European citizens and businesses want reliable, affordable and clean energy. They want stable supplies. They’d like their energy to be as green and sourced as locally as possible. And they don’t want to have to pay too much for it.
Governments want to help deliver this for their citizens and businesses. It will boost industrial competitiveness, attract investments, maximise disposable income, reduce import bills and ensure the long-term sustainability of the economy. It’s central to prosperity.
Wind energy can make a major contribution to all of this. Onshore wind is already the cheapest form of new power generation. Offshore wind is not far behind: its costs have fallen by over fifty per cent in the last few years alone. Once built, wind farms provide nearly zero-marginal cost energy and help minimise power bills.
Wind is an increasingly stable form of power supply. New onshore wind farms now operate at up to 35% capacity and new offshore wind farms on average at nearly 50%.
Advances in technology are making energy systems with large shares of wind energy easier to manage. Wind turbines are increasingly flexible: able to operate at lower wind speeds and to be more aligned with demand. They can also help control frequency and voltage in the grid.
Digitalisation is optimising the output of wind energy and improving the design of turbines and wind farms. It’s making it easier to maintain equipment and extend its lifetime.
Wind is a local energy resource contributing to security of supply. It reduces Europe’s fossil fuel imports (by €10bn pa) and exposure to volatile fossil prices.
Wind energy is zero-carbon. It is produced sustainably and consumes negligible amounts of water. The sector is constantly seeking to improve materials used, leverage recycling opportunities and limit biodiversity impacts. It is committed to engaging with communities and happy coexistence with other economic sectors e.g. by exploring use of offshore wind farms for activities such as aquaculture, fishing.
Wind gives Europeans wider social and economic benefits
Wind energy is a key part of Europe’s industrial base. The business of producing, installing and operating wind turbines supports over 260,000 quality high-skilled jobs and generates €60bn pa turnover. The European wind industry exports €8bn pa in technology and services. Half of all the wind power installed globally comes from turbines made by European companies.
With its genuinely European supply chain and local benefits wind is the technology of choice for a just energy transition.
Components are manufactured all over Europe including in economically deprived regions and in places with little wind energy of their own.
Wind farms bring direct economic benefits to the places where they’re located, which are often rural communities. They provide needed jobs and investments in local communities. Collective ownership models help share revenues locally and give citizens a stake in their energy supply.
Wind energy allows commercial and industrial consumers to contribute to the energy transition while locking in their energy costs at affordable levels. The growth of corporate renewable PPAs illustrates this. Companies in ICT, aluminium, chemicals, steel and automotive are now sourcing power directly from wind farms on long-term supply agreements.
Wind can be the cornerstone of Europe’s energy system
Wind now meets 14% of the EU’s power demand on average and much more in many countries: Denmark 41%; Ireland 28%; Portugal 24%; Germany 21%; Spain 19%.
Europe is committed to the decarbonisation of transport, heating and industry; our modelling shows this requires increasing the electrification of primary energy from today’s 24% to 60% by 2050 to achieve a Paris-compatible outcome.
Wind will be the key delivering technology. The IEA expects wind to become the no. 1 source of power in Europe by 2027. The EU Commission thinks it could meet more than half of Europe’s power demand by 2050.
But this will require (a) progress on the electrification of industry, buildings and transport; (b) implementing the right policies; (c) further transformation of the energy system; and (d) technology development. It also requires significant investment in the repowering and lifetime extension of existing wind farms. Nearly half of Europe’s existing wind farms will reach the end of their normal operational life by 2030.
Electricity is only 24% of Europe’s energy mix today. Ramping up to more than 60% by 2050 is realistic and affordable.
Renewables-based electrification of transport, buildings and industrial processes will drive their decarbonisation, boost energy efficiency and unlock the benefits of “sector integration” e.g. using EV batteries as storage;
Key priorities are incentivising the uptake of renewables-powered vehicles, accelerating the deployment of charging infrastructure, incentivising investment in heat-pumps and scaling up electrolysers for the production of renewable powered green hydrogen where direct electrification is more challenging;
Indirect electrification e.g. via green hydrogen will be key to decarbonise the production of steel, glass, cement.
Implementing the right policies will help make investments happen, notably by reducing capital costs:
A stable home market with clear ambition on the volumes of wind energy that governments want, both onshore and offshore and visibility on e.g. future auctions;
The prospect of stable revenues for those investing in wind, including via well-designed auctions such as a 2-way Contract for Difference or market premiums;
Clear and simple rules on planning and permitting; minimal restrictions from e.g. distance, tip height and radar rules;
Robust CO2 prices driven by a reformed ETS and relevant national or regional measures notably in the non-ETS sector.
Transformation of the energy system to make the market fit for variable renewables:
More dynamic and larger intraday markets, common balancing platforms and products to cover wider trading areas;
ii. Effectively opening ancillary services market for renewables; remuneration mechanisms for new technical features (e.g. inertia, fast frequency response);
Rewards for flexibility including demand response and storage;
Expanding, modernising and digitalising transmission and distribution networks, and tackling short-term bottlenecks;
Ensuring a transparent management of the energy system e.g. on redispatch and ensuring the optimal use of interconnectors;
Phasing out inefficient, carbon intensive and inflexible capacity.
Increased investment in research and innovation to reduce costs, improve system integration – e.g. flexibility – including leveraging digitalisation and improving the competitiveness of Europe’s manufacturing base in a context of rising global competition;
Technology will ensure Europe also keeps the edge on the sustainability of the supply chain, leads on the use of recyclable materials and charts the path for responsible growth with limited biodiversity impacts;
Expansion of technologies that push boundaries and tap into new resources Hybrid systems (e.g. wind and storage) floating offshore wind.
If all this happens, wind will become the cornerstone of an efficient, decarbonised and resilient energy system setting the path for the global energy transition that European citizens and businesses want.