The offshore wind energy industry is growing extremely fast. At the forefront of this development are the U.S., Europe and China. Almost all governments in Europe are now committed to increase their share of renewable energy and wind energy. As offshore wind power has grown, questions have been raised if the percentage of renewable energy can and should be increased beyond what it is now, and some industry experts are concerned that the electricity costs could spiral out of control. With the possible exception of Norway, all nations along the North Sea, that includes the UK and the Netherlands, Germany, Denmark and Norway, subsidized offshore windpower hoping that offshore wind will stabalize the intermittent supply of other renewable energy sources such as solar power. But it is a well-known fact that solar power and wind energy cannot possibly meet Europe’s energy requirements, because they do not feed a constant supply of energy into the electricity grid, and are intermittent sources of energy.
Monopiles: An essential part of offshore windpower
As the offshore wind industry has grown to substantial proportions, it has become much harder for wind farm owners and operators to contract suitable suppliers of deep foundations. Of particular concern to them is the supply of monopiles to buil deep foundations. EEW is one of Europe’s most important suppliers of monopiles. In fact, the company has grown to such an extend it now produces monopile components for customers in Taiwan. In the city of Rostock, EEW operates Germany’s largest manufacturing plant for monopiles. Rostock may be located on the southern shoreline of the Baltic Sea, but due to the urgent need to build more monopiles, and given the lack of competition in the monopile industry, EEW can afford to produce from such a far-away location. From Rostock, monopiles are transported to the North Sea, where they become an integral part of offshore wind farms. EEW had a marked uptick in revenue, and the share of the monopile business now constitutes roughly 50% of company revenue.
Customers have grown quiet and they do not wish to complain too much. They say the lack of competition in the industry would mean projects would be delayed and costs would explode, as they are dependant on a few monopile suppliers and the market is consolidating further, leaving them with an oligopoly. This is mainly due to cost pressure, but also due to a lack of adoption of the right types of technology. EEW now fills the market gap.
CAPEX will increase because of that, and will make offshore wind power projects less profitable.
If you would like to read more on this subject, please follow the link provided to you in the reference section.
Hubik, F. (2016), ‘The Monopile Monopoly’, Handelsblatt, 02 September, Available at: https://www.handelsblatt.com/today/companies/offshore-windpower-the-monopile-monopoly/23535042.html?ticket=ST-1575080-bqCBBuWfdpn1eXVSouTV-ap2 (Accessed: 02 09 2018).