No new wind farm projects have been launched in the North and Baltic Seas for two years. Component manufacturers are also feeling this. “The offshore wind energy industry is currently doing very badly,” says Karina Würtz, head of the Offshore Wind Energy Foundation. Due to increased costs and a lack of projects, orders worth around 40 billion euros were missing for the coming years.
Robert Dreves, managing director of EEW Special Pipe Constructions in Rostock, also sees difficult times ahead for the industry. EEW produces so-called monopiles there - huge steel foundations for offshore wind turbines. The steel pipes, which are up to 70 meters long and weigh up to 2,000 tons, are brought out to sea in special ships and rammed into the seabed.
High costs for planning and construction
“After many years of successful operation across the entire industry, we now see that there will be less demand on the market in the next few years,” says Dreves. As a result, the capacities that companies have built up in recent years are in danger of being partially empty. The years 2027 and 2028 are particularly worrying for the industry. The reasons include a lack of space tenders and increased material, personnel and financing costs.
Wind farms at sea are complex and expensive. Before construction, the seabed, wind conditions and environment must be examined. There are also gigantic foundations, towers and turbines as well as submarine cables that transport the electricity to land.
Once the systems are in operation, they can produce electricity comparatively cheaply. The electricity generation costs from offshore wind are currently around six to twelve cents per kilowatt hour. Only onshore wind turbines and solar power are cheaper.
Wind energy is particularly in demand in winter
Offshore wind is nevertheless particularly interesting for the energy transition: the wind blows comparatively reliably at sea - and is often particularly strong, especially in winter. This is an important advantage, says Würtz from the Offshore Wind Energy Foundation: "This makes it the most suitable for base load compared to other forms of renewable energy. And it comes exactly when we need it." Heat pumps in Germany require a lot of electricity, especially in winter.
According to experts, with the increasing electrification of transport and heating, electricity demand is likely to continue to rise. At the same time, more domestically produced wind power can reduce dependence on energy imports and thus strengthen the resilience of Europe's energy supply.
Competition from China is growing
But the industry is not only struggling with high costs and a lack of projects. Competition from China is also causing unrest. One example is the monopiles, which are made almost entirely of steel. The EU imposes high tariffs on Chinese crude steel to protect the European steel industry. According to Dreves, these can be more than 70 percent. For EEW this means: The company has to buy its steel in Europe - at twice the price as in China.
Paradoxically, however, Chinese manufacturers can sell their finished monopiles to Europe duty-free. If a monopile is built in China from this cheap steel, it could be imported into Europe without tariffs, criticizes Dreves. This is a significant distortion of competition.
The industry is therefore experiencing déjà vu. Similar to what happened with the solar industry, German and European companies could lose market share to Chinese manufacturers. After the collapse of the domestic solar industry, the offshore wind industry is now also under pressure.
More planning security for new areas
Companies are therefore demanding political changes. One requirement concerns wind areas that are auctioned but not subsequently developed. According to the industry, there is currently unused land in the North Sea with a volume of around 16 gigawatts. From the industry's perspective, the rules for returning such areas need to be improved.
Companies also want more planning security when allocating new space. As part of the amendment to the Offshore Wind Energy Act, the federal government is planning a two-stage process: First, areas will be auctioned off, then the state and operators can negotiate a model for electricity revenues that can be planned in the long term.
Industry demands faster procedures
The industry and science, on the other hand, advocate a one-stage model based on the principle of so-called “Contracts for Difference” (CfD). A long-term electricity price is agreed upon. If the market price is higher, the difference goes to the state; if it is lower, the state makes up the difference.
From the industry's perspective, this creates one thing above all: planning security. “This gives the operator a fixed basis for calculating his revenue over 20 years or longer,” says Würtz. This could reduce financing costs in particular - the largest single cost item in offshore wind projects.
This model is already being used in Great Britain and Denmark. For the German offshore industry, it is now all about speed: new projects must be launched so that the production capacities that have been built up do not remain unused.
