What is the potential for offshore wind in the Baltic Sea? Simon Göss summarises the panel discussion that brought together Marcin Nowacki (President of the European Enterprise Alliance), Dariusz Lociński (President of the Management Board, PGE Baltica), Pierre Tardieu (Chief Policy Officer at Wind Europe), Ricardo Williams (Policy Officer for Infrastructure and Regional Cooperation at DG ENER, EC) and Pernille Weiss (MEP and ITRE committee member). The challenges that need to be met include the creation of a stable regulatory environment, building the supporting harbour infrastructure, regional cooperation and frameworks, shortening the permitting process, overcoming supply-chain constraints, integration and interconnections. Offshore projects are complex and can take 5-10 years to complete, but the REPowerEU package can help reduce this time by about one third. The rewards for success will be worth it: offshore wind has the potential to provide one third of the entire electricity consumption of the Baltic Sea countries. More than that, the Baltic region can become an offshore centre of excellence, creating local jobs and offering their services around Europe and the world. It will also contribute to the EU’s offshore capacity targets of 60 GW by 2030 and 300 GW by 2050, and provide much needed energy security. [Promoted by ZPP Poland]

During the Energy for Europe Conference held at the end of October 2022 experts, professionals and policymakers discussed the offshore wind energy industry and its potential in the Baltic Sea. The panel consisted of:

• Marcin Nowacki, President of the European Enterprise Alliance
• Dariusz Lociński, President of the Management Board, PGE Baltica
• Pierre Tardieu, Chief Policy Officer at Wind Europe
• Ricardo Renedo Williams, Policy Officer for Infrastructure and Regional Cooperation at the Directorate-General for Energy (DG ENER), European Commission
• Pernille Weiss, Member of the European Parliament and ITRE committee member (opening statement via a video intervention)
• Matthew James, Publisher, Energy Post (Moderator)

The topics of the panel revolved around different important issues for the offshore wind industry in and around the Baltic Sea, including the industry’s growth, European local content in offshore wind farms, port facilities and shipping fleets. Also, the specifics of offshore wind in the Baltic Sea were part of this interesting debate.

Pernille Weiss: 60 GW by 2030, 300 GW by 2050

Pernille Weiss, MEP, started her video intervention with the remark that the “key to success is to speed up the production of renewable energy”. The offshore capacity targets for the EU are 60 GW by 2030 and 300 GW by 2050.

To achieve this five-fold increase within the next 8 years, legislation needs to address existing challenges to expand offshore wind. Permitting procedures will be strengthened and streamlined and the REPowerEU package provides important impetus in that regard. Also, other infrastructures and system integration measures are supported by the European Parliament. Last but not least, supply chain issues already existed ahead of the war in Ukraine. That makes it ever more important to strengthen the industrial base in the EU. All in all, offshore wind can play a key role as a viable energy source needed for a sustainable energy system.

Dariusz Lociński: stable regulations, harbour infrastructure

To start off the panel discussion, Dariusz Lociński from PGE Baltica as the developer of Polish offshore wind explained the company’s offshore strategy. Not only PGE Group, but Poland’s offshore wind industry in general, needs a predictable regulatory environment for those long-term offshore projects, especially to attract investors. The development of offshore wind by PGE goes in two phases, the first one with a capacity of 2.5 GW by 2030, up to the minimum of 6.5 GW of installed offshore wind turbines by 2040. These are huge projects for the company and the country, Lociński stressed.

Especially important will be the harbour infrastructure to provide for installation and necessary services for the expansion. Local ports in Poland as well as in other countries of the Baltic region have to be invested in. This can create local income and employment as well as create increased regional cooperation with other Baltic Sea countries that will also be using those harbours for their offshore projects. PGE itself is in the process of investing in harbours to make them “offshore-ready”.

Ricardo Williams: more regional and cross-country frameworks

Ricardo Williams from the EU Commission presented his views on the necessary regulatory priorities that can simplify offshore projects and get them off the ground. Even though regulatory frameworks can never be perfect, the problems currently lie in the implementation of the currently planned offshore wind projects. Offshore projects are complex and project implementation can take 5-10 years, but provisions in the REPowerEU package can help to reduce this time by about one third.

From his point of view, the traditional national framework of offshore wind development needs to make way for a more regional and cross-country approach, including joint offshore and hydrogen energy islands and grid interconnections. “More regional cooperation is absolutely key and that goes for all of the levels from high-level policy to local manufacturing, utilities and TSOs”, Williams stated.

