target to 230 GW wind power capacity, including 40 GW offshore wind. Reaching 40 GW of offshore wind power capacity in the EU by 2020 is a challenging but manageable task. An entire new offshore wind power industry and a new supply chain must be developed on a scale that will match that of the North Sea oil and gas endeavour. However, the wind energy sector has a proven track record onshore with which to boost its confidence, and will be significantly longer lived than the oil and gas sector.
To reach 40 GW of offshore wind capacity in the EU by 2020 would require an average growth in annual installations of 28% - from 366 MW in 2008 to 6,900 MW in 2020. In the 12 year period from 1992-2004, the market for onshore wind capacity in the EU grew by an average 32% annually: from 215 MW to 5,749 MW. There is nothing to suggest that this historic onshore wind development cannot be repeated at sea.
Unlimited potential
By 2020, most of the EU's renewable electricity will be produced by onshore wind farms. Europe must, however, use the coming decade to prepare for the large-scale exploitation of its largest indigenous energy resource, offshore wind power. That the wind resource over Europe's seas is enormous was confirmed in June by the European Environment Agency's (EEA) ‘Europe's onshore and offshore wind energy potential'. The study states that offshore wind power's economically competitive potential in 2020 is 2,600 TWh, equal to between 60% and 70% of projected electricity demand, rising to 3,400 TWh in 2030, equal to 80% of the projected EU electricity demand. The EEA estimates the technical potential of offshore wind in 2020 at 25,000 TWh, between six and seven times greater than projected electricity demand, rising to 30,000 TWh in 2030, seven times greater than projected electricity demand. The EEA has clearly recognised that offshore wind power will be key to Europe's energy future.
Over 100 GW already proposed
It is little wonder therefore that over 100 GW of offshore wind energy projects have already been proposed or are already being developed by Europe's pioneering offshore wind developers. This shows the enormous interest among Europe's industrial entrepreneurs, developers and investors. It also shows that EWEA's targets of 40 GW by 2020 and 150 GW by 2030 are eminently realistic and achievable. The 100 or more GW is spread across 15 EU Member States, as well as three other European countries. The rewards for Europe exploiting its huge offshore wind potential are enormous – this 100 GW will produce 373 TWh of electricity each year, meeting between 8.7% and 11% of the EU's electricity demand, whilst avoiding 202 million tonnes of CO2 in a single year.
In order to ensure that the 100 GW of projects can move forward, and reach 150 GW of operating offshore wind power by 2030, coordinated action is required from the European Commission, EU governments, regulators, the transmission system operators (TSOs) and the wind industry. Working in partnership on developing the offshore industry's supply chain, putting in place maritime spatial planning, building an offshore electricity grid based on EWEA's 20 Year Offshore Network Development Master Plan, and ensuring continued technological development for the offshore industry, are key issues.
By 2020, the initial stages of an offshore pan-European grid should be constructed and operating with an agreed plan developed for its expansion to accommodate the 2030 and 2050 ambitions.
Grids
The future transnational offshore grid will have many functions, each benefitting Europe in different ways. It will provide grid access to offshore wind farms, smooth the variability of their output on the markets and improve the ability to trade electricity within Europe, thereby contributing dramatically to Europe's energy security.
We must stop thinking of electrical grids as national infrastructure and start developing them – onshore and offshore -- to become European corridors for electricity trade. And we must start developing them now. The faster they are developed, the faster we will have a domestic substitute if future fuel import supplies are disrupted or the cost of fuel becomes prohibitively expensive, as the world experienced during 2008.
The future European offshore grid will contribute to building a well-functioning single European electricity market that will benefit all consumers, with the North Sea, the Baltic Sea and the Mediterranean Sea leading the way. Preliminary assessments of the economic value of the offshore grid indicate that it will bring significant economic benefits to all society.
Europe's offshore grid should be built to integrate the expected 40 GW of offshore wind power by 2020, and the expected 150 GW of offshore wind power by 2030. It is for this reason that EWEA has proposed its 20 Year Offshore Network Development Master Plan. This European vision must now be taken forward and implemented by the European Commission and the European Network of Transmission System Operators (ENTSO-E), together with a new business model for investing in offshore power grids and interconnectors which should be rapidly introduced based on a regulated rate of return for new investments.
2010 will be a key year for grid development planning
The European Commission will publish a ‘Blueprint for a North Sea Grid' (also referred to as a North West Offshore Grid) making offshore wind power the key energy source of the future. ENTSO-E will publish its first 10 Year Network Development Plan, which should, if suitably visionary, integrate the first half of EWEA's 20 Year Offshore Network Development Master Plan. The European Commission will also publish its EU Energy Security and Infrastructure Instrument which must play a key role in putting in place the necessary financing for a pan-European onshore and offshore grid, and enable the European Commission, if necessary, to take the lead in planning such a grid.
Supply chain
The offshore wind sector is an emerging industrial giant. But it will only grow as fast as the tightest supply chain bottleneck. It is therefore vitally important that these bottlenecks are identified and addressed so as not to constrain the industrial development. Turbine installation vessels, substructure installation vessels, cable laying vessels, turbines, substructures, towers, wind turbine components, ports and harbours must be financed and available in sufficient quantities for the developers to take forward their 100 GW of offshore wind projects in a timely manner.
Through dramatically increased R&D and economies of scale, the cost of offshore wind energy will follow the same path as onshore wind energy in the past. The technical challenges are greater offshore but no greater than when the North Sea oil and gas industry took existing onshore extraction technology and adapted it to the more hostile environment at sea. An entire new offshore wind power industry and a new supply chain must be developed on a scale that will match that of the North Sea oil and gas endeavour, but one that will have a much longer life.
Technology
Offshore wind energy has been identified by the European Union as a key power generation technology for the renewable energy future, and where Europe should lead the world technologically. The support of the EU is necessary to maintain Europe's technological lead in offshore wind energy by improving turbine design, developing the next generation of offshore wind turbines, substructures, infrastructure, and investing in people to ensure they can fill the thousands of new jobs being created every year by the offshore wind sector.
Spatial planning
The decision by countries to perform maritime spatial planning (MSP) and dedicate areas for offshore wind developments and electricity interconnectors sends clear positive signals to the industry. Provided the right policies and incentives are in place, MSP gives the industry long-term visibility of its market, and enables synergies with other maritime sectors. Consolidated at European level, such approaches would enable investments to be planned out. This would enable the whole value chain to seek investment in key elements of the supply chain (e.g. turbine components, cables, vessels, people) while potentially lowering risks and capital costs.
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Floating Wind Farms in North Sea
While our oceans house not only diverse ecologies and possibly the lost city of Atlantis, they now have something else to brag about: serving as prime real estate for some very renewable energy. Norwegian energy group Norsk Hydro is to place giant floating wind turbines in the North Sea that will provide a reasonable, environmentally-friendly and economically feasible alternative to standard energy generation processes. “It’s attractive to have windmills out at sea, out of sight of land, away from birds’ migration routes,” said Alexandra Bech Gjoerv, head of Hydro’s New Energy division at a signing ceremony to develop floating wind turbine technology.
The design by Norsk Hydro uses a three -able tethered system, similar to the ones used in oil rigs, that holds a 200 meter tall steel tube with an attached turbine and three 60-meter-long blades.Norsk Hydro expects to be able to use this technology on sites located 50-100 miles off shore, and with a depth of up to 500 meters. Norsk Hydro’s turbine will be the first large scale prototype of its kind, expected to be installed in the North Sea by 2009. If successful, Norsk Hydro expects a full windmill to be operational by 2012.
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