European Union Offshore Wind Strategy
Europe is not just in a race to meet its medium- and long-term climate targets and to enable the energy transition. For geopolitical and energy security reasons, it is now also in a race to end its dependence on imports of Russian oil, refined products and gas imports as quickly as possible. As a result of the current war in Ukraine, the European Union (EU) is now working against the clock. While the Commission has signalled that an all-hands-on-deck approach is necessary to encourage a range of renewable and fossil-free energy supplies in the coming years, it is increasingly evident that the main large-scale sources of energy production on the continent in the coming 5–10 years will be from offshore wind. Other options with large-scale potential, such as nuclear, are still politically contested, while also widely regarded as having longer lead times. A large-scale uptake in offshore wind deployment in Europe is therefore one of the EU’s top energy and climate priorities. Offshore wind, alongside a developed hydrogen economy, are viewed as the centrepieces in EU’s strategy to reach its net-zero climate target by 2050, and the offshore wind industry is gaining more traction both from finance institutions and future offtakers.
Despite strong interest both from policymakers and market players, the growth in offshore wind projects has been relatively low and is definitely too slow for the EU Commission to reach the EU’s offshore wind target of 300 GW by 2050. This energy insight investigates the policy and regulatory challenges that the offshore wind industry is currently facing in their permitting processes, market integration steps, and project cost calculations. It analyses the EU’s offshore wind strategy and related EU regulations are put in context of the volume target for offshore wind, as stated in the EU’s strategy. It also looks at the current cost environment for the offshore wind industry and ends with a discussion on how businesses can manage both the challenging regulatory and cost environments at an early stage by developing projects with more holistic business solutions.