WAB e.V. welcomes the expansion targets for offshore wind in Germany provided for in the first draft of the amendment to the Offshore Wind Energy Act (WindSeeG). According to the draft act, offshore wind capacity could reach more than 40GW and help shift the country’s electricity supply to renewable energies by 2035.
The long-term target of at least 70GW is particularly important to leverage the value creation potential. From the perspective of the offshore wind supply chain, the quality criteria are of high importance for both envisaged tendering models – to make offshore expansion an economic and employment driver.
Offshore wind energy has been delivering high electricity yields for years and has reduced its costs enormously. In order not to counteract this development, the market design should enable a sustainable economic development of the necessary supply industry. This would enable the value chain to continue the expansion at sea in a sustainable manner, to use the reliability and system efficiency of the power plants at sea and to leverage value creation potentials. The development of the maritime industries and the market ramp-up of the hydrogen economy are also of great importance in this regard.
The cost-cutting character of the auction models envisaged in the draft law poses a major challenge for a sustainable development of the supplier industry, as it is not flanked by a "sector deal", industrial planning, or other local content requirements as in many other countries. However, there are market participants in Europe who benefit from such rules in their home markets. The Sector Deal in the UK was recently followed by Poland and France with their own Local Content Agreements, which provide for a quota of up to 50 per cent for the value-added share of domestic companies.
From the perspective of the experienced and innovative German supplier industry, these rules distort a free market in Europe and worldwide. To compensate for this imbalance, qualitative tendering criteria, which play a role alongside price in the allocation of areas in the North and Baltic Seas, are suitable instruments – in addition to long-term predictability of the expansion pipeline. This is the only way to continue to ensure cost-efficient expansion and to implement the targets for 2030 and beyond.
The rules for repowering should also allow older offshore wind farms to upgrade to more modern technology to enable the highest possible energy yield in a limited space.
There is currently also no regulatory framework for "green" hydrogen. This makes immediate investment decisions difficult. For a rapid market ramp-up, the systematics of the H2Global programme for the import of "green" hydrogen should also be applied for a "sprinter programme" in Germany. The necessary means for a fast market ramp-up by means of a centrally pre-investigated CfD framework should be urgently considered, as WAB e.V. has already asked for together with other stakeholders in the appeal "H2Global4Europe".
