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1、Our wind,our valueA Rystad Energy report in cooperation with WindEuropeMarch 2024Creating value for Europe,living up to Europes valuesAbout this reportRystad Energy Our wind,our value March 2024This report has been produced by Rystad Energy in cooperation with WindEurope.It is focused on the signifi

2、cance of wind energy generation targets for European energy security,job market,economic growth and nature.The outset of the report is based on WindEuropes capacity outlook for wind power in Europe in its latest 2030 Targets scenario for wind capacity additions and implied generation through 2030.In

3、 addition to the 2030 Targets scenario,Central(most likely)and conservative Low scenarios are considered in the report.Using this capacity outlook as an exogenous factor,Rystad Energy has applied its models and industry knowledge to quantify the impact of potential wind energy underperformance(i.e.C

4、entral and Low Scenarios)relative to the 2030 Targets Scenario on various dimensions of the traditional energy trilemma,European GDP,the job market within the wind sector and underlying emissions from power generation processes.Through extensive research and modeling,Rystad Energy aims to identify t

5、he magnitude of positive environmental impact and value creation that wind energy brings to the European continent.As such,all analysis in this report has been done by Rystad Energy,if not explicitly mentioned otherwise.Rystad Energy has also contributed to the background material in this report,des

6、cribing the current status of the European wind market and its supply chain.Based on the findings in this report,WindEurope has provided its policy recommendations.2ForewordRystad Energy Our wind,our value March 2024Europe remains at the forefront of the global energy transition and decarbonization.

7、Fossil energy carbon dioxide(CO2)emissions on the continent declined from nearly 5 gigatonnes per annum(Gtpa)in the early 2000s to around 3.5 Gtpa currently.The gradual integration of renewable energy sources and decarbonization of the European power mix has been one of the main drivers behind this

8、improvement.Most of this renewable energy activity has occurred in the EU27,UK,Norway and a few other countries integrated into the overall European power system.Direct fossil CO2 emissions from the European power and heat generation sector peaked in 2007,two years after the introduction of the EU E

9、missions Trading System(ETS).The peak annual CO2 footprint was recorded at 1.58 Gtpa,with Germany,Poland,Italy and the UK accounting for 57%of the power CO2 footprint on the continent.Since 2007,European power CO2 emissions steadily declined to around 0.84 Gtpa in 2020 before rebounding slightly to

10、about 0.95 Gtpa in 2021-2022 on the back of the energy crisis and reintegration of coal into the European power mix.In 2023,the European power sector proved its commitment to structural decarbonization as record-high generation from renewable sources significantly impacted demand for both coal and n

11、atural gas from the European power mix.As a result,a record-low(in modern history)CO2 footprint of the European power sector of 0.78 Gtpa was achieved in 2023.While the total CO2 footprint of the European power sector is important,the absolute emission levels do not reveal the full picture,as Europe

12、an electricity demand and total generation declined between 2007 and 2023.The carbon intensity of the European power mix peaked at about 450 kilograms(kg)of CO2 per megawatt-hour(MWh)in the 21st century and declined from 438 kg per MWh to 239 kg per MWh between 2007 and 2023.Wind energy alone accoun

13、ted for 131 kg out of 199 kg per MWh of improvements in the European carbon intensity of the power mix between 2007 and 2023.In other words,65%of improvements were driven by the integration of wind into the European power mix,which is the largest contribution across all primary energy sources.The co

14、ntribution of wind energy to the decarbonization of the European power mix is just one of the benefits that this industry brings to the continent.Other benefits cover a wide range of themes including European energy autonomy,economic growth,and jobs.While Europe remains fully committed to its ambiti

15、ous wind energy targets,the speed at which capacity deployment is achieved will determine the state of the European wind industry in 2030 and have implications for the extent of these benefits.In this report,we analyze what the speed of wind energy growth really means for Europe and discuss if the c

16、urrent industry sentiment and existing policy framework are sufficient to trigger the needed wind expansion and associated benefits.In our previous report from April 2023,covering The State of the European Wind Energy Supply Chain,we argued that the supply chain was lagging despite an aggressive dem

17、and outlook for wind.Specifically,many suppliers found it challenging to expand their operations in a high-inflation,low-margin environment,which were coupled with the uncertainty and associated risks around the speed of the demand expansion.We note that the policy framework to incentivize the Europ

18、ean wind manufacturing sector and project developers has moved in the right direction since April 2023,somewhat reviving optimism about European wind energy prospects.Still,a lot more can be done in the policy spectrum to facilitate Europe delivering on its wind energy goals and achieving significan

19、t economic savings amid reduced dependency on fossil fuel imports in 2030.The European wind sector currently employs 320,000 people and provides close to 30 billion in direct contribution to GDP.One of the main findings of our report suggests that the wind sectors workforce can grow to about 560,000

20、 full-time equivalents(FTEs),which will boost the direct contribution to GDP to 53 billion by 2030,in real 2023 terms.As such,the wind sectors direct contribution to GDP could be maintained at a level of 100,000 per FTE per year,in real 2023 terms,if Europe plays it right.While much of our analysis

21、is focused on the isolated impact of wind energy on various performance indicators,we note that in many cases,wind energy growth cannot be easily substituted by other renewable energy alternatives.For example,solar power needs to be scaled up a lot too,but we cannot compensate for theoretical wind o

22、utperformance with additional solar capacity due to very different profiles of solar and wind capacity factors throughout the year in most European locations.Replacing wind with incremental nuclear and hydro generation capacity in the next 5-10 years is unrealistic due to typical project timelines(t

23、ime from decision to the start of operations)for these other baseload non-fossil sources and the cost of production for new initiatives.There are also some limits on the adoption of biomass in the power sector,as well as scalability concerns for geothermal energy.As such,we argue that the wind secto

24、r is critical for European energy autonomy,climate goals,economic growth and job creation.This report provides an in-depth assessment of potential losses for Europe if the continent fails to deliver on its wind targets.Alexander Dobrowen FltreHead of Offshore Wind Research,Rystad EnergyArtem Abramov

25、Partner&Head of Clean Tech Research,Rystad Energy3Table of contentsRystad Energy Our wind,our value March 2024Executive summary5Key findings9Introduction10Evolution of energy trilemma11European power mix12Wind manufacturing facilities in Europe13Part 1 Current status of the market14Cost inflation an

26、d interest rates14Turbine component imports16European wind expenditures 17Current wind energy policies18Part 2 Cost of Inaction 22Scenario Introduction22Summary of results25Energy security:power and fossil fuel demand implications26Energy security:increased volatility risks30Job market35Limited manu

27、facturing capacity as a bottleneck for job creation38Economic growth40Nature46Part 3 Policy recommendations49Appendix524Figure 1:Avoided fossil fuel imports due to wind energy generationBillion cubic meters per yearAdditional fossil fuel imports of 64 Bcm avoided in 2030 in the Targets scenarioRysta

28、d Energy Our wind,our value March 2024Executive SummaryWind generation allowed Europe to avoid nearly 100 Bcm of fossil fuel imports in 2023(predominantly a mix of coal and natural gas).Annual avoidance of fossil fuel imports stood at about 73 Bcm in 2019 and has grown steadily alongside the increas

29、e in the amount of power generated by wind.Considering the significant increase in average natural gas and coal prices in 2021-2023 compared to historical levels,the value of economic savings due to avoided fossil fuel imports increased from around 12 billion-13 billion per year in 2019-2020 to a pe

30、ak of more than 80 billion in 2022.The average annual economic savings stood at about 39 billion in 2019-2023.The 2030 Targets scenario is accompanied by an increase in annual avoidance of fossil fuel imports to 200 Bcm by 2030,whereas the Low case will only allow for about 140 Bcm avoidance in 2030

31、.Using average natural gas and coal prices for European customers from 2023 for the remainder of the decade,we estimate annual economic savings due to fossil fuel import avoidance at approximately 76 billion per year in the 2030 Targets Scenario.The economic savings are reduced to 63 billion per yea

32、r in the Low case.Hence,in the Low scenario,Europe might need to spend an additional 90 billion on fossil fuel imports in 2024-2030 compared to the spending requirements under the 2030 Targets Scenario.We note that this assumes average natural gas and coal prices from 2023 to be representative of th

33、e rest of the decade.In reality,the continent might find it difficult to secure the needed supply of fossil fuels in the Low scenario,with such a development inevitably resulting in another shock in commodity markets(i.e.highly volatile prices for end consumers)in the next few years.7380798896104111

34、123138156181203102107113119124132139050100150200201920202021202220232024202520262027202820292030 History 2030 Targets Scenario Low ScenarioSource:Rystad Energy research and analysis5Figure 2:Full time equivalent(FTE)jobs by scenario,EuropeThousand FTEsAdditional 240,000 full-time wind sector jobs in

35、 2030Rystad Energy Our wind,our value March 2024Executive summary3245640100200300400500600Current(2023)2030 Targets ScenarioEuropean wind sector employment stood at 324,000 full-time employees in 2023.We estimate that under the WindEurope 2030 Targets scenario,wind energy will be responsible for abo

36、ut 564,000 full-time employees by the end of the decade.As the 2030 Targets scenario assumes a quick ramp-up of onshore wind,the majority of job creation will be linked to this sector.Hence,2030 Targets scenario will create 240,000 of additional jobs linked to the sector by the end of this decade.Ad

37、ditionally,the 2030 Targets scenario still sees a three-fold increase of offshore wind capacity between 2024 and 2030,with capacity ramping up more rapidly from 2026 onwards.Consequently,offshore wind will start to contribute more towards the total jobs in Europe as more and more offshore capacity c

38、omes online.Source:Rystad Energy research and analysis6More than 20 billion of additional GDP contribution in 2030Rystad Energy Our wind,our value March 2024Executive SummarySource:Rystad Energy research and analysisFigure 3:Wind energy developers and manufacturers contribution to European GDPBillio

39、n EUR,real(2023)As wind power generation becomes a major source of electricity supply in Europe,the contribution from the wind industry is playing an increasingly important role in the European economy.Back in 2010,the direct contribution from developers,manufacturers and service providers totaled 1

40、0.6 billion(in real 2023 terms),with around two-thirds originating from electricity sales from developers.This represented only 0.05%of the European GDP.Over the last decade,the contribution has grown significantly in both relative and absolute terms.It is estimated that the total direct contributio

41、n from the wind industry reached 26.2 billion in 2023.Most of the growth has been the result of greater wind power generation due to increased capacity.The revenue of developers have also been lifted by higher electricity prices,especially during 2022.As such,the direct contribution from developers,

42、manufacturers and service providers reached 0.11%in 2023.However,the contribution from developers has been increasingly significant,totaling 24 billion(or 85%),compared to 4.2 billion from manufacturers and service providers.Under the 2030 Targets scenario,it is forecast that the direct contribution

