On 24 October, the European Commission (the "Commission") presented a Wind Power Package to support the European wind power sector and improve its competitiveness.
Under the so-called "Fit for 55" package, Member States have already agreed in the revised Renewable Energy Directive to increase the share of renewable energy in the EU's total energy consumption to at least 42.5 % by 2030 (with the ambition to reach 45 %). The Wind Power Package consists of two parts: a wind power action plan and a communication on how to realise the EU's ambitions for offshore renewable energy. The proposal aims to pave the way for the realisation of the renewable energy targets through a significant increase in wind power capacity.
The Commission has presented the Wind Power Package because of the difficulties the European wind power sector has faced in recent years, such as uncertain demand for wind turbines, high inflation, rising raw material prices, shortages of both raw materials and skilled labour, and slow and complex permitting processes for wind power projects. Taken together, these developments have left wind power deployment well below the level needed to reach the 42.5 % renewable energy target by 2030. In light of this, the Commission has presented the following:
- Wind power permitting processes will be accelerated by promoting digitalisation and providing technical support to Member States. Under a new initiative, the so-called 'Accele-RES' initiative, a digital tool will be in place by the end of the year to support Member States in the permitting process. Moreover, as part of the same initiative, additional resources for training and technical support to national authorities will be added. The aim is to improve the ability of Member States to manage permitting processes.
- By the end of 2023, Member States must make concrete commitments on the expansion of wind power volumes for the period 2024-2026 and draw up plans focusing on renewables, in particular wind power, with a time horizon extending to 2040.
- Access to finance for wind power projects will be strengthened. The budget for financing green technologies under the Innovation Fund will be doubled to EUR 1.4 billion to stimulate the production of, among other things, wind turbines and their components. In future calls for proposals, wind power projects will be given high priority, and for project development support, wind power projects will be prioritised based on equal merit. In this context, advisory support focused on wind power will be available from the InvestEU Advisory Centre. With regard to State aid, it has already been announced that the rules in Chapter 2 of the amended Temporary Crisis and Transitional Framework for State Aid (TCTF) create a wider scope for Member States to support the wind power sector.
- Together with the European Investment Bank, the Commission is developing a specific guarantee tool for wind power companies to counter-guarantee banks' credit exposures to key suppliers in the wind power industry. The guarantee tool will be in place within the next six months. The aim is to mitigate the financial pressure experienced by wind power companies, as a result of inflation and interest rate increases.
- Skills development is strengthened, for example through training modules with materials to support the development of the skills necessary to maintain knowledge in the market. The initiative is particularly aimed at women, young people and the elderly. This will be complemented by measures to retrain and re-skill workers. The Commission is proposing, among other things, specific academies to be developed to meet companies' demand for skilled labour, with one academy specifically dedicated to the wind power industry. The aim is for each academy to train 100 000 students over a three-year period.
- Strengthening the competitiveness of European wind power companies and improving their access to foreign markets. The Commission is signalling that the TCTF may be extended (beyond 2025), giving Member States a better opportunity to take advantage of opportunities to support wind power development. Furthermore, the International Procurement Instrument may be used by the Commission to expand the market for European operators selling wind power related goods and services. In ongoing negotiations on international trade agreements, the Commission is also pursuing the inclusion of provisions on issues relevant to the wind power sector, including energy and raw materials. The aim is to reduce supply chain risks for wind power companies and strengthen strategic autonomy.
- To boost wind power deployment and manufacturing capacity in the EU, the Commission is calling on Member States and wind industry representatives to make voluntary commitments by the end of 2023 as part of an EU Wind Energy Charter. The aim is to rapidly implement actions by the Commission, Member States and industry. The Commission will work with Member States and industry to develop the exact commitments.
