North Sea countries and transmission system operators on Monday signed an agreement committing to advancing investment in offshore wind projects and expanding cleaner power interconnection.
The Joint Offshore Wind Investment Pact for the North Seas supports a goal set by the neighbors to reach 300 gigawatts (GW) of installed wind generation capacity in the North Seas by 2050, including 100 GW from cooperation projects.
The pact was signed by the governments of Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway and the United Kingdom, as well as electricity and transmission system operators, during the North Sea Summit in Hamburg, Germany.
Under the pact, the governments pledged to ensure “a more evenly distributed offshore wind tender pipeline between 2031 and 2040 across the North Seas contributing to a European installation capacity of up to 15 GW per year”, according to the official text published online by Germany’s Economic Affairs Ministry.
They also committed to crafting an Offshore Financing Framework for North Sea wind cooperation projects. The framework would “build on and strengthen existing instruments and processes such as the framework for trans-European networks for energy and the identification of projects of common interest and projects of mutual interest”.
The Offshore TSO Collaboration and project developers have agreed to implement cooperation projects with a combined capacity of 20 GW in the 2030s. The first of these would be identified by 2026, according to the pact.
The participating governments also pledged to improve their national regulatory frameworks “to increase investor certainty in cooperation projects, including cross-border liability schemes, connection and balancing schemes”.
The pact provides for an investigation by the participating European Union member states into “market arrangements for offshore hybrid projects to address hybrid-specific risks for generators”, read the text. “The UK is also committed to the development of the most suitable market arrangements for hybrid projects”.
The North Sea countries plan to introduce “targeted mechanisms such as cross-border and/or nationally implemented two-sided Contracts for Difference as well as Power Purchase Agreements (PPAs), including cross-border PPAs”, the pact said.
Meanwhile the industry side committed to reducing offshore wind development costs to ultimately reduce the levelized cost of electricity by 30 percent by 2040 compared to 2025 levels, the pact said.
Industry players agreed to “offer capital and capacity for investments to ensure an installation capacity of the derisked and committed 15 GW annually between 2031 and 2040 by mobilizing EUR 1 trillion ($1.19 trillion) of economic activity for Europe, hiring 91,000 people by 2031 reaching a total of 187,000 employees – 75 percent (140,000) of these will serve the North Seas Region – [and] investing EUR 9.5 billion in supply chain capacities by 2030”, the pact said.
Industry players also pledged to develop and commercialize needed offshore high-voltage direct current (HVDC) transmission technologies, as well as work out “pathways for harmonizing manufacturing standards together with electricity TSOs”.
Under the pact, industry players including the members of the Hydrogen Networks for the Northern Seas also agreed to “assess, on a case-by-case basis, for which future HVDC-converter stations H2-readiness is proportionate and cost-effective”.
“Where justified, such stations could be designed in a way that keeps open the possibility of connecting offshore electrolysis in the future, provided that a robust cost-benefit assessment demonstrates that the expected benefits outweigh the additional costs”, the signatories said.
EU Commissioner for Energy and Housing Dan Jørgensen said in an online statement about the summit, “In these turbulent geopolitical times, Europe must stand strong and united – and choose independence”.
“That means doubling down on clean, safe, home-grown energy”, Jørgensen added. “It means building on our natural strengths, and few are greater than the North Sea and its vast offshore wind potential. It means strengthening our interconnections so that affordable energy can flow freely across our continent. And it means securing our industrial leadership while guaranteeing our security. This is Europe’s path to true independence”.
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