NSEC countries ‘unlikely’ to meet 2030 offshore wind target without immediate action on port development, study says

A new report from the North Seas Energy Cooperation (NSEC) calls for “immediate action” on developing new port infrastructure and upgrading existing port facilities as the study behind the report found the joint offshore wind target of the nine NSEC countries for 2030 is unlikely to be met otherwise.

In this article:

The North Seas Energy Cooperation held a ministerial meeting today (20 November) in the Hague, where the representatives from the nine NSEC member countries, together with the European Commission, agreed on and launched an action agenda that, among other things, refers to the North Seas Offshore Wind Port Study 2030-2050.

Commissioned by the Netherlands Enterprise Agency (RVO), under the Dutch co-presidency of NSEC, and carried out by Royal HaskoningDHV, the study encompassed a vast number of relevant parties with a survey and interviews conducted with almost 40 stakeholders in total, including 20 ports, ten industry players, and seven stakeholders from national governments and the European Commission and the European Investment Bank (EIB).

The nine NSEC countries (Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway and Sweden) and the UK have agreed on joint offshore wind targets of at least 120 GW in 2030 and 300 GW by 2050.

NSEC members, together with the UK, currently have a combined installed capacity of about 33 GW. This means that some 87 GW of offshore wind is planned to be installed over the next seven years. However, this amount of new capacity is unlikely to be realised without additional dedicated port infrastructure.

While the offshore wind projects that will be built in the next few years have often already secured port capacity, installing this massive offshore wind capacity by 2030 and beyond that point comes with a much higher demand for specialised ports. According to the study, the peak in offshore wind energy deployment is anticipated between 2029 and 2031.

“We have identified a need for 850 to 1,300 hectares of dedicated port area that is needed in 2030 for the North Sea alone. At the moment, there are about 600 hectares available, so that is 250 hectares short of the lower end and 700 hectares short of the upper end,” Leon Lammers, Project Manager Port Development & Offshore Wind at Royal HaskoningDHV, said in an interview with our sibling news site offshoreWIND.biz.

Besides identifying the status, future requirements and challenges in the development of offshore wind ports in the North Sea countries, the new report also recommends actions for multiple stakeholders that, if taken, could ensure the port capacity needed to build tens of gigawatts of new offshore wind farms.

Huygen van Steen, Programme Coordinator Offshore Wind and Energy System at the Netherlands Enterprise Agency (RVO), said: This report is sort of a comprehensive handbook for port development as it lists all the ingredients to have the port infrastructure needed to reach the offshore wind targets for 2030. We now know what the main challenges are and we now know all the solutions that are there to overcome them. I hope that this report will serve as a foundation for moving from ambition to action.”

Uncertainty in offshore wind and non-viable business cases main stumbling stones

“Many ports have already made plans to develop new port capacity because they also see the shortage coming. In Denmark, Germany, Netherlands and Belgium, we have identified just under 200 hectares of new port areas in development at this time,” says Leon Lammers.

Leon Lammers, Royal HaskoningDHV

Still, even if all these existing port plans are realised, it would not be enough to reach even those 850 hectares at the lower end of what is needed. To add to that, the majority of these ports have not secured funding, most of them because of uncertainty in future offshore wind development and non-viable business cases.

For the former, the policymakers need to set a clear path forward for reaching the agreed offshore wind targets and rolling out project tenders. The uncertainty in future port demand threads on the uncertainty for offshore wind project developers.

The North Seas Offshore Wind Port Study 2030-2050 identifies five main challenges for offshore wind port development. These include demand uncertainty, non-viable business cases, technical development risks (uncertain future technical requirements), competition for space, and incentive mismatch (market players having different perspectives and interests).

“Besides the demand uncertainty, unviable business case is one of the biggest issues and all the other challenges play into that, including the technical risk and also the competition for space,” Royal HaskoningDHV’s Leon Lammers said.

There are also some spatial constraints and permitting issues that can play a role, as well as the competition for space, but making a viable business case remains at the top of the list, according to Lammers.

“It is just not financially prudent to invest in these expensive infrastructures because it is very hard to earn that money back. The demand uncertainty just adds to that. The core issue is that you need a viable business case to obtain funding for the project. No business case, no funding.” Lammers said.

Most urgent bottleneck in installation port capacity

As more and more offshore wind farms go into operation by the end of the decade, the available space for operations and maintenance (O&M) bases will get smaller, primarily with storage and warehousing facilities that will be needed. Each new offshore wind farm will require its own separate warehouse close to the waterside, ports need to plan for that.

Furthermore, new port developments and upgrades to the existing infrastructure would also be needed to ensure there are ports that can accommodate floating wind installation and O&M. Leading up to 2030, floating offshore wind will need significant investments in ports, these developments are focussed mainly on Scotland, Ireland, France and Norway.  

Still, the new report states that the most urgent bottleneck that needs to be tackled is the installation port capacity in the North Sea region.

