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    European wind industry agrees to produce 36,000 megawatts per year

    March 19, 2023 - CE Noticias Financieras


      The European Commission has presented this week its Green Deal Industrial Plan. It consists of a Net Zero Industry Act aimed at strengthening the EU's industrial base for clean technologies, a Critical Raw Materials Act aimed at increasing the EU's capacity to source and refine critical raw materials, and a proposal for greater flexibility in the rules governing state aid. Well, according to the European wind association, WindEurope, as the Industrial Plan is designed, it "falls short" of what Europe needs to support and expand its supply chain "and deploy our energy security and climate goals." The Green Deal Industrial Plan is an initiative with which Brussels intends to promote the strengthening of the local (indigenous) supply chain for green technologies. Because Europe, according to the continental wind sector itself, has a large wind supply chain at present, but this is "not big enough" to produce the volumes needed for the EU to meet the climate and energy targets to which it has committed. "We urgently need to expand existing factories and build new factories," WindEurope points out, and this requires - they add - substantial investments in the entire wind energy value chain. Namely: in factories, in grids, in ports (which must be launching pads for offshore wind), in vessels (for the deployment of offshore wind farms) and in skilled labor. According to WindEurope, more than 30 gigawatts of wind power must be installed each year by 2030 (30,000 megawatts, MW) to achieve the European Union's climate and energy security targets. And right now the local supply chain does not even come close to reaching that figure.


      "The Green Deal Industrial Plan is a timid step in the right direction. Much more effort is needed for the Plan to really meet the needs of cleantech expansion in Europe."

      The Green Deal Industrial Plan has four action lines: driving predictable and simplified regulation; driving much faster access to finance; improving skills (skilled labor); open trade to supply chains that are resilient.

      The two major pieces of legislation that pertain to the Green Pact Industrial Plan and that have been proposed by the European Commission this week are the Net Zero Industry Act and the Critical Raw Materials Act.

      Net Zero Industry Act

      The objective of the newly introduced Net Zero Industry Act is to support investment in the deployment of new manufacturing capacity for net zero technologies in wind power in Europe. For wind, it sets an annual manufacturing capacity target of 36,000 megawatts. This is a "good objective", according to WindEurope, but, to achieve this objective, the association says, it will be necessary to deploy a series of specific actions: "support for public financing will play a key role, both at national and Community level", and the Zero Net Industry Act "does not yet establish," complains the large wind power industry association, "European mechanisms relating to funds or financing".

      The Commission envisages a new Sovereignty Fund to support the supply chain of clean technologies. It will be proposed this summer. As a bridging instrument, the Commission has identified the EU Innovation Fund. But the Net Zero Industry Act - WindEurope warns - does not specify how this will operate, so the EU Innovation Fund will have to be adapted if it is to contribute to the materialization of the objectives set out in the Net Zero Industry Act, because right now "it is very much focused on technological innovation, rather than on the actual scaling up of current supply chains, which is precisely what the European Union most urgently needs," the industry notes.


      "Our factories produced almost all the wind turbines that were installed on EU territory last year (16,000 MW), but they need to scale up dramatically to meet the targets set out in the REPowerEU plan".

      More flexible rules

      The European wind industry association has also expressed its opinion on the relaxation of the rules on state aid that the European Commission has promoted, a relaxation whose ultimate goal would be to boost investments at national level in the manufacture of clean technologies, that yes, always in the Temporary Transition and Crisis Framework. WindEurope welcomes this, insofar as it allows the governments of the countries, during a limited period, to support capital investments (CapEx) in their national supply chains of clean technologies, but -warn the wind energy industry- it does not cover operation and maintenance expenses (OpEx).

      EU introduces criteria that go beyond "cheapest kilowatt"

      The Net Zero Industry Act requires national governments to apply non-price criteria in their renewable auctions. Member states can already use non-price criteria and set a premium on those items from European manufacturers that are good and that society wants. "Governments are now obliged to do so," WindEurope says. The Net Zero Industry Act identifies these non-price criteria: environmental sustainability (a blade manufactured in China cannot have the same points as one produced 15 kilometers from the wind farm), integration into the energy system and contribution to the resilience of clean technology supply chains (the logistical problems arising first from the pandemic and then from the war have highlighted the risks to the sector of its dependence on remote locations).

      This concept of supply chain resilience is a complex one, acknowledges WindEurope, which suggests that it might best be defined by simple recognition criteria of the economic and social value of European supply chains in deploying energy security supply.

      Giles Dickson, executive director of WindEurope: "The EU's green industry plan falls short as it stands right now. OK, let's manufacture 36,000 megawatts of wind turbines in Europe every year. But how? National governments have gained flexibility to support green industries, although it is not clear how they will do so. So financial support from the European Union is still to come. The Sovereignty and Innovation Fund will be key, but the EU must overcome its obsession with technological innovation. The expansion of renewable supply chains is a volume problem: what it comes down to is simply that we don't have enough factories and infrastructure today to build and install the volumes Europe needs. It is good that governments are now obliged to set premiums on the sustainability and resilience of their renewable supply chains; it is crucial that they work out all the details in this regard. So there is still a lot of fine-tuning to do to make sure this Plan works."

      Critical feedstocks

      The production of all the renewable technologies needed to reach climate neutrality by 2050 (net zero in ceodes) is going to require feedstocks. Europe is currently heavily dependent on third countries for many of these feedstocks. The Critical Raw Materials Act aims to end this status quo. The experience of the war in Ukraine and the effects of gas shortages have highlighted the dangers of overdependence on a single country for critical supplies.

      The Critical Raw Materials Act includes a list of materials important to the wind industry, such as rare earths used in permanent magnets, copper for cables and lithium for batteries. The EU's objective with this law is to develop its own supply chain of critical raw materials to meet this demand. The law proposes that the European Union should extract at least ten percent of the raw materials it uses from its own territory (a target to be achieved by 2030). And at least 40% of them should be processed within the European Union by that date.

      One of the ways to increase the supply of critical raw materials for the supply chain is recycling. The Critical Raw Materials Act states that by 2050, fifteen percent of the EU's annual raw materials consumption must be recycled. The European Commission has focused particularly on permanent magnets, a key component in many wind turbines, and plans to develop a recycling supply chain specifically for this by 2030 (permanent magnets are currently imported mainly from China).

      The Critical Raw Materials Act does not include fiberglass factories, warn WindEurope, when this is a very important component of wind turbine blades and when the European industry is very dependent on imports of this material. The wind industry is working on freeing itself from this dependence, they point out from the association, and already uses recyclable wind turbine blades in the German wind farm in Kaskasi, and will install forty recyclable blades also in the wind farm Sofia in the UK, but, in addition to that, the Commission will have to do something - WindEurope-plates to break Europe's dependence on these imports as it is doing with the Critical Raw Materials Act.


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