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Giles Dickson evaluated the busy agenda for Wind Energy: ‘Made in Europe’ should include Turkey

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7 months ago

4 October 2023

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Countries are accelerating their transition to renewable energy. Europe and the United States, which have been suffering from energy dependence on Russia, are creating a more controlled supply chain in renewable energy by enacting important laws for green energy. Turkey, which has left behind important thresholds in wind energy, is leaving behind another important milestone by announcing candidate sites for offshore wind energy. Speaking exclusively to Wind Energy Magazine, WindEurope CEO Giles Dickson emphasized that if Europe does not grow its own wind supply chain in a timely manner, other countries will be ready to take advantage of today’s bottle necks and said, “The term ‘Made in Europe’ should clearly include Turkey.” Making an important assessment of Turkey’s steps in offshore wind, Dickson warns, “Turkey should not make the same mistake that Europe has made.”

Giles Dickson, CEO of WindEurope, one of the organizations that shape wind energy on a global scale, evaluates the sector’s busy agenda for Wind Energy Magazine.

This year, you are collaborating with TÜREB at the Turkish Wind Energy Con- gress (TÜREK). Could you comment on the interaction targeted with TÜREK 2023, which will bring together European turbine and component manufacturers and Turkish suppliers of the wind energy sector? Will such collaborations continue?

The success of Turkey’s wind industry is rooted in its continuously expanding, strong domestic supply chain. Many European and international companies have set up production facilities in Turkey. The wind sector employs around 25,000 people today. So far, all 12 GW of wind energy installed in Turkey are onshore. But the Turkish offshore wind industry is shaping up. The recently founded Turkish Offshore Wind Association joined WindEurope to draw lessons from Europe’s offshore wind success story. The Turkish Wind Energy Congress on 7-8 November 2023 in Istanbul will be a great opportunity to exchange and learn about this coming expansion of onshore and offshore wind energy in Turkey. The confirmed speakers and the conference programme promise a brilliant event.

WindEurope has been working very productively with the Turkish Wind Energy Association TÜREB for many years. Among other things, we hosted the 2023 WindEurope CEOs retreat, an exclusive meeting of influential European wind energy leaders, in Istanbul earlier this year. We hope to be work- ing hand in hand on many more projects.

What do you think about the 5 GW offshore target announced in the National Energy Plan, which includes Turkey’s targets until 2035? What needs to be done to achieve this target?

Turkey has rapidly developed into a leading market for onshore wind energy. Now is the time to take the next step by tapping into off- shore wind. Turkey’s excellent wind speeds at sea offer ideal conditions. The 5 GW offshore wind target in the National Energy Plan is a good starting point and significant improvements have been made to enable offshore wind development.

Turkey must now allocate areas for wind through Maritime Spatial Plans. Then the Government can start to set auction time tables to determine the frequency, volumes, evaluation criteria of offshore wind auctions. These auctions must be combined with remuneration mechanisms that stabilise revenues.

The experience from Europe shows that the Contract-for-Difference model is the best model to support offshore wind development. It keeps the financing costs for new wind farms low. And it is good for taxpayers and Governments. Governments don’t only pay to offshore wind farm developers, they also get paid back when electricity prices are high. Turkey should not make the same mistake other European countries are doing now and introduce negative bidding for offshore wind or seabed leasing. These payments are bad for offshore wind developers. They make offshore wind more expensive. And ultimately these extra costs have to be passed on to either the supply chain or the elecricity consumers which leaves everyone worse off.

In addition to a firm auction schedule off- shore wind also requires investments in ports and grids. Timely and reliable grid connections for offshore wind farms must be a top priority. There is no point in building turbines if the electricity cannot be delivered to shore. Turkey must also invest in port infrastructure, offshore wind vessels and the industrialisation of the wider supply chain. This might sound like spending a lot of money. But it’s a strategic investment that will ensure cheap electricity, lasting economic growth and thousands of new jobs in Turkey’s offshore wind sector. In Europe every new offshore wind turbine contributes €15mn of economic activity to the national GDP.

What do you think about Istanbul as an official candidate for the WindEurope 2026 Annual Event? Could you give us some information about Istanbul’s competitor cities and evaluate the possibility of organizing the event here?

We won’t comment at this point in time.

BloombergNEF announced in a report that there has been a 15% decline in the commissioning of new wind turbines. How is the wind energy sector spending 2023, affected by supply chain and subsidy constraints? What do you predict for the end of this year?

Annual installation figures for wind energy should be compared with caution. There are many reasons why the figures fluctuate slightly from one year to the other. However, the trajectory for onshore wind installation is clearly upward. European governments are committing to building more onshore wind turbines as part of their Energy and Climate Plans. Just as the Turkish government does. Their National Energy Plan for the period until 2030 aims for almost 30 GW of wind energy of which only 5GW should be offshore wind. This means that Turkey will more than double its onshore wind capacity.

What do you think about the US’s Inflation Reduction Act (IRA) with tax breaks and incentives for green energy technologies and the EU’s Green Deal Industrial Plan? How will these developments affect global trade in the green energy sector?

