Wind power potential

Will European Union wind power reach the tough renewable targets it has been set for 2020? In an exclusive interview Christian Kjaer, CEO of the European Wind Energy Association, explains why and how it just could.

“We simply haven't invested enough in our infrastructure for decades now and that needs to change if we want to make a dramatic change in the way we get our energy in the future”
-Christian Kjaer

The European Union has set a binding target of 20 percent of its energy supply to come from wind and other renewable sources by 2020. In order to achieve this 20 percent energy target, more than one-third of the European electrical demand would have to come from renewables, with wind power expected to deliver 12-14 percent. So how realistic is this target? Well, Christian Kjaer, Chief Executive of the European Wind Energy Association (EWEA) believes that this is completely possible. "To reach the targets set out by the European union we would have to increase total wind power capacity in Europe by 9.5 gigawatts per year over the next 12 years. Given that we increased wind power capacity by 8.5 gigawatts last year, it's not an ambitious aspiration," he explains. It is quite clear that wind energy will take the lion's share of the energy target that the European Union has set, but the target also calls for hydro resources and biomass to be fully utilized. "I would say it's certainly achievable to reach 20 percent renewables although whether we meet the projections for biomass remains to be seen. It's all down to how effectively the members are going to implement renewables - that's the big question mark," adds Kjaer. 

While it is widely believed that the development of wind energy across Europe is limited by existing power infrastructure Kjaer believes that this is not a hugely limiting factor in regard to the physical grid. "We do have some restrictions if we look at certain regions of Europe. There are regions in Spain where you get 40-50 percent of the electricity coming from wind, so there are certainly limitations on how much you can expand there unless you do something with the internal infrastructure of the grid itself," he explains.

Challenges
So, challenges do remain in terms of how the grid is operated. Kjaer believes that it is vital to start putting together plans that allow investors to invest in new infrastructure, as projects take an extended amount of time to get on track. "We certainly need to change operations and look at the way we operate our grid if we want to meet the 2020 renewable target. There is no question that the biggest challenge over the next 10 years is grid infrastructure. The grid is already a limiting factor because of course we don't have electricity infrastructure offshore. We need to start planning to prevent this becoming a challenge in the future," says Kjaer. "In short there are limitations, certainly offshore with the lack of grid, but we need to stop and put in place measures that concentrate on companies investing and building in the sector. There are some institutional problems with this, such as a lack of funding, but we simply haven't invested enough in our infrastructure for decades now and that needs to change if we want to make a dramatic change in the way we get our energy in the future."

While offshore wind is more expensive due to the sky-high costs of foundations and the grid that needs to be built offshore, it will always provide a larger wind resource. Kjaer hopes that as more economies of scale are introduced to the system and that wind turbines are mass-produced, offshore will be recognised for the stronger resource that it is. "The offshore market in Europe is more or less at the level that we were in 1992 and 1993 onshore, so we haven't even come close to reaping the benefits and getting the cost reductions down in the same way as onshore in the last 20 years," he says. "In order to do that we need economies of scale and that's why it's so important that you have some companies that are focusing very heavily on this, including in the UK, Germany and Norway, as well as France. But again offshore infrastructure is a much more imminent issue to solve compared to onshore because there aren't any grids."

Kjaer goes on to explain that the benefit of improving offshore grids is that it is possible to build interconnections between countries that means it would be possible to improve the electricity and tracing of electricity over the borders of Europe, giving consumers the cheapest electricity possible. By planning infrastructure investment it will benefit in terms of maximising the exchange between various member states as well as putting the infrastructure where there are offshore wind resources or weight power resources and improve the functioning of the internal electricity market while meeting targets for renewables. "What we do in terms of offshore infrastructure is extremely important, and here we are in need of faster action than onshore in terms of new infrastructure. We need to figure out structures that allow us to make smart plans in how we build electricity infrastructure offshore at a bilateral or regional country level. It's very much a similar challenge that we're standing in front of as when we were building the oil and gas infrastructure. We would like for that planning to be a bit more international in nature, and a bit more co-ordinated among individual European countries than we saw with oil and gas because it makes sense in terms of electricity markets."

There is no doubt that grid infrastructure is going to be the most important issue to work on in the next decade, along with the development of the power market and a much higher degree of interconnection between the European member states. While it will be possible to learn something from the onshore infrastructure for increasing offshore wind farms particularly around grid development, Kjaer believes that from an infrastructure perspective we in Europe have never much cared about what happens on the other side of the border, which means it may well be harder to do so this time around. "Don't repeat what we've done onshore because there needs to be co-operation in terms of infrastructure planning," advises Kjaer. "Let's not repeat the nationalistic approach that we have taken on for the last 100 years of onshore when we planned grids. Instead it's even more important that we co-operate as the benefits of offshore are that much higher."