Marcin Nowacki: offshore pioneers, new demand-driven growth

For Marcin Nowacki representing industrial companies, the implications for getting offshore wind right are huge. For him there a three main dimensions to the current developments. Firstly, he is glad to see Polish companies enter the offshore wind sector and build knowledge and capacity in the field. While this happens through joint ventures in the beginning, he hopes that companies from the Baltic Sea region can also provide services to other offshore basins in the EU or even worldwide.

The other dimension is the high energy demand from the strong industrial base in Poland with companies from the construction, paper, automotive and food processing industries. “The industry needs and expects green energy, and offshore wind energy provides that”, said Nowacki who echoes the views of industrial players on reliable energy sources.

Finally, SMEs can also play a crucial role in developing an entire offshore industrial ecosystem. Even though the industry is characterised by strong concentration on the supply side, companies from Poland and other Baltic Sea countries want to play a part here. In a nutshell, offshore wind development is a big movement forward for the region in terms of energy supply and new business opportunities.

Pierre Tardieu: supply chain constraints, harbour infrastructure

“Offshore wind has to grow quickly, even exponentially”, as Pierre Tardieu from Wind Europe explains. Therefore, it is great news that Polish businesses want to get involved. The EU targets necessitate capacity additions to increase from 3 GW/year currently to 7 GW/year in 2025 and even 20 GW/year afterwards. So, “the pie is getting bigger fast”.

The heads of government in the Baltic Sea region agreed on the development of 20 GW of offshore wind by 2030, according to Tardieu. It is not so much technology or finance that represent barriers for the offshore industry, as even 15 MW turbines will be produced in Poland from 2024 onwards, but the logistics to get the expansion on track. The supply chain is compromised especially on the side of installation vessels and offshore foundations. The investment in offshore wind harbours is crucial and about €9.5bn needs to be invested in EU port infrastructure to enable the offshore projects to be implemented in time.

Permitting time frames, energy security

Relevant to all the panellists have been the proposed shortening of permitting time frames to an estimated maximum of two years that come with the REPowerEU package, as well as the importance of offshore wind and local electricity generation as part of a wider energy security strategy. Especially in the wake of the war in the Ukraine, a reliable source of electricity generation from the Baltic Sea can help industries and the countries around the area. “Offshore wind is the sector that can really change our energy mix” said Lociński.

Offshore Wind integration, interconnections

The integration of offshore wind into the electricity system along with the EU interconnection has been a point of debate as well. Especially relevant for system integration in Poland is the use of electricity from offshore wind turbines for a more electrified heating system made up of electric boilers and heat pumps in the future. There are still issues with the costs of long-term storage, but in time hydrogen might play a bigger role there. The priority, however, is to use the electricity directly in the system itself, according to PGE.

From Williams’ and the EU Commission’s perspective, the Green Deal must be accelerated and only in combination with energy saving and efficiency, electrification, and hydrogen production through offshore wind can the climate goals of the EU become reality. The pan-European view of grid infrastructures and the better EU-wide electricity system integration will make the entire system more efficient and thus cheaper, as Nowacki and Tardieu agreed.

Especially as the offshore grid still needs to be largely build, hybrid wind offshore projects that combine generation of electricity and grid interconnections across the North Sea and the Baltic Sea will enable this integration. About one third to half of all new offshore windfarms are expected to be such hybrid systems. The panellists agreed that this along with creating service, construction, and industrial capacity in the offshore wind sector at the local level in the Baltic Region can increase EU wide cooperation.

An important point concerning communication around renewable expansion was raised from the audience: make data on renewable and offshore wind expansion accessible to the public as well, so that the impact of these developments can be appreciated and understood. The panellists directly followed up with the overall ambition: offshore wind energy in the Baltic Sea has the potential to provide one third of the entire electricity consumption of the Baltic Sea countries and PGE’s offshore wind farms currently under development translate into the provision of electricity for 5.4 million Polish households.

Summary

To sum up the insights of the panel: offshore wind in the Baltic Sea has great potential for electricity generation and energy security as well as for enabling local businesses to open new markets. Local supply chains, especially with regards to harbour and vessel availability, need to be addressed. The REPowerEU package clearly assists in reducing permitting time frames and helps to accelerate the necessary expansion of offshore wind energy. System integration gains most from cross-regional and European interconnection and collaboration. Energy supply in the region will increasingly be shaped by the local and shared resource of wind on the waters connecting all the Baltic Sea countries.

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Summary for Energy Post by Simon Göss, co-founder of cr.hub