43、 from the whole wind energy industry will reach 0.22%of European GDP.This growth will be mostly driven by the expansion in generation capacity,meaning that the role developers play will be increasingly significant for the economy.Higher capacity factors for wind generation and increased exposure to

44、the spot market add further support.By 2030,the contribution from developers is forecast to reach 43.9 billion,with manufacturers and service providers contributing around 8.8 billion.In the Low scenario,where the development of new projects remains unchanged from the current level,the total contrib

45、ution to GDP from the wind sector would remain below 0.15%.7 9 10 11 10 13 12 15 15 18 19 20 29 24 4 3 4 4 4 4 6 6 3 2 2 1 1 3 26 28 28 29 29 31 32 28 32 34 38 41 47 53 010203040506020102015202020252030History DevelopersHistory ManufacturersLow Scenario2030 Targets Scenario7Figure 4:Average annual v

46、alue of emissions avoided by wind under the“120 by 2030”scenarioBillion EUREmissions avoided by wind in the Targets scenario are valued at 28 billion per yearRystad Energy Our wind,our value March 2024Executive summary9.713.228.10510152025302019-2023Low(2024-2030)2030 Targets(2024-2030)We quantify t

47、he value of emissions avoided by wind under the EU ETS.EU ETS prices increased from less than 20 per tonne in 2015-2017 to an average of 81-82 per tonne in 2022-2023.While different factors are currently impacting EU ETS development in different directions,we analyze the value of future CO2 emission

48、s avoided by wind under the“120 by 2030”scenario,where the EU ETS price gradually increases towards 120 per tonne in 2030.In the last five years(2019-2023),the annual value of emissions avoided by wind in Europe averaged 9.7 billion.We note that even in the Low scenario,where lifecycle emissions avo

49、idance declines towards 100 million tonnes of CO2 by 2030,the average annual value of emissions avoided by wind is expected to increase to 13.2 billion in 2024-2030 amid higher EU ETS prices in the forecast period.The 2030 Targets scenario will allow the continent to further boost the value of emiss

50、ions avoided by wind,to 28.1 billion per year,in the considered forecast period.Hence,the magnitude of the difference between the value of emissions avoided by wind under the 2030 Targets and Low scenarios is comparable to the difference between these scenarios on direct contribution to the European

51、 economy.Source:Rystad Energy research and analysis8Up to 50 billion per year difference between 2030 Targets and Low scenariosRystad Energy Our wind,our value March 2024Executive Summary*Job market modeling for Low Scenario is based on WindEuropes independent assessmentSource:Rystad Energy research

52、 and analysisTable 1:Assessment of European wind scenarios across energy security,job market,economic growth and nature dimensions in 2024-2030Performance Dimension2030 Targets ScenarioSevere Underperformance(Low Scenario)Cost of Inaction(Difference between Low and 2030 Targets)Energy Security203 Bc

53、m of fossil fuel imports avoided due to wind energy generation in 2030Expected economic savings of 76 billion per year in 2024-2030139 Bcm of fossil fuel imports avoided due to wind energy generation in 2030Expected economic savings of 63 billion per year in 2024-203064 Bcm of extra fossil fuel impo

54、rts in 203013 billion per year economic loss in 2024-2030.Job Market564,000 people employed in the European wind sector in 203056%increase in European wind job demand between 2023 and the 2024-2030 average.320,000*people employed in European wind sector in 2030Relatively flat European wind job deman

55、d in 2023-2030 period.240,000European wind jobs lost in 2030Opposite trend in the labor demand for the sectorEconomic GrowthWind Energys direct contribution of 53 billion to European GDP in 203050%increase in direct contribution to GDP between 2023 and the 2024-2030 averageWind Energys direct contri

56、bution of 32 billion to European GDP in 203010%increase in direct contribution to GDP between 2023 and the 2024-2030 averageLost direct GDP contribution of 21 billion in 2030Stagnation in GDP contribution rather than a continuous increase from the wind sectorNature299 million tonnes of lifecycle car

57、bon dioxide emissions avoided by average annual installation wind vintage in 2024-2030Annual value of 28.1 billion for avoided emissions.128 million tonnes of lifecycle carbon dioxide emissions avoided by average annual installation wind vintage in 2024-2030Annual value of 13.2 billion for avoided e

58、missions.1.2 Gt of incremental lifecycle emissions due to lower wind activity in 2024-2030.15 billion per year impact on EU ETS spending in 2024-2030.9This report aims to provide an update on the outlook for the European wind energy sector and understand potential implications for energy security,jo

59、b market,economic growth and the nature(environment)if the continent falls short of its ambitious wind energy targets for 2030.The outset of the report is based on WindEuropescapacity outlook for wind power in Europe in its latest 2030 Targets scenario for wind capacity additions and implied generat

60、ion through 2030.In addition to the 2030 Targets scenario,Central(most likely)and conservative Low scenarios are considered in the report.Part 1 of the report describes the current status of the European wind energy sector.We start with a recap of the traditional energy trilemma that is frequently u

61、sed by policymakers as a guiding principle to find a balance between the often-conflicting challenges:ensuring energy reliability,affordability and sustainability.We describe how European policymakers have approached the energy trilemma in recent years and what kind of role wind energy plays in this

62、 discussion.We present the latest fact-based statistics on the development of the European power mix and progress with wind energy supply chain development on the continent.Further,we summarize the evolution of the main challenges and bottlenecks for the European wind sector:inflationary environment

63、 and implications for recent auction prices,high interest rates,dependency on turbine imports from China,and overall spending profile for European onshore and offshore wind.We conclude the first section of the report with an in-depth assessment of recent policy announcements that are relevant to the

64、 wind sector and identify the areas where further policy progress might be needed.Part 2 of the report is dedicated to the in-depth assessment of three wind energy scenarios across four different performance dimensions:energy security,job market,economic growth and nature.At the start of the second

65、part,we present the aforementioned scenarios,which are used as input into the models underlying cost of inaction assessment across four performance dimensions.In the energy security section,we highlight the potential increase in European power demand between 2023 and 2030 driven by accelerated elect

66、rification of the commercial and industrial(C&I)sector and green hydrogen development.Therefore,significant growth in wind and other renewable energy is critical to maintaining fossil fuel demand from the power sector at current levels,even before we consider continuous displacement requirements.Due

67、 to the nature of seasonal generation peaks and troughs for solar energy,it is unlikely that the underperformance of wind generation can be compensated by other variable renewable sources in 2030.In turn,non-variable baseload non-fossil generation sources,such as hydro and nuclear,are also unlikely

68、to provide incremental generation in 2030 compared to the current base case outlook amid long cycle times for greenfield and expansion projects.As a result,we argue that the underperformance of wind energy will inevitably increase fossil fuel imports in Europe in 2030.We estimate incremental fossil

69、fuel imports of 64 billion cubic meters(Bcm)in 2030 for the Low Scenario compared to the 2030 Targets scenario,where wind energy helps reduce 203 Bcm of fossil fuel imports.This difference translates into a 13 billion per year economic loss over the 2024-2030 period.Under the 2030 Targets Scenario,w

70、ind energy will be responsible for 336,000 jobs in Europe by the end of 2024,which could increase to 564,000 full-time equivalent(FTE)employees by the end of the decade.For comparison,the Low Scenario is associated with job demand staying 320,000 FTEs throughout 2030 revealing a staggering 240,000 j

71、obs difference between the two boundary scenarios in the report.When discussing the nature,we examine annual lifecycle CO2avoidance by wind energy in different scenarios.In the 2030 Targets scenario,annual lifecycle CO2avoidance is expected to increase to 330 million-370 million tonnes by the late 2

72、020s.The Central Scenario will also be accompanied by a comparable increase in annual CO2avoidance,while the Low Scenario will be accompanied by a gradual decline in annual lifecycle CO2avoidance towards 100 million tonnes in 2030 as the rest of the European power mix becomes less carbon intensive.H

73、ence,in the Low Scenario,1.2 gigatonnes(Gt)of incremental lifecycle emissions are expected due to lower wind activity in 2024-2030.This translates into a 15 billion per year impact on European Union Emissions Trading System(EU ETS)spending over 2024-2030.Implications for Europe if the continent fail

74、s to deliver on wind energy ambitionsRystad Energy Our wind,our value March 2024IntroductionSource:Rystad Energy research and analysis10The energy trilemma refers to finding a balance between the often-conflicting challenges:ensuring energy reliability,affordability and sustainability.Reliability re

75、fers to whether a country or entity has an uninterrupted availability of energy supply to satisfy its domestic needs.In the short-term,such a system should deliver energy despite sudden changes in demand or part of the supply.In the long-term,this means energy security in terms of energy resources.A

76、ffordability means affordable energy that is accessible to everyone.Sustainability refers to energy production that does not have a negative effect on the planet for future generations,both in terms of emissions and human encroachment.The elements in the energy trilemma are universal and will be rel

77、evant for the development of other commodities as well.Historically,the focus between the elements of affordability,sustainability and reliability has shifted depending on the energy climate.After the oil market downturn in 2014,the focus was on cutting costs in the corrected energy market.After thi

78、s,the focus on energy transition and decarbonization of energy gained momentum.The energy industry is still undergoing fundamental change with an increased emphasis on renewable energy sources,efficiency and emission reduction.The Covid-19 pandemic accelerated this trend,as policymakers saw an oppor

79、tunity to use the energy transition as a means to reboot the economy after lockdowns.Russias invasion of Ukraine served as a reminder of the importance of reliable sources of energy supply.In Europe,this has accelerated the energy transition and led the region to become independent of Russian gas an

80、d EU leaders have sharpened their focus towards energy reliability.Moreover,the entire reliability dimension was split into two pillars:energy autonomy and energy security.The focus today is not only on the resiliency of the energy system in its conventional sense(legacy definition of reliability)bu

81、t also on achieving it predominantly through domestic efforts strengthening local supply chains and the energy project development landscape.The trilemma between autonomy,affordability and sustainabilityRystad Energy Our wind,our value March 2024IntroductionSustainabilityAffordabilityReliabilityWher

82、e we should beEnergy transition focus from 2018Cost focus in repriced markets 2015Ukraine invasion 2022The energy trilemma illustrates the balance between affordability,sustainability and reliability in the general energy systemRussias invasion of Ukraine in 2022 has shifted the focus towards reliab

83、ility and European leaders are now lifting energy autonomy and energy security up on the agenda Where we should beand while the buildout of renewables is aimed at serving both the Sustainability and Autonomy parts of the trilemma,affordability is being pressured.SustainabilityAffordabilitySustainabi

84、lityAffordabilityAutonomy/SecurityAutonomy/SecurityFigure 5:Evolution of the energy trilemma in EuropeWhere we are todayWhere we should beSource:Rystad Energy research and analysis11Figure 6:Europe power generation mix by energy sourceTerawatt-hours(TWh)per year Renewable power generation overtakes

