Market Trends of Germany Wind Energy Industry
Offshore Sector to Witness Significant Growth
- Germany is rich in wind power generation. Growing wind power plants in the offshore area is becoming a lucrative market due to higher wind speeds in comparison to onshore wind. Thus, offshore wind-based electricity generation is expected to witness significant growth.
- Also, the German government, coastal states, and transmission system operators (TSOs) have agreed on a plan to increase offshore wind development in the North and Baltic Seas and to raise the country's offshore installed capacity goal to 20 GW by 2030.
- According to the International Renewable Energy Agency, a significant increase in offshore wind energy capacity occurred over the past few years, rising from just 35 megawatts in 2009 to 8129 megawatts in 2022.
- In May 2021, a German multinational energy company called RWE and a company called BASF planned to invest USD 4.9 billion in Germany's offshore wind farms. As part of this, RWE intends to build a 2 GW offshore wind power plant by the year 2030. The project aims mainly to supply energy to BASF's Ludwigshafen chemical complex.
- Germany set a target to generate 65% of its power from renewable sources and planned to shut down its nuclear power plants by the end of 2022 and phase out coal power by 2038. The current growth projections for the offshore wind industry are not enough to reach this goal.In addition, the slowing of the onshore wind industry has become a major concern for meeting the renewable energy goal.
- According to Bundesverband WindEnergie e.V. (BWE), the amount of electricity made in the country from wind energy grew by 132% between 2013 and 2021, going from 52.7 TWh to 122.4 TWh.Of the electricity produced in 2021, around 26.1 TWh came from offshore wind power, and the remaining 96.3 TWh came from onshore wind power.
- Therefore, based on the above-mentioned factors, the offshore wind energy segment is expected to witness significant growth, in turn increasing the demand for the German wind energy market during the forecast period.
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Upcoming Projects and Investments Driving the Market Demand
- Germany was one of the leading wind energy markets, with around 66.31 GW of total installed capacity by the end of 2022, and wind energy had a total share of about 23% of German electricity production. The increasing investments in wind power projects have been providing a significant boost to the growth of the wind power sector.
- As the need for cheap, reliable, clean, and diverse sources of electricity grows, the government and utilities across the country are looking at wind power more and more as a solution. Moreover, with the country's unparalleled wind resources, there are ample opportunities to maximize the economic and environmental benefits associated with wind energy development.
- Additionally, Danish energy giant Orsted built an offshore wind farm in the German North Sea, where Google Inc. signed up to receive 50 MW of wind power in November 2021.The 12-year power purchase agreement will contribute to Google's commitment to operating all data centers with carbon-free energy by the year 2030.
- In June 2022, the German Parliament adopted a new onshore wind law, i.e., WindLandG, which aims to develop onshore wind-based power plants by a massive 10 GW a year starting from 2025. It's part of Germany's "Easter Package" of measures that enshrines the principle that the expansion of renewable energy is a matter of overriding public interest.
- Therefore, the increasing number of wind energy projects, coupled with the government's policies, are expected to drive the wind energy market in the upcoming years.
