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    Offshore wind power presses the Government to accelerate its deployment in Spain


    December 7, 2022 - CE Noticias Financieras

     

      The offshore wind industry is running out of time to ensure that Spain has 3 GW of generation in national waters by 2030. This is one of the renewable targets set by the Government and the most complex to meet because each offshore wind farm needs a minimum of seven years from the start of the project to its commissioning.

      This is an unprecedented energy production in Spain and faces a legal vacuum that needs to be regulated as soon as possible. In the case of the Iberian Peninsula, the companies have to face an added complication, because the wind turbines have to be floating due to an underwater depth that prevents the installation of turbines anchored to the bottom, the most widespread solution in the industry, especially in seas such as the Baltic, North and Irish seas, which are the ones that concentrate most of these operations in the world.

      With this scenario that has not been clarified, the companies are pressuring the Executive of Pedro Sánchez to activate the regulatory framework as soon as possible. There are only a few days left until the end of the year, with the Christmas holidays upon us, so this month is key to promote the deployment of offshore wind energy in Spain from 2023 onwards. The first step is to identify the offshore areas that can accommodate these offshore operations, always taking into account the fishing and tourism sectors.

      The Spanish Wind Energy Association(AEE) insists on the urgency of developing the Maritime Space Management Plans (POEM). With this regulatory package defined, investors can start the procedures for carrying out the environmental impact studies that are necessary to issue the operating license for these renewable complexes.

      In view of the lack of regulations and in order not to delay the projects any longer, companies are already betting on specific areas off the coast that could host these renewable complexes. The groups coincide in locating their future investments in the waters of Galicia, the Canary Islands, the north of Girona, Andalusia and the Basque Country.

      Auctions

      The archipelago concentrates most of the initiatives because offshore wind would bring savings in generation, which is five times more expensive on islands than on the mainland. Together with the announcement of the POEM, the groups are also pushing for the auction model to be defined as soon as possible, which should be regulated this month or in January at the latest, so that the first tenders can be held during the first four months of next year.

      The sector is concerned that the government will set a maximum reserve price, as it did last November. This left the auction of 3.3 GW of new renewable generation practically deserted (only 46 MW were awarded). For the wind industry, the accounts do not work out. With 47 euros per MW hour, the costs are not covered, due to the high inflation of raw materials, logistics and the energy bill. And this in the case of onshore turbines. Offshore wind generation is more expensive with today's technology.

      For this reason, companies are also pushing for concessions to be for at least 20 years, to guarantee a stable income to ensure the profitability of the investment. And the auction model should clarify whether they are regional bids (by autonomous communities) or with a double aspect, for the mainland and for the islands.

      Another urgent issue is the deployment of a network of onshore connection points to evacuate the energy obtained by wind turbines miles off the coast to the distribution grid. Each offshore farm will need a substation for this transport. Analysts estimate that each complex will be able to generate 200 to 500 MW, with an average of 17 turbines per operation (they could reach 12 MW to 14 MW of unit power).

      AEE has already done the math on the economic impact of offshore wind. It could generate more than 7,500 jobs in Spain during the period 2025-2030, reaching 17,400 jobs in 2050. In terms of GDP, it would represent an annual contribution of 2 billion euros per year from 2025 onwards.

      Multi-sectoral impact

      Among the sectors most concerned, the ports could host the factories of some gigantic components, which require their production and logistics to be located on the docks, next to the water surface. The shipyards would also have a new business, related to the construction of a generation of ships specialized in the navigation of service to these renewable complexes.

      The steel industry would be another beneficiary, because steel processing would increase to produce these giant turbines. It would also have a positive impact on the suppliers of equipment installed in Spain, such as the chain manufacturer Vicinay, the tower manufacturer Haizea Wind or Lointek. And Siemens Gamesa (SG), a world leader in offshore wind with nine factories in Spain, although all of them are dedicated to onshore turbines. Energy operators such as Iberdrola and Capital Energy have already prepared their proposals, some of them in the aforementioned locations.

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