Jon Wallace voiced concern, stating, “If this turns into a prolonged pause of projects then without a doubt a lot of the 2030 renewables goals will be under pressure.”
A convergence of supply chain disruptions, design issues, and escalated costs in the offshore wind sector has cast a shadow over numerous projects, jeopardizing the timely realization of countries’ climate objectives, caution industry leaders, investors, and analysts.
The urgency to diminish reliance on fossil fuels has spurred manufacturers and supply chains to match the surging demand for cleaner energy, especially within the European Union, which is in the final stages of ratifying a legally binding target to derive 42.5% of energy from renewable sources by 2030.
This ambition marks a substantial increase from the current 32%, necessitating a colossal 420 gigawatts (GW) of wind energy, inclusive of 103 GW offshore capacity. This is more than twice the existing capacity of 205 GW, with a mere 17 GW attributed to offshore installations, as reported by industry consortium WindEurope.
However, throughout this year, projects spanning Britain, the Netherlands, and Norway have encountered setbacks or been postponed due to mounting expenses and limitations within the supply chain. Notably, the renewable energy auction in Britain this month failed to elicit bids from offshore wind developers, primarily due to the exorbitant costs associated with the industry.
Jon Wallace, an investment manager at Jupiter Asset Management, voiced concern, stating, “If this turns into a prolonged pause of projects then without a doubt a lot of the 2030 renewables goals will be under pressure.”
Even prior to the EU’s recent agreement on the enhanced renewables target for 2030, companies like Orsted, Shell, Equinor, Siemens Gamesa (SGRE.MC), and WindEurope had already cautioned that the offshore wind sector’s current capacity falls short of what is required to fulfill climate targets.
The confluence of these challenges has amplified skepticism regarding the sector’s capacity to meet the escalating demand for clean energy. Industry experts emphasize that concerted efforts are imperative to overcome the existing obstacles and fortify the offshore wind industry’s pivotal role in achieving ambitious climate goals.