New offshore wind turbines begin turning, but cash scarce -EWEA
* Regulatory uncertainty deters new investors
* Pension funds have provided innovative financing
BRUSSELS, July 12 (Reuters) - Around twice as many offshore wind turbines were added to the power grid in Europe in the first half of 2013 compared with a year ago, but financing for new projects has slowed, industry body the European Wind Energy Association said on Friday.
Offshore wind power is still in its infancy and its financing is a political issue as cash-strapped governments balk at the subsidies the industry says are necessary until economies of scale and streamlined processes can make it more competitive.
In the first half of this year, 277 new offshore wind turbines, totalling 1,045 megawatts were fully connected to the power grid, compared with 523.2 megawatts in the same period last year, EWEA said in a report published on Friday.
Germany's Siemens was responsible for the vast majority of this year's new connections, it added.
Total offshore capacity in Europe stands at 6,040 megawatts, spread over 58 wind farms in 10 countries, up from 4,336 megawatts in June last year.
The International Energy Agency said capital costs for offshore wind in Europe were between around 3.5 million euros ($4.48 million) per megawatt and 4.9 million per megawatt from late 2011 to early 2013.
Regulatory uncertainty is particularly marked in Britain, the world's leading offshore wind market, and in Germany, which analysts say needs offshore wind if it is to succeed in its Energiewende, or shift from nuclear power to renewable energy.
Ahead of elections in September, German Chancellor Angela Merkel has said she will reduce green subsidies, which have turned into an election issue as industry says they add to energy costs and undermine competitiveness when the United States is benefiting from a shale gas boom.
Britain is also changing its rules on electricity market financing.
"To attract investment to the sector, governments need to provide a stable regulatory framework," Justin Wilkes, director of policy at EWEA, said. He also called on the European Union, which is debating future energy and environment policy, to set a binding target for renewable energy for 2030.
Despite the uncertainty, 2013 has seen some innovative financing as pension funds have moved into the sector to help provide the massive initial capital investments needed for giant offshore turbines. (Reporting by Barbara Lewis; Editing by David Evans)
- Tweet this
- Share this
- Digg this