85、fossil fuels with major contribution from windRystad Energy Our wind,our value March 2024Introduction*Other includes geothermal,liquids,marine,hydrogen mixed and non-renewable wasteSource:Rystad Energy PowerCubeFor the last two decades,the share of renewable power generation has been growing steadil

86、y across Europe mainly driven by onshore wind power.Up to 2010,fossil fuels supplied more than 50%of Europes total electricity.However,the closure of coal plants across the continent and a strong growth in solar and wind capacity have helped shift the balance in favor of renewable energy.Coal power

87、generation has been in a sharp decline since 2007,which has continued to date.Several countries including the UK,Spain,Italy and France decided to begin the decommissioning of their coal generation fleet,helping gradually reduce generation from the source that has the largest carbon footprint.Howeve

88、r,gas power generation has continued to play a key role in helping meet demand and back up the intermittency of renewable power generation.As such,gas power has remained relatively stable over the last decade despite supply issues and high prices.Renewable power generation overtook fossil fuels for

89、the first time in 2020 when there was a strong decline in the utilization of gas and coal plants because of lower electricity demand due to the pandemic.At the same time,wind and solar PV capacity continued to grow,helping drive the share of renewable generation to 41%in the same year.Wind power gen

90、eration has now become the largest source of renewable energy in Europe.In 2023,onshore wind power generation reached 468 terawatt-hours(TWh)and offshore wind generation 110 TWh,taking the total supply from wind to 17%of total generation.Hydropower continues to be the second largest source of renewa

91、ble energy with approximately 560 TWh of generation in 2023.Renewable power generation has also overtaken nuclear power supply.Nuclear power used to be the second-largest source of electricity in Europe,with generation peaking at 1,121 TWh in 2004.The closure of nuclear reactors across the continent

92、 due to safety concerns has led to a steady decline in generation from nuclear power.05001,0001,5002,0002,5003,0003,5004,0004,5001990199520002005201020152020Solar thermalSolar PVOffshore windOnshore windHydroBioenergyOther*GasCoalNuclear0%10%20%30%40%50%60%1990199520002005201020152020Fossil shareNuc

93、lear shareRenewable shareWind shareFigure 7:Share of different primary energy sourcesPercentage(%)12Wind manufacturing facilities in EuropeRystad Energy Our wind,our value March 2024Introduction*Bubble sizes indicate relative manufacturing capacities within each category,based on MW for blades and n

94、acelles,tonnes for towers and offshore wind foundations,and km for cables.Source:Rystad Energy research and analysisEurope is one of the largest regions in terms of manufacturing capacity for wind power components.Europe has an interconnected supply chain,as the European Union Free Trade Agreement h

95、elps the movement of goods across member states borders.Noteworthy European countries in the wind supply chain include Germany,Spain and Denmark,all of which have significant activity linked to producing the main components of wind turbines blades,nacelles,and towers.In recent years,France has also

96、emerged as a key country,with new blade and nacelle manufacturing plants.For offshore wind foundations,key producers include the Netherlands,Germany and Denmark.Unsurprisingly,these countries are also among the leaders in terms of installed capacity for offshore wind in Europe.Most of these faciliti

97、es are in port cities,facilitating sea transport.We expect this trend to continue as more manufacturing facilities producing offshore wind components will be added.For cable manufacturing medium voltage and(extra)high voltage activity is quite distributed,with contributing countries including Italy,

98、France,the UK,Poland,Norway and Sweden.Notably,the cable production facilities illustrated in the chart to the right may also produce cables for high-voltage direct current(HVDC)interconnectors and oil and gas electrification.The focus on energy autonomy/security in Europe also has consequences for

99、the supply chain of components and services related to the build-out and operations of the European wind capacity.This is expected to drive the need for further expansion of manufacturing sites,ports and related services.In turn,this will lead to a growing demand for labor.The European wind workforc

100、e has remained stable at around 300,000 FTEs from 2019-2022,but this number is expected to rise with the planned scale-up.Figure 8:Operational manufacturing sites for main wind power components in Europe,as of 2023 year-end*13Figure 9:Onshore wind auctions awarded prices in selected marketsEUR per m

101、egawatt-hour(MWh)Cost inflation and interest rates have resulted in developers bidding for higher pricesRystad Energy Our wind,our value March 2024Current status of the market*Indexed cost includes equipment,project development,engineering,installation,maintenance and operation costsSources:Rystad E

102、nergy PowerCubeThe recent escalation in auction prices for onshore wind developers is a response to the pressures of escalating costs and rising interest rates.These challenges have led to diminished margins for suppliers and,consequently,shifted financial pressures onto developers,compelling them t

103、o increase their auction bid prices to counterbalance these rising expenses.The pace at which bid prices have climbed surpasses the rate of inflation in project costs,marking a shift from historical trends partly due to the significant uptick in interest rates.Although a temporary reduction in compo

104、nent costs is anticipated,a longer-term increase is expected by 2027 due to tightening supply chain constraints,underscoring the need for flexible bidding mechanisms to address unforeseen cost increases and avoid project cancellations.Frances auction scheme for onshore wind,which had a cap set at 70

105、 per MWh to avert speculative bidding,has seen this limit adjusted upwards in response to inflation,although the exact new cap remains undisclosed.This adjustment aims to allow bids to reflect actual costs more accurately while ensuring that developers are not excessively inflating future subsidy co

106、sts.Interestingly,Germany has also experienced an upward trend in auction prices for onshore wind projects,albeit to a lesser extent than France.This variance can be attributed to Frances more pressing need to accelerate its progress towards renewable energy targets,necessitating more aggressive bid

107、ding strategies to catalyze project development and catch up with its objectives.For offshore wind,the slower pace of capacity awarding does not allow for a similar trend.However,the UKs 2023 offshore wind auctions faced a setback as developers abstained from bidding,citing that the government-offer

108、ed prices set at 44($55.50)per MWh(2012 reference prices)failed to match the escalating costs.In response,the UK government has acknowledged these issues and increased the maximum Administrative Strike Price for offshore wind projects by 66%,to 73 per MWh,and by 52%for floating offshore wind project

109、s,to 176 per MWh,for the upcoming AR6 auction.Figure 10:Indexed onshore wind project cost compared to indexed awarded prices in selected markets*January 2020=100,EUR per MWh 505560657075808590GermanyFranceIndexed costIndexed awarded price FranceIndexed awarded price Germany809010011012013014014Highe

110、r interest rates eat into gearing potential,reducing share of project financeRystad Energy Our wind,our value March 2024Current status of the marketFigure 11:European Central Bank interest ratesFixed rate interest rate(%)0%10%20%30%40%50%60%70%80%90%100%0123456789102015201620172018201920202021202220

111、23Project financeCorporate financeShare(%)of capacity backed by project financeFigure 12:Financially closed offshore wind capacity in Europe per year,by type of financingCapacity financed(GWAC)Share(%)of capacity backed by project finance0%1%2%3%4%5%Jan-15Jan-16Jan-17Jan-18Jan-19Jan-20Jan-21Jan-22Ja

112、n-23Rebooting economies and supply chain disruptions led to rapidly increasing inflationary pressure across industries,pushing prices up for key raw materials and manufactured components.To remedy this,central banks raised interest rates,and Figure 14,to the right,shows how the European Central Bank

113、 lifted its fixed rates from 0%in July 2022 to 4.5%by September 2023.While the soaring inflation itself posed a threat to the European wind targets,the remedial interest rate hikes created a“double whammy”for wind developers and expanding supply chain players.Increased financing costs put pressure o

114、n project profitability.Furthermore,the increased capital costs for suppliers looking to increase their capacity to accommodate growing demand may as well be lifted onto developers in terms of higher costs of components and services.When the Central Bank started lifting its fixed rate interest rates

115、 in July 2022,it was the first change since March 2016,when it was lowered from 0.5%to 0%,where it stayed for more than 6 years.During this period,Europe saw a growing share of project-financed offshore wind farms,shown in Figure 15.Many of these projects were highly leveraged in pursuit of higher r

116、eturns,a strategy that has become decreasingly appealing to developers as interest rates have come back to higher levels.While the potential for gearing up is diminishing,the situation may favor companies with large balance sheets.2023 was a strong year for projects backed by corporate finance,with

117、more than 5.5 GW(65%)of the capacity reaching financial close opting for this strategy.Despite the market headwinds and uncertainty,2023 was a record year for offshore projects reaching a final investment decision,reaching nearly 9 GW a positive comeback for the European offshore wind sector after a

118、 low in 2022 of less than 200 MW.Source:Rystad Energy research and analysis15Significant turbine-related imports to EU,with majority coming from ChinaRystad Energy Our wind,our value March 2024Current status of the marketFigure 13:Annual wind turbine component import value to EU from non-EU countrie

119、sBillion USD,nominal01234567201820192020202120222023ChinaIndiaTurkeyUSOthersFollowing Russias invasion of Ukraine,European policymakers have increased their focus on energy security,autonomy and sovereignty.This has been expanded to include not only the supply of energy itself but an increased indep

120、endence across the supply chain and sourcing of key raw materials.One of the areas receiving the most attention in the wind industry has been the turbine market,where European and Western manufacturers have struggled financially in recent years.This has challenged their prospects of ramping up their

121、 capacities at the scale and pace that is needed for Europe to reach its ambitious targets.Figure 16,to the right,shows that turbine-related imports to the European Union have been growing in recent years,reaching approximately$6.4 billion in 2022.This includes main components such as nacelles,blade

122、s and towers,in addition to sub-components.The main exporter to the EU in terms of trade value is China,which has contributed more than 50%of the import value from 2018 to 2022,on average.India,Turkey and the US follow as other large exporters of turbine-related components to the EU.While it is too

123、early to conclude with a trend shift,2023 saw a slight decline in the import value,estimated to decline by about 11%year-on-year.While imports from China and India are estimated to have declined in 2023,Turkish turbine-related exports to the EU grew significantly.It should be noted that the inflatio

124、nary pressure in recent years has pushed up the trade value of EU imports.In 2023 inflation started to flatten out,which could partly explain the slowdown.Source:Rystad Energy research and analysis160102030405060201520162017201820192020202120222023CapexOpexFigure 14:Total European expenditures in of

125、fshore and onshore windBillion USD,nominalFigure 15:EU and non-EU European expenditures,split by onshore/offshore windBillion USD,nominalEuropean wind spending at$55 billion in 2023,EU contributes about$42 billionRystad Energy Our wind,our value March 2024Current status of the market0510152025303540

126、452015 2016 2017 2018 2019 2020 2021 2022 2023 2015 2016 2017 2018 2019 2020 2021 2022 2023EUNon-EUOnshore windOffshore windExpenditures related to the development and operations of onshore and offshore wind farms in Europe have grown from around$35 billion in 2015 to more than$55 billion in 2023,as

127、 shown in Figure 17.Most of this spending is directed towards capital expenditures(capex),with operational expenditures(opex)growing more steadily with the increasing installed base of capacity.Capex remained flat between 2021 and 2023.This is partly driven by limited growth in onshore wind capacity