Protection against unfair trade practices which benefit foreign wind turbine manufacturers
A key element of the Action Plan is a call for EU wind power companies to co-operate with the Commission to monitor unfair practices favouring foreign wind turbine manufacturers. The Commission emphasises that, where justified, it will apply EU trade defence instruments, such as the anti-dumping and anti-subsidy regulations. Furthermore, wind power companies receiving foreign distorting subsidies may be subject to measures under the Foreign Subsidies Regulation ("FSR"). The Commission invites the industry to come forward with evidence of suspected unfair practices. The Commission also emphasises that it will make full use of the co-operation mechanism the Foreign Direct Investment ("FDI") Regulation to prevent possible threats to security and public order related to foreign investment in the EU wind power industry.
In its Communication on Offshore Renewable Energy, the Commission identifies the area as crucial to achieving the climate and energy targets set for 2030 and 2050, as well as reducing the Union's dependence on imported fossil fuels. Several measures and initiatives relevant for companies in the wind power sector are listed. Some examples are:
- The Commission will develop guidance on how to carry out cost-benefit analyses and allocate costs for cross-border marine networks and energy islands connecting several countries and offshore wind projects to facilitate co-operation between public authorities and investors and promote the development of offshore renewable energy.
- The Commission will promote the co-ordination of Member States' planning for offshore renewable energy talks at regional level in the framework of existing regional fora, such as the Trans-European Energy Networks (TEN-E), and strengthen co-operation in the framework of the High Level Groups. The aim is that this will provide greater predictability for commercial actors, increase the attractiveness of joint projects, and stimulate investment. The strengthened regional co-operation will also aim to particularly favour so-called hybrid projects, i.e. projects that connect offshore renewable energy to two or more Member States via a common electricity transmission link, which can also be used for electricity trading.
- The Commission will support research and innovation to develop new and improved technologies for offshore wind and ocean energy, in particular floating wind power, circular solutions, and advanced materials to ensure that the EU maintains its technological lead in this area. This will be done through the Horizon Europe framework programme, which has launched several projects and calls related to offshore renewable energy, such as floating wind power. The Innovation Fund also supports the development of renewable energy production, where the next call will be worth EUR 4 billion.
The Wind Power Package proposes several legislative measures to be adopted or prepared by the Commission in co-operation with Member States and other stakeholders. Some of the legal acts mentioned are the following:
- A dialogue between the Commission and Member States will result in a recommendation and guidance for Member States to improve, simplify and harmonise the design of tendering procedures for renewable energy.
- An implementing act for the Net-Zero Industry Act to incorporate best practices for the design of renewable energy tenders into EU legislation. The Net-Zero Industry Act, which aims to support EU industry in the transition to a net-zero emissions economy, is expected to be adopted by March 2024.
- An update of the Commission Recommendation to Member States on speeding up the permitting processes of renewable energy projects and the accompanying guidance, with additional guidance on issues such as repowering, simplification of environmental procedures or grid permits, to be adopted by April 2024.
- An analysis of cybersecurity risks relevant to wind power installations and related infrastructure including data protection aspects, in order to assess whether they could be exploited to harm economic security or security of electricity supply in the EU. The risk assessment work is intended to complement the existing security infrastructure, in particular the Network Code on Cybersecurity for Cross-Border Electricity Flows, which is planned to be adopted in the first quarter of 2024. The latter sets binding technical rules for the electricity network in the EU and aims to promote the integration of the electricity market in a way that enhances cybersecurity and reliability of electricity transmission. The Code is addressed to electricity network operators and electricity producers with the aim of clarifying minimum requirements and standards.
- A possible extension of the Temporary Emergency Regulation to speed up the permitting processes of renewable energy. The extension will be decided by the Commission in November 2023 following a review of the current regulation, which expires in mid-2024.
The Wind Power Package is an important step in promoting the EU's green transition. In addition to the measures taken in the energy sector in general to support the development of renewable energy, the Package puts forward specific measures for the wind power industry. The Commission's proposals are important for the commercial operators in the wind power sector for several reasons. It will increase predictability for wind power companies and speed up the permitting process. Member States' plans and commitments will be concretised, while major efforts will be made to increase spending and to promote the skills required by the wind power sector. Offshore renewable energy, in particular wind power, will be promoted through better planning and co-ordination. Through the Wind Power Package, the Commission seeks to support the industry to better plan investments, attract financing and capitalise on market opportunities.