EMEA

“Massive Potential” for European Wind in 2024

Up to 40GW of offshore wind could be auctioned this year as investors heighten focus to transform energy systems for the better. 

Investment in new wind farms will accelerate in 2024, but is projected to fall short of levels required to reach 2030 climate and energy security targets. 

WindEurope data showed the EU built 17 gigawatts (GW) of new wind farms in 2023 – 14GW onshore and 3GW offshore – while the International Energy Agency estimates Europe will create 23GW in new wind per year between 2024-28. 

“Wind energy’s integral contribution to Europe’s energy mix is already evident,” Alex Brierley, Co-head of Octopus Energy Generation’s fund management team, told ESG Investor. “There’s massive potential for it to play an even bigger role in the years to come as we rapidly speed up investments on the path to net zero.”  

Renewables generated 44% of electricity produced in the EU last year with wind accounting for 19%. Germany built the most new wind capacity, followed by the Netherlands and Sweden. 

Chris Rosslowe, Senior Energy and Climate Data Analyst at global energy think tank Ember Climate, said new wind investments are “rapidly picking up after an abysmal low in 2022”. 

But he added that “2024 will again likely fall well short of the 30GW+ annual installations required, deferring even more deployment to the second half of the decade if targets are to be reached.”  

At COP28, the EU spearheaded the pledge to triple global installed renewable energy capacity globally by 2030, which was eventually signed by 123 countries, and included as an action in the Global Stocktake. Ember has argued this increases the pressure on the EU to deliver on its own renewable energy targets. 

“[This year] will be a lot more interesting in terms of how the future pipeline develops, and to what extent the conditions for the European industry are improved”, Rosslowe said. 

But he warned that growth could be stunted by the pervasive issue of grid connection, stressing that governments “need to recognise the critical role of grids in the energy transition”. 

“Big year” for offshore 

The UK has 14.5GW of wind installed onshore and 13.9GW offshore in total and its offshore wind pipeline was nearing 100GW at the end of the last year. However, most of the rest of Europe’s installed capacity is heavily slanted towards onshore.  

In 2022, 16% of EU electricity demand was provided by wind, with 14% being onshore and 2% offshore, according to data from WWF EU. Last year saw a record 4.2GW of new offshore wind farms built in Europe, up 40% on 2022.  

The EU saw 3GW of that installed in 2023, but only has 16GW installed in total, falling far short of its pledge to install 116GW of offshore wind by 2030. European offshore wind investments reached a record €30 billion (US$32.3 billion) across eight wind farms covering 9GW last year. 

WindEurope said 2024 is “set to be a big year for offshore wind auctions”, with at least 40GW set be auctioned if all countries run their planned auctions. Europe auctioned 13.5GW of new offshore wind capacity last year. 

Alongside the UK, Germany, France, the Netherlands and Denmark are projected to be the top five countries auctioning capacity over the next two years.  

Octopus’ generation arm manages more than US$3.37 billion in wind assets and last July it unveiled plans to invest US$20 billion in offshore wind by 2030 to go towards the generation of 12GW of renewable electricity a year. 

In November, this was followed by the unveiling its first ever offshore wind fund which intends to invest £3 billion (US$3.73 billion) in offshore wind globally by 2030. 

Last year Octopus took stakes in offshore wind farms in the UK, Germany, and the Netherlands, and backed developers creating new offshore wind projects in Norway and Sweden.  

“Offshore wind will transform the energy systems of many countries for the better – and we’re geared up to scale this technology in many markets,” Brierley said.  

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

Copyright © 2024 ESG Investor Ltd. Company No. 12893343. ESG Investor Ltd, Fox Court, 14 Grays Inn Road, London, WC1X 8HN

To Top
Share via
Copy link
Powered by Social Snap