New offshore wind deals signal brighter prospects
London, 7 March (Argus) — Momentum is building for the development of the offshore wind sector in France, Poland and Italy with utilities gearing up to develop projects and governments taking steps to improve framework conditions.
All three countries, which have some of the longest coastlines in Europe, have failed to build momentum in the offshore wind sector and have zero installed capacity.
A lack of strong domestic support has hindered its development in France, where nuclear capacity comprises 72pc of the generation mix. Poland's ruling Law and Justice Party passed legislation in 2016 hindering renewables development and favours the coal and mining industries. Italy has subsidised solar installations, but has allocated less to wind.
But deals in the French and Polish offshore wind sector announced this week suggest that interest in developing projects is increasing.
Swedish state-owned utility Vattenfall said yesterday it would team up with French financial firm Caisse des Depots and German wind developer WPD to prepare a bid for a French offshore wind tender to construct a facility of 250-750MW off the coast of Dunkerque.
A total 10 groups have prequalified for the project.
"To gain a foothold [in France] will allow us to consolidate our position as a leading global developer of offshore wind energy," Vattenfall senior vice president Gunnar Groebler said.
France's Ministry of Energy launched its first call for tenders for offshore wind in July 2011, but the government has recently taken more steps to facilitate development. It simplified the administrative and legal obstacles for wind power projects in 2015 and 2016. And a working group published a set of 10 proposals in January aimed at speeding up the pace of wind installations, as projects currently take 7-9 years to come on line.
France has at least 2.5GW of offshore projects either approved or planned, but all have completion dates of 2021.
Polish utility Polenergia sold a 50pc stake in two early phase offshore wind projects to Norway's Statoil on 5 March.
The two projects — Baltyk Srodkowy II and Baltyk Srodkowy III — have a planned capacity of 1.2GW. Statoil will be in charge of the projects' development, construction and operational phases.
"This acquisition strengthens our presence in the Baltic Sea, giving opportunities for scale and synergies in a longer perspective," Statoil executive vice president of new energy solutions Irene Rummelhoff said.
Poland has 7.2GW of onshore wind capacity installed and no offshore capacity. Momentum for onshore wind power expansion stalled after legislation was passed in 2016 which heavily constrained wind development opportunities by limiting permissible construction sites.
Prospects for offshore wind projects improved as legislation was approved on 5 March to amend the country's renewables law. The reforms aim to increase renewables output by adjusting the country's auctioned feed-in tariffs and its premium for renewable products. And the energy ministry has won EU funding to soften the impacts of upcoming closures of coal mines and coal-fired plants, signalling possible growing support for renewables.
Italy has subsidised its solar sector and has nearly 20GW of installed capacity, but its wind sector is limited by comparison — with around 9GW — and it has no installed offshore wind capacity.
It has so far pursued only relatively small wind projects, all of which would be located in the country's southern region. Italian company Trevi Energia submitted a request for maritime state concession to build a wind farm of 165MW in the region of Apulia in January. And Luxembourg-based renewables company Belenergia has nearly completed a 30MW project off the Taranto harbour due to be finished this year.