128、 additions between 2022 and 2023.In addition,offshore wind capex ramp-up related to projects expected to come online in the 2024-2026 period has been offset by lower commissioning levels during 2022 and 2023 compared to the 2019-2021 period.Most of the spending has been related to wind farms located

129、 in the EU,amounting to approximately$42 billion in 2023,as illustrated in Figure 18.This is dominated by expenditures related to onshore wind,with countries like Germany,France,Sweden and Spain the main contributors in recent years.For offshore wind,Germany and the Netherlands have been the main en

130、gines of spending between 2015 and 2023.France has ramped up its investments significantly in recent years,with its first large-scale offshore wind farm completed in 2022,with additional projects to come online during 2024 and 2025.In European countries outside of the EU,offshore wind dominates spen

131、ding.This is primarily driven by the UK,which has grown its offshore wind capacity significantly over the last decade,making it the largest offshore wind nation in Europe with around 45%of the regions operational capacity.The UK is also the largest driver of onshore wind expenditures among non-EU na

132、tions.Norway had seen growing onshore wind expenditures from 2015 to 2019,but this has declined rapidly towards 2023 following the nations three-year licensing break imposed by the government in 2019 and uncertainty around tax policies,seeing new investments dry out.Source:Rystad Energy research and

133、 analysis17How are European policies tackling the wind energy industry challenges?Rystad Energy Our wind,our value March 2024Current status of the marketSource:Rystad Energy research and analysis18Increase wind energy development predictability The European wind industry has called for greater predi

134、ctability in the development of wind energy,which would make it easier for industry players to plan and invest in future projects,whether related to the supply chain,project development or infrastructure.The Renewable Energy Directive(RED)revision responds to this need by setting new European target

135、s,thereby shaping the long-term prospects for wind energy.It sets a binding target of 42.5%renewable energy in the EUs overall energy consumption by 2030 and is already being translated into national ambitions set out in the National Energy and Climate Plans(NECPs),which are still under revision.In

136、addition,the Wind Power Package announced in November 2023 focuses on improving the medium-term predictability of the project pipeline.Member states will be asked to publish medium-term auction schedules on a single EU digital platform and to commit to wind power deployment volumes for at least the

137、period from 2024 to 2026,in addition to their 2030 target.Accelerate and simplify permittingThe slowness and complexity of permitting procedures in Europe remain one of the main bottlenecks to project development in Europe.As a legacy of the Emergency Regulation on permitting,the revised RED has mai

138、ntained the cap on permitting procedures at two years,including all administrative and grid connection permits and environmental impact assessments.In addition,the EU is introducing Renewable Energy Acceleration areas where permits will be issued within one year for new projects and six months for r

139、epowering projects.This now requires member states to consider renewable energy projects to be an overriding public interest to expedite the resolution of any legal challenges.However,these new rules remain largely dependent on how well member states manage to implement them.The EU is already provid

140、ing tools to facilitate this implementation,notably through the Technical Support Instrument(TSI)Regulation,which offers technical expertise to speed up the granting of wind energy permits.The Wind Power Package also announced the launch of the Accele-RES initiative aimed at effective transposition

141、of the revised RED,through the digitalization of permitting processes and training of national authorities.Adapt power market rules and auction designWhile auctions have been an essential tool for developers to cope with recent cost and interest rate inflation,the industry has called for greater con

142、sistency in the design of national tenders across the EU.The aim is to limit the risk of non-execution or delay of projects and to support the risk of cost fluctuations.In addition,several concerns required a reform of power market rules to facilitate renewable energy integration and send better inv

143、estment signals.The Electricity Market Design(EMD)reform has recently been provisionally agreed upon and was one of the EUs first strong intentions on standardizing offtakes and updating power market rules.The last version calls for the promotion and harmonization of revenue schemes through long-ter

144、m contracts for difference(CfDs)and power purchase agreements(PPAs).In addition,it is reforming the power market on a timeframe granularity,aiming to better integrate the renewable variability risk.The Wind Power Package effectively addresses the indexation of auction prices on cost fluctuations and

145、 aims to launch a dialogue on a new framework of qualitative criteria that would maximize the execution rate of awarded projects.How are European policies tackling the wind energy industry challenges?Rystad Energy Our wind,our value March 2024Current status of the marketThe wind energy sector has be

146、en high on the agenda of the EU institutions in 2023.The 2022 energy crisis combined with the growing European supply chain reliability on third countries have been catalyzers to the discussions.Below is an updated status on current challenges and how European policies are aiming to tackle it.Source

147、:Rystad Energy research and analysis19Source:Rystad Energy research and analysisHow are European policies tackling the wind energy industry challenges?Rystad Energy Our wind,our value March 2024Current status of the market20Support supply chain expansionThe sovereignty of the European energy transit

148、ion supply chain has been a major topic in 2023.The Green Deal Industrial Plan initiated a series of measures and policy packages aimed at securing the local industry for components and raw materials used for renewable energy and technologies,such as hydrogen electrolyzers and carbon capture and sto

149、rage.Initial discussions were aimed at defining targets for components local manufacturing and critical raw materials procurement.The Net Zero Industry Act(NZIA),having recently reached a provisional agreement,defined a 40%target for domestically produced clean technology components by 2030.The Crit

150、ical Raw Materials Act(CRMA)defined minimum self-reliance targets in terms of the annual consumption of so-called critical raw materials:10%for extraction,40%for processing and 25%for domestic recycling.In addition,it states that no more than 65%of the EU annual consumption of each strategic raw mat

151、erial at any relevant stage of processing should rely on a single third country.Secondly,the measures were oriented towards actions to reach those targets.The NZIAintroduces a streamlined permitting framework for relevant manufacturing plants,similar to the measures introduced for project developmen

152、t.In addition,the NZIA aims to orientate the demand from developers towards the local supply chain by defining auction criteria on components procurement origin.These criteria will have to be used in at least 30%of the volume auctioned every year per member state.Due to the expected growing need for

153、 skilled workers,to both support the supply chain and install renewable energy projects,the NZIA and the Wind Power Package are also introducing European frameworks for specialized training programs.While tailored financial incentives like the one introduced in the US Inflation Reduction Act were ex

154、pected but not implemented,the EU is proposing to facilitate access to funding.It involves the use of the EU Innovation Fund to finance parts of manufacturing plants,as well as leveraging on the European Investment Bank(EIB)to provide counter-guarantee mechanisms to facilitate access to private fund

155、ing.Support grid expansionThe grid,often referred to as the power system backbone,has been an under-addressed topic in recent years,despite rising concerns about its ability to absorb growing variable power generation.Three main concerns need to be addressed and require significant public support:th

156、e modernization of the existing grid to minimize curtailment,the expansion of interconnectors to facilitate supply and demand balancing,and the reduction of grid connection queues for renewable energy new projects.A long-awaited Grid Action Plan was announced by the EU with actional measures to supp

157、ort those challenges but remains to be implemented.The announced measures aim to streamline the permitting for cross-border infrastructures and projects identified as of common interest,to remove any administrative barriers.In collaboration with the ENTSO-E,a long-term planning of the required grid

158、capacity will be defined,to facilitate the introduction of tailored incentives.Also,through the EMD reform,the grid operators will be required to implement provisions for flexibility solutions,going beyond the simple use of fossil fuel power plants.How are European policies tackling the wind energy

159、industry challenges?Rystad Energy Our wind,our value March 2024Current status of the marketOverall,the EU has been introducing relevant measures to tackle key aspects of the ongoing challenges facing the wind industry.The past year has been pivotal,with permitting,sovereignty and standardization for

160、 the renewable energy industry key discussion topics at EU institutions,as well as at the national level.The predictability of the wind sector development is expected to be improved with the finalization of the member states NECPs.The permitting bottleneck has been tackled on paper,but 2024 will hav

161、e to convert the strong RED revision into successful national measures.The reform of the power market rules has been relevant while avoiding potentially risky major changes.An improvement could be to further involve storage in the discussions,as current divergences in revenue models across countries

162、 are leading to competitiveness issues.On the supply chain sovereignty,if key topics have been addressed,the lack of targeted financial support mechanisms combined with non-technology-specific targets remains criticized by the industry.2101020304050602018201920202021202220232024202520262027202820292

163、030Offshore windOnshore windLow ScenarioCentral Scenario2030 Targets ScenarioScenario introduction and comparisonNote:Scenarios do not consider any wind capacity installed in Ukraine,Bosnia and Herzegovina,Montenegro,Kosovo,North Macedonia,Russia and Albania between 2022 and 2030.Source:WindEuropeRy

164、stad Energy Our wind,our value March 2024ScenariosFigure 16:Annual installed wind capacity in Europe by scenario,2018-2030Gigawatts(GWAC)This report operates with three key scenarios.The high-and mid-case scenarios refers to WindEuropes 2030 Targets scenario(high)and Central scenario(mid).The third

165、is made specifically for this report to illustrate the theoretical downside and has been named the Low scenario.WindEurope 2030 Targets scenario:this is the most optimistic scenario used in this report.It represents a theoretical installation rate required to meet the REPowerEU targets defined in th

166、e revised EU Renewable Energy Directive(RED III)and the 2030 targets of non-EU countries-the UK,Turkey,Norway,Switzerland and Serbia.The installation rate begins at the installations level from 2023 and increases to a peak growth rate between 2026 and 2027,showing the expected ramp-up over the next

167、few years.Annual installations continue to grow after 2027,but at a slower rate(including an allowance for expected decommissioning),leading to the 2030 targets being met.WindEurope Central scenario:this lays out WindEuropes best estimate for installed capacity in Europe towards the end of the decad

168、e,including any likely political or economic developments that could affect installations.It considers the latest developments in EU regulation,national policies,announcements of signed power purchase agreements,project development timelines and the ability of wind developers to secure further capac

169、ity in upcoming auctions and tenders.Low scenario:this assumes a zero-growth case,where annual installed capacity stays at 2023 levels from 2024 through 2030.It is a theoretical scenario,ignoring firm,ongoing developments that should ensure growth,especially in the near term,but aims to serve as a r

170、eference to the“cost of inaction”through the report.2216.714.515.118.723.929.633.435.035.92.53.85.68.412.716.919.721.121.7010203040506070202220232024202520262027202820292030Onshore windOffshore windWindEurope 2030 Targets scenarioNote:Excludes Ukraine,Bosnia and Herzegovina,Montenegro,Kosovo,North M

171、acedonia,Russia and Albania.Source:WindEuropeRystad Energy Our wind,our value March 2024ScenariosFigure 17:Annual installed wind capacity in Europe,WindEurope 2030 Targets scenarioGigawatts(GWAC)WindEurope reports about 274 GW of installed wind power capacity in Europe at the end of 2023,including n

