Wind Power Out of the Doldrums

The start to the DanTysk wind farm in the North Sea signals that Germany is finally making headway in the technically difficult business of offshore power.
A new day dawns over the North Sea.

Sigmar Gabriel, Germany's minister for economic and energy affairs, traveled last Thursday to the northern port city of Hamburg to celebrate the official start of the offshore wind park DanTysk.

Mr. Gabriel has praised the project off the coast of the German island of Sylt as proof of Germany’s successful shift to renewable energy. With an output of 288 megawatts, DanTysk numbers among the first large wind parks in Germany's part of the North Sea. The gigantic windmills can provide up to 400,000 households with electricity each year.

The inauguration of the North Sea power project is not only bringing relief to politicians but also to the project’s two developers – Swedish energy company Vattenfall and Munich’s municipal utility company – and to German engineering company Siemens, which manufactured the wind turbines. With DanTysk and other projects, the output of German wind power in the North Sea will rise from one gigawatt to about three gigawatts by year’s end. That corresponds to the output of two nuclear power plants.

It also means that what up to now has been the difficult business of offshore wind parks is finally getting under way in Germany.

More companies are daring to become involved in projects that are worth billions of euros.

For a long time, offshore power projects were in the news only because of delays, technical problems and jurisdictional disputes. In contrast to Britain or Denmark, the German wind farms are located far out at sea because of environmental concerns. That increases technical demands, raises costs and makes it more difficult to connect the gigantic windmills to the electrical grid.

Companies such as Siemens had to struggle through a steep and protracted learning curve. The Munich firm, worldwide leader in the offshore power business, had underestimated the complexity of connecting the sites to the German grid. The result was delays and mutual attributions of blame between wind-park operators, grid operator Tennet and Siemens. The German government cut its expansion plan for 2020 from 10 gigawatts to 6.5 gigawatts.

In the meantime, fundamental problems have been solved. More companies are daring to become involved in these projects that are worth billions of euros. Germany-based electric utilities company RWE decided to revive the previously-canceled project Eastern North Sea with its Canadian partner, Northland Power. Both of them are also constructing the Windpark North Sea One, about 25 miles from the German island of Juist.

In summer, Vattenfall and Munich’s utility company will begin their next project, the offshore wind park Sandbank, which is in direct proximity to DanTysk. Electricity is already flowing from Germany-based utility company E.ON’s Amrumbank West project.

 

Video: Substation installation, offshore wind farm DanTysk.

 

Other developers are also increasingly becoming involved in the business, which is more risky than projects on land because of the water’s extensive depth and the sea’s stormy weather. For example, the U.S.-based firm Blackstone inaugurated the Ocean Wind project to the north of the German island of Helgoland last year. As Blackstone manager Sean Klimczak said at that time, he intends “to invest in further German offshore wind parks.”

Manufacturers in the still-young energy sector have one main goal for the coming years: reduce the cost of electricity.

“We intend to reduce the cost of one kilowatt-hour from €0.15 to €0.16 today to around €0.10 by 2020 for German offshore wind parks,” the head of the offshore wind division at Siemens, Michael Hannibal, told Handelsblatt. The DAX-listed company is working to reduce production costs for all important components used in constructing an offshore wind farms — from turbines to foundations to logistics.

That’s also the intention of Hamburg wind-turbine company Senvion, which has developed a new version of its largest 6-megawatt facility. It “has a 20 percent higher energy output than its predecessor,” said Andreas Nauen, the head of Senvion.

 

Georg Weishaupt covers energy issues. To contact him: [email protected]