Clarity in Germany Until 2020

German environment minister Peter Altmaier announced yesterday that the German incoming government has agreed explicitly to extend the current Stauchungsmodell  for 2 more years, until 2020.

Following the extension, projects that are grid-connected by the end of 2019 will still be entitled to opt for the compression model. Previously, the deadline for the model was December 31, 2017. The new coalition in Germany has also suggested a capacity target of 6.5GW, and this figure is somewhat lower than the originally announced 10GW in 2020 for offshore wind power.

“I am pleased that the new German government has shown its commitment to the offshore wind industry by bringing more clarity to the near term future. I believe that the capacity targets are still solid. As an industry, we could always wish for more, but it’s a question whether the industry would have had the capacity to achieve the previous target,” said Samuel Leupold, Executive Vice President, Wind Power.

The parties behind the new German government will integrate this explicitly in the coalition treaty and have agreed on a making a formal cabinet’s decision in January.

Framework after 2020
After 2020 the framework for offshore wind is still unclear in several markets, and at the EWEA conference Samuel Leupold told the audience, that visibility was needed, even if it’s more than seven years into the future.

“It’s important that governments in Europe soon produces stable and long-term conditions for investments which are valid after 2020. In wind projects with a lifetime of 30 years, it’s crucial that the conditions for investments are transparent and long-term, so that we have the possibility to develop and mature the technologies, reduce the production costs, and also make a significant contribution to the German energy conversion.”

Cost of Electricity has come down
Along with the renewed German commitment to the offshore wind industry, comes expectations to reduce cost of electricity.

“For almost a year we have been very vocal and clear about our commitment to reduce cost of electricity by 40% in 2020. We were the first to publicly announce the target of reducing cost to 100 Euro per MWh and our estimates show that offshore wind power then will be able to secure its role in the energy mix,” said Samuel Leupold.

DONG Energy’s position has clearly been picked up by the industry and it was repeated throughout the conference by speakers from all corners of the industry.

“That was great to see. As market leaders, we must assume a responsibility when we’re to reduce the cost of electricity from offshore wind turbines. But it’s also vital that the entire industry, the developers, the suppliers and the authorities work together and commit to reduce the costs. If we don’t all deliver on this, it’s almost certain that the industry will continue expanding at a lower rate than we see today,” said Samuel Leupold.

Press release, November 25, 2013; Image: DONG Energy