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Monday 13 February RNW - NEWS AND ANALYSIS FROM THE NETHERLANDS IN 10 LANGUAGES, WORLDWIDE 24/7 ON RADIO, TV AND ONLINE
Middelgruden offshore wind farm in Denmark
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Delft, Netherlands
Delft, Netherlands

Record-breaking wind farms run on subsidies

Published on : 26 July 2010 - 2:13pm | By Thijs Papôt (Photo: Flickr/United Nations Photo)
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As many offshore wind turbines were connected to the European electricity grid in the first six months of 2010 as in the whole of 2009. The European Wind Energy Association has proudly announced that offshore wind energy appears to be crisis-proof. For the time being, however, the turbines will continue to need subsidies.

The EWEA’s figures are impressive. At the moment, there are 43 fully operational offshore wind farms in Europe. Nearly 1,000 wind turbines are in place, producing just under 2,400 megawatts, enough to power 2.5 million homes. And five times as much power is generated by onshore wind farms.
 
These impressive figures, however, fail to win over everyone. Dutch conservatives from the VVD party say wind turbines at the moment “don’t run on wind, but on subsidies”. VVD MP Helma Nepperus:
 
“I can understand people wanting to give it a go. But what we in the VVD question are all those subsidies. Up to now, they have mostly been driven by those subsidies. You may be able to develop it, I’m ready to believe that. If people want to invest in it, fine. But you have to ask yourself whether so much government money should be put into it. It’s still not very efficient and that cash could go to other things.”
 
She has a point. Electricity produced by offshore wind energy, at around 16 eurocents per kilowatt-hour, is nearly three times as expensive as ‘ordinary’ power which costs about 6 cents. Onshore wind power comes in at 8 cents per kilowatt-hour. This is better but it still needs to be subsidised. Despite this, Delft University of Technology’s Michiel Zaaijer still argues in favour of the subsidies. He says offshore wind electricity is expected to be competitive within a decade:
 
“The subsidies are designed to allow developers to master the technique of constructing offshore wind parks. Eventually, of course, it will contribute to clean sustainable energy which will mean you’re not reliant on oil and gas and the like. These have to be imported from abroad and will eventually run out.”
 
Economic importance
EWEA policy director Justin Wilkes is keen to stress the economic importance of offshore wind energy, arguing that it remains “a major growth industry despite the economic crisis”. He also deftly points to the jobs that it produces. However, he swiftly adds that this fledgling industry is still being hampered by lack of finance: “Major energy companies can use their reserves to make the investments needed but the possibilities for independent developers are seriously limited”.
 
Because of this, Mr Wilkes is calling for an even greater role to be played by the European Investment Bank: “The EIB has helped with a number of projects and its support should be broadened.”
 
No choice
Mr Zaaijer maintains that we have no choice. Europe will have to continue paying till at least 2020 if we want to have clean and affordable sea-based wind energy after that date:
 
“Without subsidies, companies will not be able to bridge the gap between their costs and profits. The amounts are too great. The subsidies are necessary because it is impossible to realise cost reductions without first gaining production experience and raising production volume.”
 
In short, offshore wind energy is an attractive proposition but, at least for the next decade, it will probably be true to say that: wind turbines run on subsidies.

 

Windparken

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