EU North Sea nations lift joint 2030 offshore wind target to 65 GW

Four EU North Sea nations have lifted their combined offshore wind targets to 65 GW by 2030 and 150 GW by 2050, with Denmark, the Netherlands, Germany and Belgium planning to turn the North Sea into Europe's "green powerhouse," heads of state agreed late May 18.

Currently the four nations have around 15 GW installed offshore wind capacity, but there are plans to scale up projects massively including artificial islands to link wind to hydrogen production as project costs have fallen sharply over the past decade, while energy costs have hit record highs.

"By developing joint cooperation projects with our North Sea partners, offshore wind energy in the region can be deployed even faster and more efficiently and new potentials for green hydrogen will be tapped," German energy minister Robert Habeck said.

Europe's power benchmark German Cal 2023 contract has risen 64% since Russia invaded Ukraine on Feb. 24 and hit a record high of Eur232.88/MWh on the EEX on May 17.

Germany's power curve to 2027 now closely resembles the New World power price scenario by S&P Global Commodity Insights required for an accelerated energy transition.

Platts, part of S&P Global Commodity Insights, assessed benchmark TTF gas contracts for 2023, 2024 and 2025 at an average of Eur61.93/MWh on May 17, almost triple an August 2021 forecast by S&P Global for TTF gas for that period, with electricity market prices set by generation costs for marginal units, currently gas-fired power plants.

Energy islands

At the North Sea Summit in Esbjerg, the heads of government from Denmark, Germany, Belgium and the Netherlands signed a joint declaration for the overall framework, with European Commission president Ursula von der Leyen also attending the meeting after presenting the EC's REPowerEU plan.

In addition, energy ministers of the four countries signed bilateral agreements:

• Denmark and Belgium signed an agreement to link Denmark's energy island to Belgium in 2033;
• Denmark and Germany signed a letter of intent on cooperation on green hydrogen based on renewable energy both onshore and offshore;
• Denmark and the Netherlands signed a "ministerial endorsement" to analyze a specific configuration for connection between the Danish energy island and a Dutch offshore energy hub.

The ministers also signed a declaration which, among other things, covers:

• Cooperation on connecting and maximizing capacity on the first energy island in Denmark;
• Planning the establishment of another energy island or hub in the North Sea;
• Work for faster approval processes both nationally and in the EU and ensuring more EU funds for offshore wind projects to reduce risks for investors.

"The North Sea is the perfect place to lead the way in scaling up the offshore capacity quickly," EU Commissioner for Energy Kadri Simson said.

Europe, including Great Britain, is on course to double total offshore wind capacity to 58 GW by 2026, according to the latest outlook by sector association WindEurope.

The world's first merchant wind farm, the 1.5 GW Hollandse Kust Zuid offshore Rotterdam, will start next summer, with similar projects in Denmark and Germany also tendered without direct subsidies.

A number of large energy companies including Shell, BP, TotalEnergies, Vattenfall, Orsted, RWE and SSE have bid in the latest Dutch tender for the 1.5 GW HKW concession.

At least three bids included massive onshore electrolyzer proposals to help integrate offshore wind power into the energy system.

S&P Global forecasts capture prices for German offshore wind to drop sharply to an average of Eur48.20/MWh in 2030, according to its March 29 long-term forecast to 2050.

National targets

Power from 65 GW offshore wind capacity, estimated at around 300 TWh/year assuming load factors just above 50%, "will contribute to large-scale onshore and offshore production of green hydrogen." The four nations contributing have combined 2030 targets of about 20 GW of electrolyzer production capacity.

The key focus for the joint efforts will be the world's first energy island, located in Danish waters with an initial capacity of 3 GW by 2033 and connections to Belgium and Denmark.

Belgium envisages a similar project as part of its 2030 target of 5.8 GW offshore capacity.

Denmark aims for at least 10 GW offshore wind by 2030 with up to 35 GW planned by 2050, it said.

The Netherlands has lifted its 2030 goal to about 21 GW offshore wind capacity, while Germany has lifted its 2030 target to 30 GW, representing a fivefold increase from current installed capacity for the two leading EU nations.

Germany and Denmark also intend to cooperate on the Bornholm Energy Island in the Baltic Sea, including interconnections.

Together, the countries plan to expand Denmark's energy island to its maximum potential capacity of 10 GW by 2040 at the latest, according to the joint declaration.

Preliminary findings are to be presented within one year, taking stock in December at the EU energy council, it said.