Commission’s Wind Power Action Plan targets improved auction system, easing of permitting constraints to accelerate projects.
Industry experts have welcomed the European Commission’s Wind Power Action Plan, claiming it will raise the pace of offshore and onshore wind instillation to meet EU renewable energy targets.
The plan is intended to ease permitting constraints to accelerate projects, improve auction systems, and encourage member states and industry to adopt an EU Wind Charter, which will build on existing policies and legislation.
Earlier this year, the European Parliament and Council increased a binding target for the share of renewables in the energy mix from 32% to at least 42.5% by 2030, with offshore and onshore wind vital to achieving this goal.
The Commission noted this will require a “massive increase” in installed wind capacity, which is expected to grow from 204 gigawatts (GW) in 2022 to more than 500GW in 2030.
Maroš Šefčovič, Executive Vice-President of the Commission, described the wind sector as an “important growth and job creator” for Europe, contributing an estimated €36-42 billion (US$37.9-44.3 billion) to the EU’s GDP and providing 300,000 “high quality” jobs.
However, he noted there were “serious challenges” due to insufficient and uncertain demand, slow and complex permitting, lack of access to raw materials, high inflation and commodity prices, increased pressure from international competitors, and questions over the availability of a skilled workforce.
Giles Dickson, CEO at wind energy trade association WindEurope, called the plan a “game changer” for Europe’s wind energy industry that is “good for jobs and growth”, as well as energy security.
Arnaud Van Dooren, Climate and Energy Policy Officer at WWF Europe, described the plan as “ambitious”.
“The Commission had to come up with a plan, and did. Now we need good implementation,” he told ESG Investor. “Hopefully these actions will help deliver on the ground at project level.”
Last year, 16% of EU electricity demand was provided by wind, with 14% being onshore and just 2% offshore. In 2022, 87% of new wind installations in Europe were onshore, with Germany, Sweden, and Finland building the lion’s share of new projects.
The Commission proposes to enshrine support for the plan in a dedicated Wind Energy Charter to be signed by the end of the year.
Not all observers were convinced the plan would prove sufficient. Tancrede Fulop, Senior Equity Analyst at Morningstar, said that beyond the financial support in the plan the other measures, including accelerating permitting, improving the auctions design, looked like a “catalogue of best practices”.
“We are sceptical that the plan will bridge the gap to the European Union’s 2030 renewable energy target,” he added.
Auctions, skills and investment
The Commission has moved to improve auction design in the plan by building on the proposed Net-Zero Industry Act, also approved this week, and the reform of the Electricity Market Design to create “well-designed and objective” criteria that “reward higher value-added equipment” and ensure that projects are “realised fully and on time”.
It also aims to speed up investment and financing for wind energy manufacturing in Europe. The Commission will facilitate access to EU financing, notably through the EU Innovation Fund. The European Investment Bank will also make de-risking guarantees available.
The plan proposes to double the money available for clean manufacturing via the Innovation Fund to €1.4 billion.
Fulop said that the plan’s financial support measures are “welcome against a backdrop of rising interest rates”, noting that wind turbine manufacturers had been “plagued by material operating losses”.
However, Van Dooren said WWF EU “regrets” for auction design there is no mention of mandatory biodiversity criteria included in non-price criteria.
He added that terms of skills, there is “no mention” of potential reskilling of workers working in declining industries, including fossil fuels, instead focusing on the launch of European net-zero industry skills academies which includes one dedicated to the wind sector.
A key facet of the plan is accelerating the deployment of new offshore and onshore wind farms through “increased predictability” and faster permitting.
In some member states, the entire permit-granting process for large renewable energy projects can take up to nine years, with approximately 80GW of wind power capacity currently stuck in permitting procedures across Europe, of which at least 59GW are onshore.
To address this, the Commission has launched the ‘Accele-RES’ initiative to “ensure swift implementation” of the revised EU renewable energy rules. This will put more focus on the digitalisation of permitting processes and technical assistance to member states.
It has also encouraged member states to enhance the visibility of the project pipeline through wind pledges, transparent auction schedules, and long-term planning.
Currently permitting is largely paper based, but digital processes are expected will alsoto enable permitting authorities to work on more files at once, potentially and have the potential to significantly shortening the duration of the permitting processes.
The European wind industry is also currently working on an online digital permitting tool, which is being pilot tested by local permitting authorities in Denmark and Poland.
Galvanising grid connection
The Commission is also set to support the necessary build-out of electricity grids with the introduction of a Grids Action Plan which is due to be unveiled in November.
The IEA’s recent Electricity Grids and Secure Energy Transitions report called on policymakers to play a central role in creating an “enabling framework” to accelerate grid connections for renewable projects, including offshore and onshore wind. According to the report, annual investment in grids has remained “broadly stagnant” and needs to double to more than US$600 billion a year by 2030.
Chris Rosslowe, Senior Energy and Climate Data Analyst at global energy think tank Ember Climate, previously told ESG Investor that that grid connection is second only to permitting in terms of challenges facing the wind industry.