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German Wind Industry Leaders: Why Energiewende Works, And Offshore Is Growing Up

A panel of German wind energy experts gathered in Hamburg this week for a preview of this fall's WindEnergy expo being held here, discussing everything from the debate over Energiewende policy to promising markets for offshore wind.

Chancellor Merkel's ambitious plan is for renewable energies including wind and sun to make up 40-45 percent of Germany's energy mix by 2025, 55-60 percent by 2035, and as much as 80 percent by 2050 — compared to just under a quarter of the nation's energy mix today. While seeking to eliminate nuclear from the mix, it's also put a sizeable dent in fossil-fuel energy and subsequently traditional utilities' business models. The Energiewende policy push has been met with stiff resistance, though a friendlier government coalition that took office in December is expected to ease some of the gridlock. Last month Merkel eased proposed cuts in wind energy aid, from exclusions for "repowering" of older turbines to reducing subsidy cuts for lower-speed wind turbines and new offshore wind farms.

View from the Nord Event Panoramadeck at Emporio in Hamburg, site of the WindEnergy Hamburg press conference.  

Allowing conflict over the Energiewende to make headlines has been "the wrong introduction we give, not only for Germany but for Europe," Albers said, adding the similar debate over proposed adjustments to the EEG "is in too much emotion right now." What's most important to realize about the Energiewende is that more than 85 percent of Germans want it, asserted Hermann Albers, president of the German Wind Energy Association. And wind energy is a core technology for the success of the [Energiewende] transformation," summed up Leopold Greipl, managing director of VDMA's wind industry division. Added Albers: "we can produce wind [energy] for less than nine [Euro-]cents" for onshore wind, while the retail electricity rate is nearly 30 euro-cent. "We can work in this difference."

Albers also connected the Energiewende goals to the need for "binding, ambitious climate targets." The crisis in Russia and Ukraine, from where the country gets a third of its natural gas and oil needs, "makes clear how great the chance is to make a new EU energy policy," he said, and illustrates the need to reduce reliance on those imports and instead spend the money within Germany's economy.

Several of the panelists urged that Germany broadly needs not only to embrace but more strongly promote its renewable energy leadership to a global audience. Albers cited a recent study tallying Germany's massive investments in wind energy: €35 million and 160,000 employees. By 2020 Germany's entire renewable energy workforce could top 500,000, not so far from its car industry (750,000). In fact a number of suppliers from the car industry are coming into the wind industry supply chain, he noted.

Balancing Standardization and Consolidation

Shifting to a discussion of wind energy trends, panelists emphasized how costs are being reduced and must continue to do so over time: from the usual themes of bigger turbines, longer rotors and taller towers to more specialized advancements such as new foundations (Volker Malmen, managing director of Dong Energy Germany, invoked the "suction bucket" technology), de-icing, lubrication, and better monitoring systems. Malmen also urged standardization across the supply chain, from foundations to turbines to logistics. All agreed that consolidation will continue, particularly in offshore wind, to blend key competencies and help bring ideas forward — but ultimately there must be a balance with enough wind industry competition to move the technology forward and costs down, while "in a reasonable size" so that standardization also can be emphasized and achieved.

Referencing repowering of older turbines in the field, Aufderheide explained his first wind farm built in 1992 north of Hamburg was 11 turbines totaling 500 kW and 40 million kWh annually; these were de-installed two years ago in favor of four 3-MW turbines which produce 20 percent more power annually. "That's what we have to do, as an example to bring down the costs of wind energy," he said. (For those older turbines, he cited market interest from some regional emerging markets such as Poland and Bulgaria.)

Offshore Wind In the Spotlight

Offshore wind themes and exhibitors will represent roughly 40 percent of the WindEnergy show this fall from turbine suppliers to shipyards, illustrating that sector's growing role in Germany and at representing roughly 40 percent of exhibitors will represent that sector, noted Aufderheide. Given Germany's ambitious Energiewende goals for renewable energy reliance, offshore wind will be needed to help achieve Germany's projected future energy usage demands, while also balancing the power industry and adding value, Malmen said.

 

At AWEA Windpower 2014 in early May, Jennifer Runyon chatted with Jens Eckhoff of the Offshore Wind Foundation in Germany about what's happening in that market right now.

While onshore wind is on a 4-5 percent growth pace, offshore growth is 18-20 percent, indicated Andreas Nauen, CEO of Senvion (formerly REpower, now owned by Suzlon) and chair of VDMA's wind industry division. Malmen believes offshore costs will be reduced by 35-40 percent by 2020, largely due to aforementioned standardization efforts through the value chain.

Neglecting to tap into North Sea conditions for offshore wind energy is "like Saudi not exporting oil," quipped Nauen.

Asked which international market are "the most interesting" for wind energy, Nauen put Germany on top, while the U.S. "will continue to be the biggest wind turbine market outside of China." Beyond that other promising markets are globally dispersed, from elsewhere in Europe (France, the U.K, Denmark, Netherlands, Belgium) to Canada and Australia, India, and Korea — many around 500 MW to 1 GW each but collectively adding up to viable business opportunities. Senvion, he said, "can't rely on Germany, onshore or off," and "we can't [target] single countries to make our future and progress," he urged. That includes, he added, pursuing business "probably for the first time even in Denmark," a traditional stronghold for his company's competitors.

Nauen also said he expects final investment decisions on what he called "the next offshore wind park" — apparently a reference to RWE's 332-MW Nordsee project — within the next financial year. In the meantime the company's Bremerhafen factory will make blades for both offshore and onshore orders, as the company does for nacelles. "We have to spread opportunities and harvest wherever turbines are best suited."

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