Offshore wind offers fertile market for Irish firms in Germany, France and Italy
- EU member states are united in the push for a carbon-neutral Europe by 2050, which requires huge investment in clean energy such as offshore wind.
- Click or scroll down for more information about the offshore wind market in:
Renewable energy is the single most critical factor for Europe when it comes to achieving its Green Deal zero carbon target by 2050. While climate change has provided huge impetus for the sector, the war in Ukraine has underscored the
importance of independent, safe, reliable, affordable sources of energy.
Offshore wind is a key and growing element in the drive for carbon neutrality and energy security. Wind already meets 15% of Europe’s electricity demand, according to Wind Europe, and that figure should top 50% by 2050. It’s already as high as 31% in Ireland and 44% in Denmark.
Most existing wind capacity is onshore, but governments and industry across Europe are now investing billions to develop and expedite scores of offshore wind projects, which are seen as key to large-scale renewable electricity generation in future.
Furthermore, the European Union is pushing for smart, green innovation and development across Europe through the €806.9 billion Recovery and Resiliency Facility (RRF). Distributed through national plans, this funding aims to help Europe recover from the pandemic and future-proof its economy and society, with sustainable, clean energy a key goal.
An unmissable opportunity for Irish companies
The huge surge in planning and construction in the industry is causing massive demand, serious supply chain bottlenecks and skills shortages. Furthermore, port infrastructure across the region needs upgrading to facilitate the transport, storage and preassembly of the huge components needed to build offshore wind farms.
While challenging for the sector, these issues mean there are significant opportunities for Irish firms with digital, engineering and marine expertise.
“The large developers, Tier 1 contractors and OEMs in offshore wind are looking for innovation, sustainable solutions, flexibility and a strong safety culture,” says Liam Curran, Senior Technologist with Enterprise Ireland. “Irish companies can find opportunities across the windfarm lifecycle, from initial feasibility studies and planning applications right through to construction/installation and subsequent operation and maintenance over decades.
How to support the offshore wind sector
Curran says companies should seek to offer services or solutions that maximise efficiency and safety or cut costs or risk. Being open to collaboration is critical, as these complex projects involve multiple stakeholders.
Enterprise Ireland sees particular opportunity for Ireland and Irish firms to lead when it comes to digital and data services. “The further projects go offshore, the more vital high-tech solutions become,” he explains.
“We want everyone involved in offshore wind in Europe to know the Irish are the people to go to when IoT, connectivity, communication systems or cyber security is needed,” he said, “and we want Irish firms with expertise in these areas to consider developing an offering for offshore wind if they haven’t already.”
In particular, the industry has significant need for support in the following areas:
- data collection and analysis
- remote condition monitoring
- telecoms and connectivity
- artificial intelligence, machine learning and IoT (internet of things)
- automation and robotics.
He adds that offshore wind also offers clear opportunities for:
- engineering companies
- contractors experienced in oil, gas, electricity and civil projects.
- specialists in energy infrastructure, power generation and grid management
- marine and ports services companies.
Irish firms already leading the way
Many Irish companies already service the offshore wind market. These include Gavin & Doherty Geosolutions, for example, a specialist offshore and marine engineering firm operating in 15 international markets, high tech surveying companies such as XOCEAN and Green Rebel Marine, and marine services specialists such as Alpha Marine and Fastnet Marine.
Digital and connectivity specialists meeting the needs of offshore wind clients in Ireland and overseas include Vilicom, Druid Software, TechWorks Marine, BrightWind Analysis, Exceedence and EMR Integrated Solutions.
Other firms such as Combilift and Qubus Systems are also catering to the offshore wind sector in Europe.
Take the first steps
Companies keen to join the offshore wind supply chain should first work to get up (and stay up) to speed on market intelligence. Attend industry events to build both knowledge and networks, and consider joining clusters such as the Gael Offshore Network. This is a cluster of more than 85 Irish companies with relevant digital, engineering and other expertise.
Expert advisors in Enterprise Ireland’s network of offices across Europe, together with its Market Research Centre in Dublin can support you as you examine the offshore wind opportunity. This can include help with market research, market visits, making local introductions and tendering.
Having been slow to start, France is strongly committed to offshore wind and offers a welcoming market for Irish specialist firms.
The offshore wind market in France
France has huge potential for offshore wind, given it has a maritime zone of 11m km2 and the second largest wind resource in the Europe after the UK. Furthermore, the French government is strongly committed to this form of energy, given the war in Ukraine and its national goal for carbon neutrality by 2050.
France is planning to operate 40GW of offshore wind turbines by 2050, with 18GW slated to be in operation by 2035 and 2GW of offshore attributed per year, from 2025 onwards. Most of this will be concentrated on the Atlantic coast.
Four wind farms are under currently under construction, with three other contracts awarded and five projects beginning or undergoing a tender process, including 750 MW of floating windfarms. While development has been slow in the past, all projects in that pipeline are expected to be completed within 10-12 years.
Three pilot floating windfarms in French waters are among the first seven floating windfarms in the world.
France’s multi-annual energy plan (2019-2028) includes its energy policy priorities, and another plan is in the works that will cover the period up to 2033. It is also updating its planning processes and marine and coastal strategy to reflect its ambitious offshore wind plans.
Understand the offshore wind opportunity in France
As Ireland’s nearest EU neighbour, France is an obvious and welcoming option for companies looking to diversify into Europe. Ireland is seen there as a strong player in the marine sector.
France and Ireland are already co-operating on the energy front with advanced plans for the Celtic Interconnector, a submarine power cable between Cork and Roscoff. Ireland’s first interconnector with mainland Europe, it will connect the electricity grids of both countries.
