Vattenfall Plans German Offshore Wind Farm After UK Project Exit - gCaptain
Vattenfall Plans German Offshore Wind Farm After UK Project Exit
(Bloomberg) —
Swedish state-owned utility Vattenfall AB is planning further investments in offshore wind energy in Germany, showing confidence in the country’s market soon after shelving a project in the UK.
The company is planning to develop a 630-megawatt offshore wind project in the German North Sea as early as 2028, which together with an adjacent farm could power more than 1.7 million German households, it said on Thursday. The company is taking over an area that had previously been awarded to RWE AG because of changes in the country’s auction system, and it is still subject to a final investment decision.
Vattenfall’s plans to expand in Germany come as the company is in early-stage talks to sell Norfolk Boreas, one of the UK’s largest offshore projects. The company halted the 1.4 gigawatt farm despite its advanced stage of development, citing high interest rates and global supply chain problems. That’s particularly hitting developers in the UK, who say they are receiving insufficient government support.
“In spite of the recently much more difficult framework conditions, which the entire industry is suffering from, we are hereby flying the flag for offshore wind energy in Germany,” said the company’s Germany head Christian Barthelemy.
The move may come as a wake up call for the UK government that’s grappling with serious problems in its once-booming offshore wind industry. After no projects made it through the most recent auction process, the shadow energy secretary Ed Miliband said the government had “trashed the crown jewels of the British energy system.”
The European Commission is also looking to help the region’s struggling wind sector, which is dealing with issues including a lack of access to financing and increased international competition. The bloc will seek to fast-track permitting for wind projects while focusing on easing global supply-chain bottlenecks, the Commission President Ursula von der Leyen said earlier this week.
Vattenfall’s wind park is located next to another one, which it had also acquired via an entry right from RWE last year. The possible synergies of the two neighboring farms — with 1.6 gigawatts of joint capacity — could have a cost-reducing effect, Barthelemy added.
© 2023 Bloomberg L.P.
Sign up for our newsletter
Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.