Europe needs to scale up its own cleantech manufacturing. Today the EU cannot produce the wind turbines, heat pumps and electrolysers it needs to reach its 2030 energy and climate targets. In February 2023 the EU tabled its answer to the IRA: the Green Deal Industrial Plan. It includes the Net-Zero Industry Act (NZIA) which aims to increase the EU’s overall strategic clean tech manufacturing capacity to at least 40% by 2030. But as it stands, NZIA falls short. It is too weak on financing. The EU needs to put money on the table that will help scale up the supply chain and not just fund innovation. National governments need to max out on the new flexibility they have in the EU state aid rules to support investments in new factories.

If Europe does not scale up its own wind supply chain in time, other countries will stand ready to benefit from today’s bottlenecks. China is already competing with European turbine manufacturers on 3rd country markets. They are now aggressively pushing onto the European market as well. The EU’s Net-Zero Industry Act must ensure the Green Deal continues to be “made in Europe” and “made in Europe” explicitly includes Turkey.

The EU’s green energy targets play an important role in the wind energy sector. What do you expect for the wind energy sector under the EU’s new energy strategy?

The European Green Deal is Europe’s overarching vision. But it was the Russian invasion of Ukraine and Russia’s gas blackmailing that have proven to European policymakers that only domestic energy sources like wind and solar truly guarantee energy security. In its new REPowerEU strategy the European Union, therefore, increased the expansion targets for wind to reduce its overdependence on Russian gas imports.

The EU wants wind to be 50% of Europe’s electricity consumption by 2050, up from 17% today. By then the EU needs to 420 GW of installed wind energy capacity which means it needs to install around 30 GW each year up to 2030. But we are not in line with these targets. In 2022 we only installed half of what’s needed to reach Europe’s energy and climate targets. Investments and new turbine orders were also down.

Governments and the EU must now spell out actions to accelerate wind energy deployment. But Europe needs to expand its offshore wind supply chain to support this big ram-pup. As things stand, we don’t have enough factories to produce all the equipment we will need to deliver the 2030 targets. The necessary investments in factories, workforce and infrastructure are not happening fast enough. There are already bottlenecks in the production of foundations for offshore wind turbines and in the availability of installation vessels. New turbine and cable factories are needed too. Plus €9bn of investments in port infrastructure. And major investments in new grid connections.

Offshore wind energy is experiencing significant growth, driven by technological advances. Could you share your predictions for the future of offshore wind energy by giving information about your work in this field as Windeurope?

In the first half of 2023 Europe installed 3 GW of new offshore wind turbines. That’s not bad. But we need to come close to annual installation rates of 20 GW by the end of the decade. Under current market conditions and without further support Europe’s supply chain could only deliver half of that. First bottlenecks can already be seen for the manufacturing of offshore foundation, installation vessels and offshore array cables not to speak of the thousands of additional workers that we will have to find and train.

But there are also many reasons for optimism. With its reliable capacity factors and high electricity output wind energy is the best suited energy source to achieve a complete transformation of our energy system. Thanks to the Maritime Spacial Plans we have allocated almost 52,000 Km for offshore wind development. This is enough to deliver the 2030 targets. Our technologies are performing better than ever. The right means to optimize our supply chain, for instance, AI decision making to enable better logistics and vessel sharing. And we are looking at new grid integration methods such as energy islands or hybrid offshore wind farms. They can deliver electricity to more than one country and are the building block for Europe’s future offshore wind grid – a grid that will be meshed and interconnected to optime space use and energy flows.

How are problems planned to be overcome in offshore wind energy, which brings many challenges such as financing projects, technical difficulties, submarine cabling and transmission costs?

Currently the main problem is the business case. The European offshore wind industry is facing significant cost pressures. After the Russian invasion of Ukraine and because of inflation and surging input costs, the price of producing offshore wind turbines in Europe has gone up by 30-40% over the past 2 years. This might pose short-term challenges to the economics of offshore wind projects. To strengthen Europe’s energy security and deliver on our climate and energy targets, Governments must support these projects now and ensure that they get built. Crucially, Governments must index their renewables auctions to inflation.

Sustainability, environmental protection and social responsibility issues are of great importance in offshore wind energy. As Windeurope, what kind of a strategy do you follow on these issues and what are your practices that will set an example for other companies in the sector?

The European wind industry works actively to protect the local environment where wind farms are built and engage with civil society, public authorities and the scientific community to that end. We do everything possible to prevent, manage and mitigate environmental impacts: through the planning, siting and design of wind farms; and in the way we build and operate them.

Offshore wind farms can actually have a positive impact on their local environment and support biodiversity restoration. They can help restore marine life, through aquaculturea and artificial reefs. Since bottom-trawled fishing is not allowed between the turbines offshore wind farms can increased fish stocks and restore endangered species. WindEurope empathically supported the European Commission’s target of restoring 30% of the EU’s degraded areas with its Nature Restoration Law.

We are actively working with NGOs to find ways of accentuating these positive biodiversity impacts. WindEurope is part of the Offshore Coalition for Energy and Nature (OCEaN), a coalition to accelerate the deployment of offshore wind energy and grid infrastructure while ensuring alignment with nature protection and healthy marine ecosystems. Ørsted has teamed up with WWF Denmark to explore how artificial reefs can help protect endangered oyster species. They’re also working to provide corals a new home in their offshore wind farms. Vattenfall is using artificial boulder reefs to enhance both coastal protection and marine biodiversity. They are also working on sustainable kelp and mussel farming in offshore wind farms. With the Dutch North Seas Foundation the wind industry is also farming oysters in wind farms.