According to RVO’s Huygen van Steen, port capacity for offshore wind installation operations, the challenge with competition for space from other industries is already growing and touches upon one of the other challenges the study identifies – the viability of business cases. For instance, the demand for port areas coming from the hydrogen industry makes a more viable business case since not as much big infrastructure is needed for installing an electrolyser at a port site.

Huygen van Steen, RVO

Furthermore, the competing interests to offshore wind installation port capacity have already taken away a small portion of that port space.

“It is already very difficult to secure new port areas, not only because of the offshore wind rollout in the North Sea region but also the wider energy transition. As an example, in the Netherlands, we have lost some of the potential installation port capacity because of the expansion of Sif at Maasvlakte and the new LNG terminal in Eemshaven. So, looking at the net capacity, we have actually lost a little bit of it,” Huygen van Steen said.

“This makes the port programme quite urgent, also for the next offshore wind tender in the Netherlands, as we actually need to develop more installation port capacity. There is a port upgrade project in Amsterdam and we will now really need it for the next tender.”

Report lists action points, NSEC already working on lowering demand uncertainty

The new report provides a comprehensive list of recommended actions for both the private sector and public stakeholders on national, regional and EU levels, as well as financial institutions.

Governments and relevant authorities should focus on creating the right conditions for the industry to operate, for example, creating demand certainty through increased tender pipeline visibility. Public stakeholders should also enable access to finance for ports with grants to mobilise public funding streams, set up regional and national port plans, and collaboration, Leon Lammers said.

According to Huygen van Steen, NSEC has already started working on addressing the challenge of demand uncertainty.

The North Seas Offshore Wind Port Study 2030-2050 calls on the governments to recognise the sense of urgency and value, and for the involvement of European and national governments to drive offshore wind port capacity.

The report also says ports could explore new revenue models. Furthermore, the wider industry should collectively define and agree on port requirements to reduce technical development risks for ports.  Ports can also push for optimised tender sizing and coordinate their development plans with other ports to optimally align port development with industry needs.

The action point for financial institutions says they should have a clear mandate to invest in offshore wind ports, balancing EU grants and public funding to mobilise private investments.

The action points for each group of stakeholders have their timelines, depending on what needs (and can) be done in the near term, and what would be needed in the future.

Immediate actions focus on optimising existing systems and preparing for the peak in 2029 – 2031. Structural transformations – which serve as a bridge from the near-term to the future goals – aim to develop a thriving port ecosystem capable of meeting the ever-evolving demands with robust business models.

Port development can bring economic and societal benefits

Speaking of developing new offshore wind ports, both Huygen van Steen and Leon Lammers pointed out that these projects will have a beneficial impact not only on the offshore wind industry and reaching national and EU targets, but also on society.

Leon Lammers said that the Port of IJmuiden, which is also working on an installation port project, has done a cost-benefit analysis that found that there is also a big benefit to society in realising the port upgrades.

Illustration; Artist impression of the future Energy Port; Source: Amsterdam IJmuiden Offshore Ports (AYOP)

“The benefits that have been identified by the Port of IJmuiden are not only related to facilitating the buildout of offshore wind as a renewable energy source but also to, for instance, avoiding a lot of extra kilometres for the installation vessels, which in turn minimises project costs and avoids additional CO2 emissions,” Leon Lammers said.

“Other ports might want to perform one of these assessments as well since showing that a port development would have a positive societal effect could clear the way for governments to step in and make it also financially feasible.”

Huygen van Steen added that a focus on sustainable solutions and circular economy is also an essential part of today’s port development – especially with the offshore wind industry looking to lower its footprint further.

“Responsible business approach is very important for both the Government of the Netherlands and for the North Seas Energy Cooperation, and it is becoming even more important as we move forward with the energy transition,” Huygen van Steen said.

Van Steen pointed out that, on top of the societal and environmental benefits, taking circularity into consideration was also a sound business case as it goes beyond the construction and O&M of offshore wind farms, which have their lifespans. 

“You have to think of it in a circular way. These components will all come back at some point and we need to recycle them. That is what we really need to move faster towards the circular offshore economy – and ports can play a crucial role in that,” Van Steen pointed out.

Next week, Leon Lammers and Huygen van Steen will present the new NSEC port study and discuss its findings and recommended action points at the Offshore Energy Exhibition & Conference 2023 (OEEC 2023).

The session North Seas Offshore Wind Port Study 2030-2050, organised by the Netherlands Enterprise Agency (RVO), will be held from 10:30 to 12:00 on November 28 in RAI Amsterdam and will be live-streamed on Offshore Energy and offshoreWIND.biz.

The session is open to all those attending OEEC 2023 and requires prior registration due to a limited number of seats. You can register for the session North Seas Offshore Wind Port Study 2030-2050 on RVO’s website. The live stream page will be announced in due course.