'Initial costs for offshore wind in the US will be slightly higher than in Europe': RWE
RWE Renewables after transfer of Innogy and E.ON's green power assets has 7GW offshore pipeline, designated offshore COO Utermöhlen tells Recharge
Sven Utermöhlen, designated Chief Operating Officer (COO) Wind Offshore Global of RWE Renewables which by the end of June will incorporate the renewables assets of former subsidiary Innogy and those of rival E.ON tells Bernd Radowitz the company plans €5bn in investments to expand in renewable energies
Due to the transaction, RWE is now the second biggest player in offshore wind globally with an offshore portfolio of 2.5GW in operations. And we want to continue to grow profitably with innovative technology solutions based on our long-term expertise in the development, construction and operation of large offshore wind farms. The ground for further growth has already been prepared: with Triton Knoll in the UK and Kaskasi in Germany we have 1.2GW under construction, with commissioning in 2021 and 2022.
In addition, our development pipeline consists of offshore opportunities with more than 7GW – not including open central tenders, which we are obviously considering on top. We are geared for growth – strategically, with our projects and staff as well as financially. By 2022, RWE wants to invest €5bn ($5.61bn) net in the continued expansion of renewable energy. This sum has the potential to rise significantly through contributions from partners.
Our renewables teams across the world are already working closely together. The final step of the transaction with E.ON is now intended to be implemented at the end of June, the teams will then be fully merged from July onward.
We are entering the offshore space in the US just now, but for many years we have been one of the largest onshore wind players in the country and we are very active in solar PV and storage as well.
Currently we are operating an US onshore wind portfolio with an installed capacity of more than 4GW (our share in this is around 3.4GW). Earlier this year 'Peyton Creek' (151MW) our 24th onshore wind project in the United States went into operation and we have commissioned the 100MW solar farm „West of the Pecos“ in Texas.
Based on our established US business and team and our European offshore experience it is a natural strategic step for us to expand into offshore wind technology in the US. The US coast lines offers globally one of the best untapped potentials for offshore wind. Many states have recognised this and offer strong support for this technology. We are focusing on getting access to a number of attractive lease areas.
But it’s too early to publicly talk about concrete offshore partnerships in the US.
Irrespective of the ongoing political discussions about renewable energy, the USA has been and is likely to remain in the foreseeable future a very attractive renewables market. The basis for this growth is business driven. We observe strong market fundamentals and rising electricity demand in combination with decreasing generation costs for renewables.
The offshore wind market in the US has developed rapidly in the recent years and I am convinced that this development will continue going forward. In particular, the growth of state targets for offshore wind generation has been very impressive.
On the other hand, with only a handful of installed offshore turbines in US waters there are still many challenges to be overcome. These include the resolution of conflicts of interest with important stakeholder groups like fishermen or local communities and others, good grid integration rules, the development of a local supply chain over time and the upgrade of logistical infrastructure like ports.
We do have a lot of experience with triggering the required grid upgrades and managing complex permitting processes and will bring this experience to bear.
Initially the costs for offshore wind in the US will be slightly higher than in Europe, where we have an established offshore market, that has developed over many years. It is necessary to bring costs further down. RWE is committed to make a significant contribution based on our experience as an European offshore player and an experienced US Renewables developer alike.