172、early 221 GW in the EU.The WindEurope 2030 Targets scenario combines both the ambitions set in REPowerEU and different national targets for countries outside the EU.The REPowerEU ambitions,set in the face of the 2022 energy crisis,have been revised in the latest EU Renewable Energy Directive.It is n

173、ow aiming for a binding target of at least 42.5%of renewable energy in the overall consumption,combined with an indicative high target of 45%.According to the European Commissions assessments,the 45%high target would mean a cumulative installed capacity of 510 GW of wind power by 2030.However,WindEu

174、rope estimates that 440 GW would be sufficient for the EU to meet its target.While the Commissions assessment is based on capacity factors reflecting currently operating wind farms(27%for onshore wind and 32%for offshore wind),WindEurope uses capacity factors reflecting recent technological improvem

175、ents(35%for onshore and 45%for offshore wind).In the 2030 Targets Scenario,WindEurope applies the same methodology to the binding target of 42.5%.This translates the ambition into an installed capacity of just above 420 GW,met by installing on average more than 25 GW per year towards 2030.Regarding

176、the rest of Europe,the scenario considers the other European countries having made 2030 commitments for wind energy.This includes the UK,which has a 2030 target of 50 GW for offshore wind and 22 GW for onshore wind.Turkey has also set a wind energy target of 18.1 GW by 2030,assumed to be only onshor

177、e.While Norway has not yet set a 2030 target,WindEurope estimates 12 GW of installed capacity by 2030.Serbia has set a target to increase installed wind power capacity tenfold by 2030,which would suggest a target of 3.5 GW,according to WindEurope.Finally,WindEurope estimates that Switzerland would n

178、eed to have reached 240 MW of installed capacity by 2030 to be on track with its 2035 target of 1.2 TWh generated by wind.2316.714.516.120.922.625.127.026.627.62.53.85.06.78.28.410.423.831.40102030405060202220232024202520262027202820292030Onshore windOffshore windWindEurope Central scenarioNote:Excl

179、udes Ukraine,Bosnia and Herzegovina,Montenegro,Kosovo,North Macedonia,Russia and Albania.Source:WindEuropeRystad Energy Our wind,our value March 2024ScenariosFigure 18:Annual installed wind capacity in Europe,WindEurope Central scenarioGigawatts(GWAC)Contrary to the Targets scenario,its Central scen

180、ario represents the most likely or expected outlook for European wind capacity build-up through 2030.In the Central scenario,WindEurope also anticipates wind installation in Europe(offshore and onshore combined)to surpass 50 GW per year by the late 2020s,although the build-up in the annual market si

181、ze is expected to be slower in the next five years.The difference between the 2030 Targets and the Central scenario is particularly large in the 2027-2028 period when annual wind capacity additions average 37 GW per year in the Central scenario and 50 GW per year in the 2030 Targets scenario.On a cu

182、mulative capacity basis,the Central scenario is associated with 260 GW of wind capacity additions in 2024-2030,which is 12%lower than the cumulative capacity requirements of the 298 GW imposed by the 2030 Targets Scenario for the same period.We note that in relative terms,the Central scenario featur

183、es a more conservative outlook for onshore than for offshore wind.For onshore wind,cumulative capacity additions over the 2024-2030 period are 166 GW,versus 191.5 GW in the 2030 Targets scenario.In turn,for offshore wind,the difference between the 2030 Targets and Central scenarios is only 10%:106 G

184、W installed in the 2030 Targets scenario and 95 GW installed in the Central scenario(2024-2030).Throughout the remainder of the report,we analyze the impact of the European wind sector performing on the Central scenario rather than the 2030 Targets scenario across various economic,job market,energy

185、security and environmental performance indicators.It is reasonable that certain negative implications are anticipated,but the significance of these implications is sometimes immaterial as the Central and 2030 Targets scenarios are not that far apart.Hence,we frequently reference the hypothetical Low

186、 Scenario with a much more conservative wind market outlook to illustrate the severity of negative implications for Europe if the wind outlook degrades considerably.24Up to 50 billion per year difference between 2030 Targets and Low scenariosRystad Energy Our wind,our value March 2024Cost of inactio

187、n SummaryTable 2:Assessment of European wind scenarios across energy security,job market,economic growth and nature dimensions in 2024-2030Performance Dimension2030 Targets ScenarioSlight Underperformance(Central Scenario)Severe Underperformance(Low Scenario)Cost of Inaction(Difference between Low a

188、nd 2030 Targets)Energy Security203 Bcm of fossil fuel imports avoided due to wind energy generation in 2030Expected economic savings of 76 billion EUR per year in 2024-2030190 Bcm of fossil fuel imports avoided due to wind energy generation in 2030Expected economic savings of 73 billion per year in

189、2024-2030139 Bcm of fossil fuel imports avoided due to wind energy generation in 2030Expected economic savings of 63 billion per year in 2024-203064 Bcm of extra fossil fuel imports in 203013 billion per year economic loss in 2024-2030.Job Market564,000 people employed in European wind sector in 203

190、056%increase in European wind job demand between 2023 and the 2024-2030 average.532,000 people employed in European wind sector in 203041%increase in European wind job demand between 2023 and the 2024-2030 average.320,000*people employed in European wind sector in 2030Relatively flat European wind j

191、ob demand in 2023-2030 period.240,000European wind jobs lost in 2030Opposite trend in the labor demand for the sectorEconomic GrowthWind Energys direct contribution of 53 billion to European GDP in 203050%increase in direct contribution to GDP between 2023 and the 2024-2030 averageWind Energys direc

192、t contribution of 49 billion to European GDP in 203046%increase in direct contribution to GDP between 2023 and the 2024-2030 averageWind Energys direct contribution of 32 billion to European GDP in 203010%increase in direct contribution to GDP between 2023 and the 2024-2030 averageLost direct GDP co

193、ntribution of 21 billion in 2030Stagnation in GDP contribution rather than the continuous increase from the wind sectorNature299 million tonnes of lifecycle carbon dioxide emissions avoided by average annual installation wind vintage in 2024-2030Annual value of 28.1 billion for avoided emissions.262

194、 million tonnes of lifecycle carbon dioxide emissions avoided by average annual installation wind vintage in 2024-2030Annual value of 24.1 billion for avoided emissions.128 million tonnes of lifecycle carbon dioxide emissions avoided by average annual installation wind vintage in 2024-2030Annual val

195、ue of 13.2 billion for avoided emissions.1.2 Gt of incremental lifecycle emissions due to lower wind activity in 2024-2030.15 billion per year impact on EU ETS spending in 2024-2030.*Job market modeling for Low Scenario is based on WindEuropes independent assessmentSource:Rystad Energy research and

196、analysis25Figure 19:European power demand outlookTerawatt-hours(Twh)European power consumption could increase by up to 850 TWh by 2030Rystad Energy Our wind,our value March 2024Energy securitySource:Rystad Energy PowerCubeEuropean power demand has experienced stagnation at around 2,900-3,100 TWh per

197、 year since 2010 as energy efficiency and deindustrialization trends have offset increased penetration of electrification in the residential and C&I sectors,along with an early increase in electricity demand from electric vehicles.As of 2023,C&I becomes the dominant consumption sector accounting for

198、 approximately 2,000 TWh of annual use on the continent.The residential sector consumes about 800 TWh per year,while transportation accounts for the remaining 95 TWh.Looking at the three major established sectors,we anticipate baseline European power consumption to remain relatively flat at approxim

199、ately 2,900 TWh per year through 2030.Energy efficiency and deindustrialization trends are expected to remain prevailing factors pushing C&I electricity consumption down by about 6%between 2023 and 2030.Nevertheless,increases in residential consumption from 800 to 875 TWh per year and power use by t

200、ransport(from 95 to 260 TWh)are expected to offset the C&I decline.In addition to the baseline established consumption sectors,two new sources of electricity demand in Europe might emerge by 2030:Accelerated electrification and rooftop solar penetration in C&I.Electricity demand from green hydrogen

201、production on the continent(10 million tonnes per annum domestic production target for 2030).While both upside segments remain highly uncertain,we note that each of them can generate a staggering 380-450 TWh per year of additional demand in 2030.The magnitude of green hydrogen upside is directly cor

202、related with wind capacity additions,as a significant portion of European green H2 projects assume hydrogen production during wind curtailment periods.The significance of green hydrogen for future electricity demand,if Europe pursues its targets consistently,comes as a shock.Hence,we provide additio

203、nal details and outlook for this new sector on the next page.1,5002,0002,5003,0003,5004,000201920202021202220232024202520262027202820292030 Green H2 upside C&I upside(electrification)Transport Residential C&I baselineUp to 850 TWh of new power demand by 203026Figure 20:Current green hydrogen pipelin

204、e in Europe and REPowerEU targets for 2030Million tonnes per annum(Mtpa)Understanding significance of green hydrogen ramp-up on European power demandRystad Energy Our wind,our value March 2024Energy securityAmong power demand sectors presented on the previous page,green hydrogen production is the le

205、ast certain and often the least understood.Based on pilot and commercial-scale electrolysis hydrogen projects announced in recent years,European green hydrogen production capacity might reach 8.7 million tonnes per annum(tpa)by 2030.More projects with realistic startup dates before 2030 will likely

206、be announced in 2024-2025.On the other hand,it is also likely that many of the already announced projects will face delays or complete cancelations and the actual European production capacity for green hydrogen will end up lower than 8.7 million tpa.Nevertheless,REPowerEU includes an ambitious targe

207、t of 20 million tpa of green hydrogen consumption by 2030,of which 50%,or 10 million tpa,should be produced domestically in Europe.European policymakers took major steps in 2023 to introduce an appropriate policy framework that incentivizes project developers to pursue green hydrogen initiatives.The

208、 maturation of policies and overall business case for green hydrogen in Europe is expected to continue in 2024-2025.Many green hydrogen projects aim to rely directly on wind power during peak generation hours,while other project developers plan to leverage solar or hybrid solar and wind generation s

209、ources.Based on the current project pipeline and expected average electrolyzer efficiency of 52 kilowatt hours(kWh)per kilogram(kg)in 2030,we estimate that green hydrogen production might require a staggering 450 TWh of electricity in 2030.Based on the current project pipeline and expected improveme

210、nts in electrolyzer efficiency towards 45 kWh per kg by 2050,we estimate electricity demand of at least 700-800 TWh from green hydrogen production in 2050.Figure 21:Clean hydrogen supply project pipeline in Europe by production methodMillion tonnes per annum(Mtpa)0 5 10 15 20 252020 2022 2024 2026 2

211、028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 Green(announced in 2023)Green(pre-2023)Blue(announced in 2023)Blue(pre-2023)2030 8.7 mtpa,up to 450 TWh205016.2 mtpa,700-800 TWh8.7Domestic production 50%Hydrogen import30%Ammonia import 20%02468101214161820Current green pipeline(Europe)Targ

