(Montel) The EU must restore investment signals for wind, including ending price revenue caps, to reach its ambitious renewables targets, energy industry companies urged the bloc’s leaders in a joint statement on Monday.
“It is very worrying that not a single investment decision was taken in any offshore wind farm in Europe in 2022,” said the statement backed by more than 100 companies, representing the whole value chain of offshore wind and renewable hydrogen in Europe.
Investments had been delayed by a 40% rise in input costs in the last two years, while power market interventions in some countries had driven up financing costs, said the companies.
“Restore investment”
“The EU must restore investment signals with its electricity market reform and end revenue caps as planned in June 2023,” they said.
The European Commission proposed targeted reforms in March which would require governments to use bilateral contracts for difference to financially support new renewable or nuclear projects.
It also decided against keeping the temporary emergency cap on low-cost power generators’ market revenues introduced on 1 December.
In their statement today, the companies – including signatories Orsted, Shell, Equinor, Siemens Gamesa, National Grid, Nel and Wind Europe – backed both two-sided contracts for difference (CFDs) and power purchase agreements (PPAs) as effective ways to underpin offshore wind investments.
Auction prices for new wind farm developments should be fully indexed to cover cost inflation, they said.
“We [also] call on governments to resist the temptation to use uncapped negative bidding [in auctions] which come with very high upfront costs,” they said.
Lobby group Wind Europe has previously warned against such negative bidding in the context of Germany’s plans to ramp up its offshore wind output using a two-tier auction system for new developments.
Europe summit
The companies’ statement was prompted by the North Sea Summit in Ostend, Belgium, later today where leaders and ministers from nine European countries and the EC are meeting to discuss ramping up offshore wind.
Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway and the UK want to coordinate and combine their efforts to deploy offshore wind in the North Sea, Atlantic Ocean, Irish Sea and Celtic Sea.
EU lawmakers agreed in principle last month to increase the bloc’s binding 2030 renewable energy target to 42.5% from 32%, with a voluntary goal for an extra 2.5% on top.
Investments had been delayed by a 40% rise in input costs in the last two years, while power market interventions in some countries had driven up financing costs, said the companies.
“Restore investment”
“The EU must restore investment signals with its electricity market reform and end revenue caps as planned in June 2023,” they said.
The European Commission proposed targeted reforms in March which would require governments to use bilateral contracts for difference to financially support new renewable or nuclear projects.
It also decided against keeping the temporary emergency cap on low-cost power generators’ market revenues introduced on 1 December.
In their statement today, the companies – including signatories Orsted, Shell, Equinor, Siemens Gamesa, National Grid, Nel and Wind Europe – backed both two-sided contracts for difference (CFDs) and power purchase agreements (PPAs) as effective ways to underpin offshore wind investments.
Auction prices for new wind farm developments should be fully indexed to cover cost inflation, they said.
“We [also] call on governments to resist the temptation to use uncapped negative bidding [in auctions] which come with very high upfront costs,” they said.
Lobby group Wind Europe has previously warned against such negative bidding in the context of Germany’s plans to ramp up its offshore wind output using a two-tier auction system for new developments.
Europe summit
The companies’ statement was prompted by the North Sea Summit in Ostend, Belgium, later today where leaders and ministers from nine European countries and the EC are meeting to discuss ramping up offshore wind.
Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway and the UK want to coordinate and combine their efforts to deploy offshore wind in the North Sea, Atlantic Ocean, Irish Sea and Celtic Sea.
EU lawmakers agreed in principle last month to increase the bloc’s binding 2030 renewable energy target to 42.5% from 32%, with a voluntary goal for an extra 2.5% on top.
