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.
European citizens and businesses also demand a faster, deeper and more inclusive decarbonisation in response to the climate emergency. This requires the rapid transformation of our energy system which accounts for 75% of Europe’s greenhouse gas emissions today.
Governments now 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.
Governments committed for Europe to become the first climate neutral continent by 2050. The European Green Deal will deliver this goal by putting energy sustainable and resource efficient industries at the heart of Europe’s economic revival. This makes wind energy a natural growth and jobs engine for the European Green Deal. 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 at up to 55%.
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 300,000 quality high-skilled jobs, generates €60bn pa turnover and €25bn new investments pa. 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 an inclusive and just energy transition. 70-80% of citizens across Europe support wind energy. And the industry already acts upon the re-skilling of coal miners into wind energy jobs e.g. Jiu Valley training center in Romania.
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 15% of the EU’s power demand on average and much more in many countries: Denmark 48%; Ireland 33%; Portugal 27%; Germany 26%; Spain 21%.
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 a strategic industrial sector in delivering the European Green Deal. 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) maintaining the competitiveness of the European wind supply chain; (c) implementing the right policies; (d) further transformation of the energy system; and (e) 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 100% renewable powered hydrogen where direct electrification is more challenging;
Indirect electrification e.g. via 100% renewable powered hydrogen will be key to decarbonise the production of steel, glass, cement.
Climate neutrality means five times more wind capacity in 2050 than Europe has today. This requires a strong wind manufacturing base. But the European supply chain is struggling due to increased international competitors and lack of visibility on the European market. E.g. Germany alone cut 38,000 jobs since 2016.
China installs twice as much wind each year as Europe. It reduces costs with economies of scale faster. Competition with the Chinese in third country markets is getting tougher because they come with cheaper Government-backed finance.
Key priorities are the recognition of wind energy as a top Strategic Value Chain under the European Green Deal, the enacting of sensible trade policies that guarantee access to global supply chains of raw materials (e.g. steel, glass fibre), and an EU Export Strategy for Renewables to put Europeans on par with Asian companies that currently outcompete on terms of finance in non-EU markets.
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 for new and repowered projects; 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;
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 the European Green Deal and of an efficient, decarbonised and resilient energy system setting the path for the global energy transition that European citizens and businesses want.