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The North Seas to be Europe’s green power plant?

On 24 April 2023 leaders from nine European countries gathered in the coastal town of Ostend, Belgium to discuss scaling up wind power generation in the North Sea. The North Sea summit marks the second gathering after the inaugural summit last year, which was attended by four countries - Belgium, Denmark, Germany, and the Netherlands. The decision to broaden cooperation was made in response to the urgent need for renewable energy sources following the fallout of the Ukraine war. The second summits’ leaders, including those from France, Germany, Ireland, Denmark, the Netherlands, Norway, Luxembourg, and the UK, were joined by European Commission chief Ursula von der Leyen.

The summit resulted in an ambitious declaration, by setting a target of at least 120 GW of offshore wind energy by 2030, with a goal of more than doubling that capacity to at least 300 GW by 2050. This declaration aims to make the North Seas the Green Power Plant of Europe. In addition, the declaration outlined the aim for the development of a well-functioning market and infrastructure for hydrogen, as well as a resilient, transparent and sustainable regional offshore renewable energy supply chain, alongside safeguarding the supply of relevant critical raw materials through import diversification.

The commitments made in the declaration were welcomed by 100 members of the Offshore Renewable Industry, however, they also expressed critical comments and expectations for public support. The industry association, Wind Europe, noted that Europe invested just €17bn in new wind farms in 2022, which is down from €41bn in 2021 and the lowest investment figure since 2009. In contrast, the investment needed to achieve the targets set by the declaration is massive, with the EU calculating the cost of getting to 300 GW in offshore energy production by 2050 at 800 billion euros.

Industry members are asking for major new investments in manufacturing capacity and key infrastructure, such as grids and ports. They believe that governments should support investments in Europe’s renewables by using the flexibility provided by the EU Green Deal Industries plan and implementing ambitious industrial policies. According to industry actors, investments in the renewable energy sector have been delayed due to the recent increase in input costs, which have risen by up to 40% in the last two years, as well as national interventions. In order to promote the development of the industry's skills base and address recruitment issues, financial viability is essential. Therefore, the industry actors have stated that the planned revenue caps must be lifted by the EU in June 2023 as part of its Electricity Market Reform to restore investment signals.

The green transition is a cornerstone for maintaining competitiveness in the global economy. While the North Sea may be a major provider of clean, affordable energy for industries and businesses in the form of electricity and hydrogen, further action and substantial financial support are considered by the industry to be essential to achieve the commitments in the summit’s declaration.