Today (April 10) Europe's wind industry proposed a new deal to speed up and de-risk the build-out of homegrown and competitive offshore wind energy. The proposal calls on European Governments to auction at least 100 GW of new offshore wind over 2031-2040. Crucially these auctions should use two-sided Contracts for Difference. The offshore build-out should be more coordinated among European countries and distributed more evenly over time. The visibility on volume and revenues from a stable pipeline of Contract-for-Difference auctions will help reduce costs and ensure offshore wind plays its role in delivering Europe's energy objectives. The industry commits to reducing the cost of offshore wind by 30% by 2040.
Europe faces unprecedented challenges. It must address the weaponisation of energy and strengthen its energy security. It must strengthen its industrial competitiveness and make electricity more affordable. And it must stay the course on decarbonisation.
Homegrown and affordable offshore wind energy is a central solution here. Over the past decade offshore wind has scaled up quickly and reduced costs significantly. Today it provides reliable electricity for millions of people as well as businesses.
To meet Europe's growing demand for offshore wind, annual offshore wind installations must reach 15 GW by the 2030s. But increased investment uncertainty, insufficient levels of electrification and high-risk auction frameworks put the commercial viability of projects at risk. Investor confidence is declining.
To reverse these trends the European wind industry proposes a New Offshore Wind Deal for Europe. The European wind industry calls on Governments to:
- Commit to 100 GW Contracts for Difference (CfDs): Auction out at least 100 GW CfDs over 10 years with firm political commitment through fixed price and indexed contracts (2-sided CfD or similar instruments) in an optimised and de-risked auction framework to create bankable projects.
- Consistent commissioning: Plan the commissioning deadlines of the 100 GW evenly with 10 GW annually from 2031-2040 to create market predictability through cross-border planning, while ensuring sufficient flexibility on commissioning dates to allow for optimal supply chain utilisation and investments.
Along with additional capacity backed by Power Purchase Agreements, this will lay the foundation for a sustainable and competitive offshore wind industry to achieve 15 GW installations annually by the 2030s.
These priorities must be accompanied by broader measures to accelerate electrification, support energy-consuming industries' competitiveness, and requiring a step-change in grid development and financing.
This will lay the foundation for a sustainable and competitive offshore wind industry. In return the industry commits to delivering:
- Capital for investments: Ensure the industry scales to meet the de-risked, committed volumes, by investing in projects, industry, manufacturing capacity and people.
- Cost reductions: Bring offshore wind to a better financing position and onto an accelerated cost reduction learning curve, which will reduce the cost of electricity (LCOE) by 30% towards 2040 allowing offshore wind to meaningfully play its role, e.g. through access to lower cost of capital, derisking projects, collaboration on standardisation, and additional industrialisation savings from a project's CAPEX and OPEX improvements across all components and processes, in a competitive environment.
- Community and society value: Deliver long-lasting value to both communities by driving economic activity, lasting investments, and high-quality jobs, not least in coastal communities - and to consumers by reducing their electricity bills. And further help mitigate rising costs of energy, diversify supply and increasing energy security and resilience. Ensuring projects are built on time, with high quality and delivered at a cost basis in line with the project business case.