212、ets set for 2030+11.3 Mt+1.3 MtSource:Rystad Energy research and analysis27Figure 22:European power consumption and power mix in 2030(typical year)TWh per dayWind to account for 35%of European power mix in the 2030 Targets scenarioRystad Energy Our wind,our value March 2024Energy securityIn the maxi

213、mum upside scenario(with contributions from accelerated C&I electrification and green hydrogen production),European electricity demand might surpass 3,750 TWh per year in 2030.In terms of seasonal fluctuations,this will translate into a typical 10-12 TWh per day range in the first and fourth quarter

214、s of the year and a 9-10 TWh range for most of the summer months(in a typical year without material weather anomalies).For non-variable non-fossil power generation sources(predominantly,hydro,nuclear and bioenergy),we anticipate a maximum 5%growth in installed capacity between 2023 and 2030.With suc

215、h growth,these sources can generate a stable baseload of 3-4 TWh per day covering 33%of European power demand in 2030(1,234 TWh per year).If the wind industry delivers on the 2030 Targets scenario and brings the total(onshore and offshore)European installed capacity to 500 GW by 2030,wind energy is

216、expected to generate approximately 1,360 TWh in a typical year.Daily wind generation spikes above 5 TWh will not be unusual in 1Q and 4Q,while daily wind generation in the summer months is unlikely to surpass 3 TWh in 2030.The solar industry(centralized and distributed combined)is forecast to reach

217、about 550 GWAC of installed capacity by 2030 in the most optimistic scenario(almost delivering on REPowerEU target).Coupled with wind contributions,solar will compensate for undergeneration in the summer months,resulting in a fairly stable baseload of at least 3.5 TWh per day from solar and wind com

218、bined.In the target scenario and maximum upside on the demand side,about 1,000 TWh of electricity in Europe will still have to come from fossil sources.More optimistic capacity additions for non-fossil baseload sources are unlikely on a 78-year horizon,while potential outperformance of solar install

219、ations will have a limited impact on incremental generation in the first and fourth quarter of each year.As such,the potential underperformance of the target scenario by wind will inevitably result in increased fossil fuel consumption in 2030.02468101214 Baseload Non-Fossil Wind(2030 Targets Scenari

220、o)Solar(550 GW in 2030)Remaining fossil fuel demand Demand(Max Upside)1,234 TWh1,360 TWh464 TWh723 TWhSource:Rystad Energy research and analysis28Significant gap in fossil fuel imports between Low and Targets scenario in 2030Rystad Energy Our wind,our value March 2024Energy securityWind generation a

221、llowed Europe to avoid nearly 100 Bcm of fossil fuel imports in 2023(predominantly a mix of coal and natural gas).Annual avoidance of fossil fuel imports stood at approximately 73 Bcm in 2019 and has been growing steadily alongside the increase in power generated by wind.Considering the significant

222、increase in average natural gas and coal prices in 2021-2023 compared to historical levels,the value of economic savings due to avoided fossil fuel imports increased from around 12 billion-13 billion per year in 2019-2020 to a peak of more than 80 billion in 2022.The average annual economic savings

223、stood at about 39 billion in 2019-2023.The 2030 Targets scenario is accompanied by an increase in annual avoidance of fossil fuel imports to 200 Bcm by 2030,whereas the conservative Low case will only allow for about 140 Bcm avoidance in 2030.Using average natural gas and coal prices for European cu

224、stomers from 2023 for the remainder of the decade,we estimate annual economic savings due to fossil fuel import avoidance at approximately 76 billion per year in the 2030 Targets scenario.The savings are reduced to 63 billion per year in the Low case.Hence,in the Low scenario,Europe might need to sp

225、end an additional 90 billion on fossil fuel imports in 2024-2030 compared to the spending requirements under the 2030 Targets scenario.We note that this assumes average natural gas and coal prices from 2023 to be representative of the rest of the decade.In reality,the continent might find it difficu

226、lt to secure the needed supply of fossil fuels in the Low scenario,with such a development inevitably resulting in another shock in commodity markets(i.e.highly volatile prices for end consumers)in the next few years.Source:Rystad Energy research and analysis73807988961041111231381561812031021071131

227、19124132139050100150200201920202021202220232024202520262027202820292030 History 2030 Targets Scenario Central Scenario Low Scenario39637376010203040506070802019-2023Low(2024-2030)Central(2024-2030)2030 Targets(2024-2030)Figure 23:Avoided fossil fuel imports due to wind energy generationBillion cubic

228、 meters per yearFigure 24:Expected economic savings due to avoided fossil fuel importsBillion EUR per year29Figure 25:EU27+UK gas supply mix by source and demandBillion cubic metersEuropean natural gas balance to remain stretched through 2030Rystad Energy Our wind,our value March 2024Energy security

229、0100200300400500600201520202025203020352040 Demand-current pathwayDomestic productionNorwayRussiaLNG60%+of LNG is uncontracted Imports sourced from spot market and aggregatorsAny disruptions or shock cycles that result in increased demand for natural gas in continental Europe in the future are likel

230、y to cause new periods of significant spikes in commodity prices for end consumers(i.e.similar to the disruption experienced in 2022).Combined domestic natural gas production in the EU and the UK is on a gradual yet persistent decline and is expected to slow down from 77 Bcm in 2023 to 55 Bcm in 203

231、0.The current investment climate and policy direction are unlikely to result in any meaningful upside for domestic production.Norway is expected to remain a critical supplier of natural gas for continental Europe until the end of the decade delivering 110-120 Bcm per year.Similar to the outlook for

232、continental Europe,a significant upside to these supply contributions is unlikely due to limited pipeline capacity and the outlook for natural gas production in Norway.Algeria,Libya and Azerbaijan are set to keep delivering a flat 50 Bcm into the European market(combined).Hence,based on the current

233、pathway for natural gas demand,Europe is expected to remain dependent on liquefied natural gas(LNG)imports,which increased from 95 Bcm in 2021 to 160 Bcm per year in 2022-2023.The current pathway involves a further increase to 180 Bcm in 2025-2026 with a gradual decline towards 150-160 Bcm by 2030.I

234、n the scenario where wind energy fails to deliver on the target case,increased fossil fuel imports will most likely lead specifically to the increase in LNG imports.Source:Rystad Energy research and analysisHistoryForecastAlgeria30Figure 26:US Planned LNG projects subjected to non-free trade agreeme

235、nt license approvalFuture growth potential of the biggest LNG swing producer is at riskRystad Energy Our wind,our value March 2024Energy securityWhen it comes to LNG imports,the US has emerged as the most important strategic partner of Europe and a“swing”producer of LNG since 2022.The US exports of

236、LNG to Europe increased from 19 million tpa in 2021 to 49 million tpa in 2022 and edged higher in 2023 at 53 million tpa.The flows were partially redirected from Asian markets amid short-term market disruptions,though this transformation could also be viewed as structural optimization of global LNG

237、flows with more US LNG flowing to the epicenter of demand with the lowest transportation costs from the US.Significant regasification capacity has been added in Europe since 2022,potentially allowing for an even higher level of US LNG imports should such a need emerge in the future.Having said that,

238、in the next European natural gas shock cycle,it is the supply side of the equation that might become a bottleneck(rather than import capacity).The recent announcement by the Biden administration to impose a temporary halt on approving new US LNG projects has stunned both domestic and global markets,

239、especially as shipments of the fuel have begun playing an oversized role in feeding demand in Europe and elsewhere.In the short term,the pause disrupts project timelines and investor confidence,potentially delaying FIDs for facilities such as US developer Venture Global LNGs CP2 project in Cameron P

240、arish,Louisiana.Yet,the long-term consequences loom larger,with ripple effects expected to resonate through global LNG supplies well beyond 2028.The Biden administrations decision has induced nervousness among future LNG customers.US LNG has been vital to European energy security,as the continent ru

241、shed to phase down Russian pipeline supplies.With that said,accelerated wind energy deployment is critical for European energy security and autonomy as it reduces its dependence on US LNG imports and lowers natural gas demand in general.Figure 27:Global LNG import volume from the USMillion tonnes pe

242、r annum(Mtpa)StatusProjectOperatorCapacity(million tpa)Original Approval ExpiryExtension ExpiryFID Approval Year(Estimate)Pre-FIDCameron Train 4Sempra Energy615 Jul 20165 May 20262025Commonwealth LNGCommonwealth LNG8.4Under Review2026CP2Venture Global19.8Under Review2024(T1-9)2027(T10-18)Corpus Chri

243、sti Midscale T8-9Cheniere Energy3.0Under Review2024Delfin FLNGDelfin LNG6.51 Jun 20242024(T1)2026(T2)Fast LNGNew Fortress Energy1.4Under Review2027Freeport Train 4Freeport LNG5.128 May 201928 May 20262025Lake Charles LNGEnergy Transfer1016 Dec 202516 Dec 20252027Sabine Pass ExpansionCheniere Energy1

244、9.5N/A2026(T1),2028(T2),2030(T3)Port Arthur Phase IISempra Energy13.5Under Review202540%1217194953132035192202040608010020192020202120222023EuropeAsiaAmericasMiddle EastSource:Rystad Energy research and analysis31Figure 28:European index power spot price(left)*and Title Transfer Facility(TTF)gas spo

245、t price(right)EUR per megawatt-hour(MWh)Cost of fossil-fueled power generation remains the main driver for power pricesRystad Energy Our wind,our value March 2024Energy security*European power index is a simple average of daily spot prices in Germany,France,the UK and Italy.Data displayed as 15-day

246、floating average for both seriesSources:Rystad Energy PowerCubeNatural gas power generation has played a key role in the European power mix and is expected to remain a major source of energy supply in the medium term.The growth in wind and solar generation across Europe will gradually start displaci

247、ng fossil-fueled power generation,but as long as gas,and to some extent coal,remain in the mix it will continue to have a strong impact on the power market in general,and prices in particular.Renewable power in Europe has grown strongly over the past decade currently representing more than 45%of the

248、 total supply when including sources like hydro,geothermal and biofuels.Renewable energy sources normally have a lower operational cost than conventional sources of supply meaning that they are on the lower end of the merit order.Despite the growing share of lower-cost renewable sources,gas and coal

249、 power generation continue to supply close to 30%of Europes electricity.In 2023,gas power supplied around 18%of Europes electricity and coal 12%.Fossil-fueled power generation has much higher operational costs than other sources of electricity due to the high cost of fuels and carbon in Europe,makin

250、g gas and coal generation the marginal sources of supply throughout the year.As a result,the operational expenditure of gas and coal power generation continues to be the main price setter for power prices across the continent.This is clearly visible when plotting average European power prices with T

251、itle Transfer Facility(TTF)prices,which is the main benchmark for natural gas prices in the region.During the energy crisis of 2022,the shortage of natural gas supplies in Europe made prices increase to a record level of more than 270 per MWh.Despite this,gas power generation continued to be needed

