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Grid capacity and attraction of investors are the key challenges in developing Baltic offshore wind, experts say

The main challenges of offshore wind energy projects in the Baltic Sea include aligning the regulatory framework, balancing national and investors interests, attracting project developers amid increasingly tough global competition and developing a transnational power transmission grid so that the generated electricity could be sold. That’s what emerged at the Baltic region’s largest wind energy conference WindWorks. Moving Energy.

Opening the conference for a third year already, Latvian President Egils Levits expressed satisfaction that his appeal for an acceleration of wind energy development has been heeded and that the industry has taken significant steps towards development but noted that good intentions alone are not enough and that political will must be based on a practical action plan. Latvian Climate and Energy Minister Raimonds Čudars said that the recently established ministry has been working to streamline the permitting both for onshore and offshore wind farms, on implementing the capacity booking regulations as well as principles of market regulation and the export of surplus electricity.

In her address, the European Union’s Energy Commissioner Kadri Simson stressed the streamlining of the issuance of permits for wind energy projects as a task important for all of Europe, while Giles Dickson, Head of European wind energy association WindEurope who spoke on the first panel, mentioned a two-year time limit as an important criterion for making the permit issuance more effective. According to Mr Dickson, it is also essential to digitalise the process, thus making the issuance of permits simpler and faster as well as more accessible to international investors.

Representatives of the Latvian and Estonian ministries and wind energy associations were unanimous that offshore wind power will make up a substantial part of their countries’ energy portfolios, that they will need to attract experienced wind energy developers and that the countries therefore must send a clear signal to foreign entrepreneurs that they are welcome.

“To ensure this, the message must be unequivocal and all the parties concerned must agree that we want to develop the offshore wind industry and that the legislative regulation must be very straightforward and transparent,” said Aavo Kärmas, Chairman of the Board of the Estonian Wind Power Association.

In discussions on the successful use of the offshore wind potential, the capacity of the transmission grid was mentioned during several panels. It was admitted that insufficient transmission capacity can be a serious obstacle to the industry’s successful development, therefore, grid development solutions must be introduced while simultaneously tackling other tasks. For the time being, transmission capacity in Latvia and Estonia is sufficient, but everyone is aware that improvements will be needed already in the nearest future, especially if the countries aim to become electricity exporters.

When developing transmission grids, it is necessary to take into consideration a shortage of materials, a problem the enterprises involved in the business are already trying to solve by concluding partnership agreements and investing in the production capacity of the companies that manufacture elements of the grid infrastructure, but not all transmission system operators have access to necessary financing.

Pål Coldevin, Executive Vice President for Offshore Development Nordics, Poland and Baltics at RWE Offshore Wind, indicated that it is important for investors to know the power transmission grid’s capacity and plans for its development so they might assess where the produced electricity could be channelled and to consider supporting the grid’s development plans.

As the share of renewables in the electric power portfolio grows, a search for balancing solutions becomes inevitable. The power balancing market is in its early development stage, but it is clear, that there will be a high demand for innovative solutions. Already now wind energy can serve as a power balancing tool, but higher efficiency and stability can be achieved by introducing power accumulation solutions. For now, the most talked-about solution is the production of green hydrogen, which Latvia theoretically could transmit already now via its existing infrastructure, but the industry’s representatives do not rule out the development of other potential balancing solutions like ammonia which was frequently mentioned as equal to hydrogen.

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