New investment in offshore wind energy in Europe saw a spike of EUR14 billion, the equivalent of US$15.4 billion, in the first half of 2016, although a decline in the industry may be ahead.
According to WindEurope, there were seven projects that reached a final investment decision in the period. Three-quarters of the new investments came from the United Kingdom, which at the same time has been experiencing a serious decline in the solar power segment.
WindEurope CEO Giles Dickson commented: "The record investment numbers show a clear industry commitment to offshore wind. We expect installations will pick up significantly in 2017 but there are a lot of challenges out there still on offshore wind. Not least the uncertainty over future volumes and regulation in many key markets for the period after 2020. We're a long way from being able to say job done on offshore wind." He added that while the costs for offshore wind energy are falling, the industry will still require "healthy volumes in the market" to keep the industry sustained.
Dickson explained that the number of projects currently in the pipeline is not enough, and that the commitment to offshore wind by the member states beyond the year 2020 is short of what the European wind industry needs. He added that while Europe is number one at present, the United States and China are working to expand their investments in the field.
He noted that should the trend continue Europe might lose its competitive position in the market. According to Dickson, Europe currently has 90% of the world's wind capacity. WindEurope's website notes that in June, the energy ministers of nine countries in Europe signed a "Memorandum of Understanding and Work Programme" which would enhance their countries' cooperation in offshore wind development. Eleven energy companies signed a pledge to reduce the cost of offshore wind to below EUR80/MWh by the year 2025.
By Lincoln Brown for Oilprice.com
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