252、to meet energy demand and,therefore,power plant operators(and consumers)had to pay the high price to ensure enough supply.As Europe has diversified its natural gas and LNG supply,prices for both gas and power have gradually declined to more normal levels.0501001502002503000100200300400500600700Apr-2

253、1Jul-21Oct-21Jan-22Apr-22Jul-22Oct-22Jan-23Apr-23Jul-23Oct-23Jan-24European index power priceTTF gas price32Volatility in gas prices has a strong effect on power pricesRystad Energy Our wind,our value March 2024Energy securitySources:Rystad Energy PowerCubeEuropean power and gas prices have been ext

254、remely volatile over the past three years driven by fuel supply shortages and geopolitical tensions.Natural gas and power prices in Europe traded at normal levels of 20 per MWh and 60 per MWh,respectively,at the start of 2021.A steady increase in prices was initiated when Russia diminished gas pipel

255、ine exports to Europe from the end of 2021.The situation became even more extreme after Russias full-scale invasion of Ukraine in 2022 causing major disruptions in both gas and coal exports from Russia to the continent.European utilities had to replace pipeline gas with LNG,creating strong competiti

256、on with Asian markets for the fuel.This led gas prices to reach a historical high of more than 270 per MWh in the second half of 2022.Electricity prices followed the same trend,averaging almost 600 per MWh at the end of August.In 2023,the situation improved significantly as Europe quickly diversifie

257、d its gas supplies and accumulated enough in storage for the winter season.This helped gas prices normalize through the year and helped power prices across the region decline towards a more normal level of 100 per MWh.In 2024,the situation continues to look stable.Figure 32,to the right,displays the

258、 strong correlation that exists between changes in gas prices and power prices in Europe.However,power prices tend to be more volatile than gas prices due to the strong intermittency of renewable energy sources,specifically wind power.With strong wind generation changes throughout the day,it will ge

259、nerally be gas power plants providing flexibility to ensure a well-balanced system.In the medium term,gas power is likely to remain the main source of flexibility across Europe,playing a key role in providing energy security.The region already has a large gas power generation fleet and gas importing

260、 storage and distribution network.However,with the increasing availability of alternative sources,such as batteries and pumped hydro,the use of gas will decline in the longer term,and the volatility in power prices should also be reduced.Figure 29:Weekly changes in power(X-axis)and gas prices(Y-axis

261、)in 2023Percentage(%)-80%-60%-40%-20%0%20%40%60%80%100%-100%-80%-60%-40%-20%0%20%40%60%80%100%R2=0.95330501001502002502018202020222024202620282030High-LowTTFBase CaseFigure 30:Historical monthly and forecasted yearly TTF natural gas pricesEuros per megawatt-hour(MWh)European power prices could stabi

262、lize as the gas market balancesRystad Energy Our wind,our value March 2024Energy securitySources:Rystad Energy PowerCubeThe winter of 2023-2024 served as a stress test for the European energy sector,with significant uncertainty remaining around the continents ability to meet its energy demand.TTF na

263、tural gas prices have been hovering well below 50 per MWh since the start of 2024,thanks to ample global LNG supplies and healthy underground gas storage levels.With Europe now better equipped with increased LNG import terminal capacity and long-term supply contracts,the outlook for natural gas pric

264、es is to trend towards a level below 30 per MWh by 2030.This is the general level required to cover the costs of importing LNG from the US which is likely to remain the main source of LNG supply beyond 2030.Despite a general expectation of a well-balanced market,Europe will continue to be exposed to

265、 natural gas price volatility.The increased dependence on LNG imports means that Europe will need to compete globally,mostly with Asian buyers,to ensure enough gas supplies.This competition is likely to lead to periods of higher prices,especially during winter and in the event of market shocks,such

266、as extreme weather or supply disruptions.Natural gas power generation will continue playing an important role in the European energy mix,providing base load supply and backing up the intermittency of wind power.Consequently,the cost of gas power generation will remain one of the main power price dri

267、vers.Assuming a gas price below 30 per MWh,average European power prices could trend towards a range of 40-80 per MWh in 2030.As the share of renewable energy continues to grow in Europe,the effect that gas prices have on the power market will gradually be diluted.During peak renewable generation ho

268、urs,gas generation could decline significantly reducing the number of hours where gas generation will set the price.However,during peak demand hours,gas power plants will play an important role and will continue to be the main price setters.Historical ForecastFigure 31:Historical and forecasted mont

269、hly NW Europe power pricesEuros per megawatt-hour(MWh)0501001502002503003504004505002018202020222024202620282030High-LowNW EuropeBase CaseHistorical Forecast34The European wind job market could reach 564,000 FTEs by 2030Rystad Energy Our wind,our value March 2024Job marketSource:Rystad Energy resear

270、ch and analysis,WindEurope-2030 Wind Energy Jobs Projections(2023);February 2024Under the WindEurope 2030 Targets scenario,wind energy will be responsible for around 336,000 jobs in Europe by the end of 2024,which could increase to about 564,000 full-time employees by the end of the decade.As the 20

271、30 Targets scenario assumes a quick ramp-up of onshore wind,most of the job creation will be linked to this sector.Additionally,the 2030 Targets scenario still sees a three-fold increase of offshore wind capacity between 2024 and 2030,ramping up more rapidly from 2026 onwards.Consequently,offshore w

272、ind will start to contribute more towards the total jobs in Europe as more and more offshore capacity comes online.The WindEurope Central scenario assumes 532,000 full-time employees by the end of the decade.As offshore capacity is expected to ramp up more quickly in the Central scenario,the average

273、 jobs required per GW across onshore and offshore wind start to converge towards the 2030 Targets Scenario from 2026.The Central scenario represents an overall risk of 30,000 jobs compared to the 2030 Targets scenario,but when comparing onshore and offshore wind,the Central scenario results in an ad

274、ditional 20,000 offshore FTEs,whereas onshore results in a reduction of 50,000 onshore FTEs.3364054544784985315640100200300400500600201920202021202220232024202520262027202820292030WindEurope FTEs(reported)Central Scenario2030 Targets ScenarioHistoricalForecastFigure 32:Full time equivalent(FTE)by sc

275、enario,EuropeThousand FTEsFigure 33:Full time equivalent(FTE)in Europe in 2030 by scenarioThousand FTEs532564510520530540550560570Central Scenario2030 Targets Scenario35Steep increase in wind job demand is driven by manufacturingRystad Energy Our wind,our value March 2024Job marketSource:Rystad Ener

276、gy research and analysis,WindEurope-2030 Wind Energy Jobs Projections(2023);February 2024Under the 2030 Targets scenario and the Central scenario,manufacturing and installation emerge as the two key job sectors for onshore and offshore wind.Both the 2030 Targets Scenario and the Central Scenario see

277、 annual capacity additions step up significantly by 2026.Thus,manufacturing will see job demand step up quickly from 2024 onwards to meet the needed additions from mid-decade and beyond.To meet the targets for capacity additions,the manufacturing capacity must be commercially available before the ca

278、pacity additions are installed,representing a risk for job creation under both the Central and 2030 Targets scenarios.The average installed turbine sizes for onshore and offshore wind are set to increase significantly towards 2030,representing a risk to manufacturing capabilities and job creation.La

279、rger turbines come with larger tower heights and rotor blades,creating problems for the manufacturing facilities that were set up previously to manufacture much smaller turbines.Thus,existing manufacturing capacity might struggle to meet the demands of larger turbine sizes as they have not been buil

280、t to support such size increases.As turbine manufacturing represents more than 70%of the demand for wind manufacturing jobs in 2025 already,decommissioning of turbine manufacturing facilities can become a risk to job creation.Although some newer facilities might be able to scale up their manufacturi

281、ng by increasing facility size,a significant portion of manufacturing capabilities will have to be replaced to meet the demand for larger sizes.Although both the 2030 Targets scenario and the Central scenario represent demand for upwards of 290,000 FTEs in manufacturing by the middle of the decade,t

282、his demand hinges on European manufacturing being able to step up sharply before capacity additions start to ramp up by 2026.01002003004005006002024202520262027202820292030ManufacturingInstallationPlanningO&MFigure 34:Full time equivalent(FTE)by job type under 2030 Targets scenario,EuropeThousand FT

283、Es36Figure 36:Average turbine sizes by energy sourceMegawatts(MW)Increased sizes and efficiency will drive increased output per workerRystad Energy Our wind,our value March 2024Job marketSource:Rystad Energy research and analysis,WindEurope-2030 Wind Energy Jobs Projections(2023);February 2024Under

284、the WindEurope scenarios,the most important driver of job creation is manufacturing.From early on,the European wind sector has been strong,hosting the manufacturing facilities of leading suppliers such as Vestas,GE and Siemens Gamesa.The WindEurope 2030 Targets scenario will see onshore wind as the

285、main driver of manufacturing jobs through 2030,as annual capacity additions are set to reach 35 GW,whereas offshore wind is expected to contribute with approximately 16 GW.In total,this represents a 185%increase in annual wind capacity additions from 2024 to 2030,resulting in significant increases i

286、n manufacturing jobs.However,as turbine capacity increases both for onshore and offshore wind,the total expected full-time employees required per GW of capacity additions is set to decrease by 6,000 jobs per GW under the 2030 Targets scenario.This is primarily driven by expectations of increased eff

287、iciencies associated with lower maintenance requirements,less cabling and corresponding foundations,leading to an expected reduction of 26%in FTEs per doubling of turbine capacity for onshore turbine manufacturing,and an expected 36%reduction for offshore turbine manufacturing.Despite these reductio

288、ns,turbine manufacturing jobs are still expected to see a 50%increase from 2024 to 2030 under the 2030 Targets Scenario,primarily driven by a steep increase in capacity additions across onshore and offshore wind.Offshore foundation manufacturing also remains a large driver of jobs in Europe towards

289、2030.Although monopile foundations remain the leading foundation type,the share of floating foundations is expected to increase towards the end of the decade.Larger turbine capacities also require larger foundations,resulting in longer manufacturing times.This could see jobs resulting from foundatio

290、n manufacturing increase by 60%from 2024 to 2030 under the WindEurope 2030 Targets Scenario.0501001502002503003502024202520262027202820292030TurbineFoundationOffshore substationOther4.85.05.25.45.75.96.210.410.911.612.313.114153.06.09.012.015.018.02024202520262027202820292030OnshoreOffshoreFigure 35

291、:Forecasted full time equivalent(FTE)manufacturing jobs in Europe,2030 Targets ScenarioThousand FTEs37Lack of European turbine manufacturing capacity puts job creation at riskRystad Energy Our wind,our value March 2024Job market*Assumes discrepancy between blade manufacturing and annual capacity add

292、itions under WindEurope scenariosSource:Rystad Energy research and analysis,WindEurope-2030 Wind Energy Jobs Projections(2023);February 2024One of the potential bottlenecks to the 2030 Targets and Central scenarios is European turbine manufacturing capacity.The Net Zero Industry Act(NZIA)aims to str