Power generation
As Europe looks to expand both onshore and offshore wind generation capacity it becomes clear that wind alone cannot be responsible for all of our power generation because of the variable nature of wind power. So how exact a proportion of European energy can be realistically generated by wind? Kjaer believes it depends on how big an integrated power system it is possible to construct, so the amount of wind energy put into the system at a European level depends on how integrated the European grid system turns out to be. Of course the bigger the geographical area, the more firm power is generated from wind energy so there is a huge benefit in the geographical dispersion of wind energy. However, in order to get that geographical dispersion it means that the grid has to have the same sort of dimensions, which is why interconnections are so valuable because a more interconnected grid means that variability becomes irrelevant. "This is why we believe that the infrastructure is so important, and it's not only about integrating wind energy but also about improving competition in the electricity market."

Kjaer goes on to say that while no-one is suggesting that wind energy should provide 100 percent of all European Union power, but rather if it was well integrated and utilised it could have a large segment of the electricity market. "If we used the enormous hydro resources that we have in Norway or Sweden for example, which complements wind energy extremely well, I have no doubt that we can have a system based on 100 percent renewable electricity, be it biomass, wind, large hydro, small hydro or geothermal, but it requires a complete change in our way of thinking about operating systems and requires that we start utilizing that."

Indeed, Kjaer believes that there are no technical barriers to wind energy producing 25-40 percent of Europe's electricity. He highlights Denmark as having plans to use wind power alone to generate 50 percent of its electricity by 2020, and of course if that's possible in a small geographical area like Denmark why shouldn't it be possible Europe wide. "In reality there are no technical barriers to having half of Europe's electricity supplied by wind energy, but that will be beyond 2020, when we expect to be on target and see between 14 and 19 percent of our energy coming from here. By 2030 I see wind energy will provide at least a quarter of our electricity and I think there's still quite a long way to go in terms of increasing wind energies," explains Kjaer.

Progress
In terms of moving forward, Kjaer explains that the key projects currently underway in the European wind energy space are extremely interesting and that the sector is learning a great deal from these developments. He also points to Eastern Europe as an interesting area, with Romania, Bulgaria and Poland in particular getting serious about renewable energy. "The speed at which the conditions have been put in place to attract investors in great," says Kjaer. "It's interesting to see how these countries have approached the whole debate about the renewables directive, putting in place measures in terms of grid access and payment frameworks."

So how does Kjaer envisage the wind energy space progressing in the future as Europe reaches its 2020 deadline? "It's a truly interesting time," replies Kjaer, "because we have come from a past in which we actually didn't need more new electricity generating capacity. We actually had excess capacity until a few years ago, which is no longer the case because we are shutting down old power plants and have to build new ones. What the European Commission are saying is that between now and 2020 we have to build approximately 350,000 megawatts of new electricity generating capacity, which is equal to 50 percent of all capacity that's currently running in the European Union."

Kjaer explains that the interesting element over the next 12 years will be seeing where that capacity will come from - where wind will be in relation to its main competitors in terms of new electricity generating capacity. "If we look at investments over the last 10 years, Europe has really been investing in wind power and gas, and I think it will be really interesting to see how wind energy compares in terms of cost with building a new gas fired power plant," he says. Kjaer sees three elements that are very much in wind energy's favour. Firstly is that it is quicker to build a wind farm than a new coal or gas fired power plant. Second is the fact that from 2013 coal and gas power plants will have to pay for every ton of CO2 that is emitted. And third is that with a coal or gas fired plant it is vital to take into account future fuel prices in order to understand the cost of operations. "One of the main benefits of wind power is that the cost of carbon and fuel prices will be zero over the next 20 years of operation, whereas you can't guarantee that for coal and gas fired plants, you just don't know what fuel and carbon prices will be.

"The competition over the next 12 years will be who gets to build those 350,000 megawatts that we need in the European Union and it will be between coal, gas and wind energy and with the current outlook for fuel prices, wind energy looks like an increasingly attractive investment."

 

Wind benefits

Some of the many benefits associated with wind power include:

• Economic growth and job creation: In 2008, the value of wind turbines installed in Europe was €11 billion. In 2020, the annual market for wind energy in the EU is expected to reach €17 billion. About 160,000 people in the EU were in wind energy-related employment in 2008. The wind industry could create up to 368,000 new jobs in the EU from 2000 to 2020.
• Cleaning up the environment: Europe's 65 gigawatts (GW) of wind power installed by the end of 2008 will annually avoid 108 million tones of CO2 - the equivalent of taking over 50 million cars off the road, This also translates into an annual CO2 cost of about €2.4 billion.
• Energy independence: Europe now imports more than half its energy, a figure that is expected to climb to 70 percent in the next 20 to 30 years. The European wind industry's installed capacity of 65 GW is enough to provide power for the equivalent of 35 million average EU households. Wind energy allowed EU nations to avoid paying fuel costs of €5.4 billions last year.