On the outskirts of Groningen, a medieval Dutch town near the German border, a major construction project is underway.
Miles of high-voltage cable have already been buried in the ground. Workers recently began building an electricity substation to manage the ebbs and flows of renewable energy. And this year, ships will start to ferry giant foundations and rotor blades 50 miles into the North Sea to be part of one of the world’s largest offshore wind farms.
The Dutch green energy project, which will cost roughly $3 billion to build, is expected to generate enough power for 1.5 million people when it starts producing electricity in 2017.
When completed, the venture will become the latest in a series of renewables projects that have sprouted off the coasts of Britain, Germany and Denmark, helping make Europe the global leader in producing green energy from wind farms far at sea.
“Offshore wind in Europe is quickly maturing,” said John Brace, chief executive of Northland Power, a Canadian energy company that owns a majority stake in the Dutch offshore wind project, called Gemini. “Europe is serious about greening its power supplies. There’s both political and public support for these types of projects.”
Europe’s lead in the small but fast-growing offshore wind industry represents one of the few bright spots for the region’s renewables sector, which has gradually fallen behind those in the United States and China in overall green energy investment.
While the amount of money for European onshore wind and solar projects fell roughly one-third percent last year because of Europe’s weak economy, the region’s offshore wind sector – buoyed by continuing government subsidies – received a record $19 billion of investment in 2014. The European industry now represents around 90 percent of all the offshore turbines that have been built worldwide, according to the data provider Bloomberg New Energy Finance.
For many European countries, particularly those with long coastlines, the focus on offshore wind is a response to widespread public anger against the construction of land-based projects in densely populated areas. Analysts also say that by tapping into the strong gusts of wind at sea, offshore projects can generate almost double the electricity of comparable onshore wind farms.
Europe’s offshore renewables push comes just as the United States’ attempts to keep pace continue to flounder because of limited government financial support, low energy prices and investor apathy.
In January, the latest federal auction for potential development sites received only marginal interest from renewables companies, and America has yet to complete its first offshore wind farm. Europe’s first projects began almost a decade ago and now have a combined capacity of 7.2 gigawatts, roughly the equivalent of eight fossil-fuel power plants.
And as Europe looks to hit its target of producing at least 20 percent of its overall energy from renewable sources by 2020, industry watchers say numerous proposed projects could potentially more than triple the amount of electricity generated from the region’s offshore wind projects by the end of the decade.
“Several countries are aggressively developing offshore wind,” said Ronan O’Regan, a director in the renewables practice at the consulting firm PricewaterhouseCoopers in London. “They have taken the view that they want to be No. 1 in this sector.”
A number of hurdles, however, may still frustrate Europe’s plans.
Currently, offshore wind represents a mere 1 percent of global electricity generation. Environmental groups have raised concerns that the wind farms, often located tens of miles offshore, may affect birds’ flight patterns and harm sea life.
High construction costs – linked to work in harsh sea conditions – also make the electricity generated from offshore wind roughly three times as expensive as that from conventional energy sources. That has forced project developers to rely heavily on government subsidies, many of which have been cut in the last 12 months as European lawmakers rein in spending after the financial crisis.
“As support is pulled back, offshore wind needs to show that it isn’t just an expensive luxury,” said Ben Warren, head of environmental finance at the consulting firm Ernst & Young in London. “What we’ve seen is the world won’t pay for expensive green energy forever.”
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