293、engthen European manufacturing and ensure that wind energy is“made in Europe”,by establishing pre-qualification and non-price award criteria when selecting winning bids in auction rounds.Although this will incentivize a ramp-up of European wind manufacturing,there is still a long way to go for suppl

294、y to meet the demand from the WindEurope 2030 Targets scenario and the Central scenario.As of February 2024,the announced annual manufacturing capacity in Europe for wind is estimated at 26.2 GW for blades and 29.8 GW for nacelles.For offshore wind,nacelle manufacturing capacity needs to ramp up by

295、13 GW to meet the capacity required for the 2030 target,while blade manufacturing capacity must ramp up by 8 GW.For onshore wind,blade capacity must increase by 23 GW and nacelle capacity by 16 GW.In the case that European auctions require all developers to meet the supply chain resilience criteria

296、around European technology,almost 72%of the job creation resulting from onshore turbine manufacturing and 60%of offshore turbine manufacturing is at risk due to the discrepancy between available turbine capacity and capacity required under the 2030 Targets scenario.Should developers need to meet the

297、 same prerequisites under the Central scenario,63%of job creation resulting from both onshore and offshore turbine manufacturing remain at risk due to the discrepancy between available turbine capacity and capacity required under the Central Scenario*.Both these projections assume that there are no

298、supply and demand bottlenecks in certain turbine size groups.However,nearly all demand for capacity additions(particularly for offshore wind)represents larger turbine segments,meaning that the risked job creation could widen even further due to a lack of available manufacturing capacity for larger s

299、izes.This highlights the importance of quickly stepping up the European manufacturing capabilities for wind turbines.2224.225.324.622.424.324.326.226.226.226.226.226.20510152025302018201920202021202220232024202520262027202820292030Onshore windOffshore windBoth onshore and offshore24.023.527.827.828.

300、029.829.829.829.829.829.829.829.8051015202530352018201920202021202220232024202520262027202820292030Onshore windOffshore windBoth onshore and offshoreFigure 37:Blade manufacturing capacity,EuropeGigawatts(GW)Figure 38:Nacelle manufacturing capacity,EuropeGigawatts(GW)38European manufacturing capacity

301、 must increase to meet targetsRystad Energy Our wind,our value March 2024Job marketSource:Rystad Energy research and analysis,WindEurope-2030 Wind Energy Jobs Projections(2023);February 202420.827.136.646.653.156.057.516.316.316.316.316.316.316.301020304050602024202520262027202820292030Onshore windO

302、ffshore windBoth onshore and offshore2030 Targets ScenarioLow scenarioBased on the announced manufacturing capacity for bothonshore and offshore wind turbines,blades remain the most significant bottleneck in European wind turbinemanufacturing.Currently,up to 90%of commissioned windprojects have inst

303、alled European-manufactured windturbines.However,under the 2030 Targets scenario,theannounced manufacturing capacity will not be able to meetthe demand.The blade manufacturing capacityavailable for 2025 already lags behind the targeted annual capacityadditions.This means that job creation resulting

304、from the2030 Targets scenario could be at risk from next year ifadditional manufacturing capacityis not added in time.By 2030,Europe will lack as much as 30 GW of annualmanufacturing capacitycompared to the requirements of the2030 Targets scenario,risking as much as 72%of onshore and 60%of offshore

305、job creation,assuming the share of European versus global wind turbine manufacturing workers staysconstant through the decade.To avoid losses in job creationand to step up European manufacturing capacity to meetdemand under the 2030 Targets scenario,the announcedEuropean turbine manufacturing capaci

306、tyhas to increase by an average of 20%year-on-year between 2024 and 2030,as well as keep up with the demand for increased turbine sizes.However,the already announced global wind turbinemanufacturing capacitywill amount to 178 GW by 2030.Thus,sourcing turbines from non-European manufacturersmight be

307、one way to meet the demands of the 2030 Targets Scenario,assuming there are no supply and demand issues in acquiring larger turbines.However,depending on the share of demand being met by non-European supply,the outlook for European wind-related jobs would then shift from the 2030 Targets Scenario tr

308、ajectory towards the Low Scenario,as job creation would move outside of Europe.Figure 39:Turbine manufacturing capacity,annual capacity additions,EuropeGigawatts(GW)39Wind power generation set to more than double by 2030,if targets are reachedRystad Energy Our wind,our value March 2024Economic Growt

309、hFigure 40:Europe,onshore and offshore wind net generation by year and by scenarioTerawatt-hours(TWh)The EU target defined in the Renewable Energy Directive aims for a contribution from renewable energy of at least 42.5%of overall energy consumption.This would be achieved by significant capacity add

310、itions outlined in the 2030 Targets Scenario,but also by gains of efficiency in the output of newly commissioned turbines.In Europe,the average capacity factors for onshore wind generation reached an average of 22%in 2023,compared to an average of 38%for offshore wind.Due to larger and more efficien

311、t turbines,those European figures are expected to reach about 25%by 2030 for onshore wind and 40%for offshore wind.Over the decade,these capacity factors are expected to gradually increase,not only due to the learning curve of turbine performance but also because the marginal effect of low generatio

312、n in the first year of a newly commissioned plant will become less and less significant.In the 2030 Targets scenario,this leads to a forecast overall wind generation of 1,360 TWh in 2030,about 2.5 times the generation of 2023.While onshore wind is expected to remain the largest share of the generati

313、on,offshore wind will see a stronger increase,especially from the second part of the decade when the offshore wind output is expected to more than triple.In the Low scenario,the yearly capacity additions will remain at the conservative level of what was recorded in 2023.This not only means a lower a

314、mount of capacity but also a less productive turbine fleet,on average.Capacity factors are also expected to remain conservative,with limited growth from 2023 levels.Therefore,by 2030,the overall wind generation in the Low Scenario is not expected to exceed 1,000 TWh,with a forecast 825 TWh.In such a

315、 scenario,Europe would face a dilemma between limiting its power demand growth in favor of limiting emissions or feeding growing power demand with more fossil-fuel generation.5555936316697087467858245556106817779011,0451,1991,36002004006008001,0001,2001,4002015201620172018201920202021202220232024202

316、520262027202820292030Historical-Onshore windHistorical-Offshore windLow ScenarioCentral Scenario2030 Targets ScenarioSource:Rystad Energy research and analysis40Onshore wind developers to reach over 30 billion direct GDP contribution by 2030Rystad Energy Our wind,our value March 2024Economic GrowthF

317、igure 41:Europe 2030 Targets scenario,onshore wind generation gross revenue and revenue per generationBillion EUR,real(2023)EUR per megawatt-hour(MWh)Figure 42:Europe 2030 Targets scenario,onshore wind GDP direct contributionBillion EUR,real(2023)At the end of 2023,revenue from onshore wind power ge

318、neration reached an estimated 29 billion.The revenue was mainly based on offtake agreements contracted with government entities through auction processes,balanced with a relatively low share of merchant exposure.The trend for bidding prices started with high feed-in-tariffs in the early 2010s to inc

319、entivize and boost the first years of the onshore wind industry.This was followed by a drop in contracted prices from 2015 as governments assessed those agreements as too lucrative for developers compared with decreased costs.As discussed in the first section of this report,the recent inflation in c

320、omponent and financial costs has led to an uptick in the auction prices in 2023.These offtake contracts are generally designed to last between 10 and 20 years and are indexed to inflation depending on the country.This means that over time,as wind power generation increases,revenue per output becomes

321、 increasingly stable because of the weighting of the historical selling price.Thus,this metric reflects less and less the granular cost trends that can be reflected in auction prices.From another perspective,this means that as early as 2023,a significant proportion of onshore wind developers revenue

322、s in 2030 is already defined based on the year-to-date negotiated prices.In contrast,the increasing penetration of onshore wind generators on the spot market results in revenue volatility to some extent.Typically,the uptick in revenue per generation observed in 2022 is significantly due to the recor

323、d high power prices that year.In terms of GDP contribution,the revenue must be lowered by the opex related to the plant operation,which remain marginal.In 2022,onshore wind reached its historical peak in terms of GDP contribution,reaching about 25 billion due to the high power prices.Looking ahead,p

324、ower prices remain uncertain but are not expected to reach such high levels.Based on the 2030 Targets scenario,GDP contribution is expected to reach the same level as in 2022 only from 2027 and to reach 34 billion by the end of the decade.7573726966626884646060575554535202040608010001020304050607080

325、2015201620172018201920202021202220232024202520262027202820292030RevenueRevenue per generation1312141415151625191922232528313405101520253035402015201620172018201920202021202220232024202520262027202820292030GDP contributionSource:Rystad Energy research and analysis41The end of the decade will be pivot

326、al for the offshore wind developers contributionRystad Energy Our wind,our value March 2024Economic GrowthFigure 43:Europe 2030 Targets scenario,offshore wind generation gross revenue and revenue per generationBillion EUR,real(2023)EUR per megawatt-hour(MWh)Figure 44:Europe 2030 Targets scenario,off

327、shore wind GDP direct contributionBillion EUR,real(2023)Revenue from offshore wind generation has experienced steady growth,reaching a record in 2023 at 12.5 billion.Revenue sources from existing plants are largely tied to historical auctions,with limited spot market exposure.Going forward,this expo

328、sure is expected to remain limited,combined with a higher share of corporate PPAs.Historical offshore wind offtake agreements were significantly higher than those for onshore wind,aligned with the capex differences.Initially,bidding prices were closing at over 100 per MWh.Following a steep learning

329、curve and strong expectations of higher capacity factors from new turbines,weighted average bidding prices started to decrease below 70 per MWh from 2016.Bidding prices have been challenged,however,in the face of the component cost inflation observed in the last two years.The evolution of offshore w

330、ind revenue is less impacted than onshore wind by the weight of past agreements due to relatively lower commissioning in the last 10 years,compared to what is expected in the coming years.However,there is a significant lag between the auction year and the commissioning date,explaining the delayed de

331、crease in the revenue per generation.In the 2030 Target Scenario,revenue is expected to strongly increase due to the significant offshore wind capacity additions required to reach Europes ambitions.However,in terms of revenue per generation,there is a decreasing trend leading to less than 100 per MW

332、h from 2025.This is due to the auctions led in the late 2010s,where bidding prices reached levels averaging 60 per MWh.In terms of GDP contribution,opex is significantly higher for offshore wind plant operation than for onshore wind,despite an ongoing decreasing trend.While the offshore wind power g

333、eneration led to about 4 billion of GDP contribution in 2023,it is expected to more than double by 2030.The stronger increase is expected in the last two years of the decade,driven by over 20 GW of newly installed capacity each year in the 2030 Targets Scenario and an uptick in the associated offtake prices.1201241291311321331321231171089786797169670204060801001201401600510152025303520152016201720