Enterprise Ireland has also been running market economic visits to French ports such as Brest, St Malo and Roscoff, for Irish firms to meet potential local partners and understand the local landscape.
Across the offshore value chain, from site assessment through to operations and maintenance, Irish firms will find opportunity in France. This is especially true for areas such as:
- Marine services
- Geotechnical and geophysical monitoring
- Environmental monitoring
- Consultation, planning and advisory, including financial consulting
- Developing ports and other infrastructure
- Digitalisation of ports and other services
- Addressing the significant dearth of data around some maritime areas and the impact of windfarms on local ecosystems, tourism, shipping, fishing and aquaculture
- Installation security, especially given France’s large maritime zone and current geopolitical risks
Selling into France
Irish companies need time and patience to engage with the long tendering cycle, but this also means there are strong opportunities now to discover the market and tender successfully for upcoming projects. Approached correctly, France can be a significant and lucrative market for innovative, leading-edge Irish companies.
Key players in the market include:
- RTE [transmission system operator (TSO)]
- France Énergie Éolienne (industry association)
- Ministère de la Transition Écologique and Ministère de la Mare (government departments)
- EDF Renewables (Global leader in renewable energy)
- Main Developer firms ENGIE, Iberdrola, WPD Energy, EOLFI, Total and QAIR
- Blade and Cable Manufacturers such as Siemens and Prysmian
- Construction contractors, including Eiffage and Bouygues, Navantia.
- Technology developers such as SBM Offshore, BW Ideol, and Principal Power.
Being part of a local, on-the-ground network is important in the French market. It’s vital to have a sense of local adoption and to have a local partner to support with tendering and market integration. Bear in mind that Tier 1 and OEMs typically require suppliers to be pre-approved.
Within eight years, Germany has become a global leader in offshore wind and welcomes collaboration and partnership with innovative suppliers.
The offshore wind market in Germany
While Germany is now the second largest market for offshore wind in Europe after the UK, this is a recent development as it had no commercial-scale projects until 2014.
It now has 27 operational offshore wind energy projects and installed offshore capacity of almost 8GW in the German Baltic and North Seas, and has ambitious growth targets of 30GW by 2030, 40GW by 2035 and 70GW by 2045.
The government is accelerating the expansion of its renewable energy production to achieve climate goals and to reduce dependence on Russian energy. There are six more offshore wind projects either in construction or due to start between 2022 and 2024.
Many in the industry have criticised Germany’s recent amendment of the Wind Energy at Sea Act, however, as they are concerned the revised tender process could ultimately lead to higher energy costs for consumers and businesses.
Understand the offshore wind opportunity in Germany
Of Germany’s total €28 billion national Recovery and Resilience Plan or Deutscher Aufbau- und Resilienzplan (DARP), 42% has been allocated to support climate objectives.
Germany sees green hydrogen, which is produced from wind energy, as a key route to decarbonisation. This recently led to the establishment of the German-Irish Hydrogen Council, which is expected to open up a new era of energy co-operation between the two countries.
Among the key market stakeholders in Germany are:
- Deutsche WindGuard (service provider which publishes development statistics)
- Industry associations such as Bundesverband WindEnergie (BWE), Bundesverband der Windparkbetreiber Offshore (BWO), WAB and OWIA (Offshore-Wind-Industrie-Allianz)
- Stiftung OFFSHORE-WINDENERGIE (non-partisan industry foundation)
- VDMA Power Systems (trade association)
Selling into Germany
At a minimum, you’ll find a strong local partner to help you with language skills and making the most of their existing relationships on the ground.
German business culture is usually risk-averse and new entrants need to show strong commitment to the market. Networking and getting involved with local trade associations is also vital, as these are strong in Germany and influential in this sector.
It’s also crucial to be fully aware of and compliant with Germany legislation and any processes and regulations relating to state bodies operating in the sector.
Be as prepared and committed as you can. Germany isn’t a market for opportunistic sales. If possible, a physical presence there and regular visits to the market will mean you can take advantage of the long-lasting opportunity the German market offers.
Italy has been relatively slow to develop offshore wind, but interest is growing rapidly in the market, with urgent geopolitical and climate reasons to drive action.
The offshore wind market in Italy
Italy not only wants to become carbon neutral by 2050, but is also keen to accelerate this work to address energy sovereignty issues. Up to now, Russia has supplied 40% of Italy’s gas, representing 16% of its total energy needs, with Algeria supplying 29% of its gas.
Change is afoot. The government is prioritising the integration and management of renewable energy, energy efficiency, grid digitalisation and storage systems. Moreover, the national renewable energy development plan (PNIEC) aims to power 55% of national electricity consumption from renewable sources in 2030, up from 39% in 2022.
Onshore wind produces 5% of Italy’s energy, but a lack of space on land and the absence of sites suitable for fixed-bottom wind mean there’s an increasing focus on floating offshore wind. Italy aims to increase wind power from the current 10.5 GW to 18.4 GW by 2030, with 900MW slated to come from offshore.
Despite this relatively low target for offshore wind, there is strong developer interest in the market. At the moment, only the 30MW fixed-bottom site at Taranto is operating, but Terna (Italy’s TSO) saw 39 grid connection applications for offshore wind in 2021.
Understand the offshore wind opportunity in Italy
Italy’s strategic maritime location and long coastline offers strong potential for offshore wind. This is especially true in the south, and around Sicily and Sardinia, where wind speeds are higher,
Within Italy’s €191 billion National Resilience and Recovery Plan or Piano Nazionale di Represa e Resilienza (PNRR), which is funded by the EU, €59.46 billion is devoted to the circular economy and introducing green initiatives. The government is adding a further €30 billion in grants.
Furthermore, the PNRR also includes significant commitments around infrastructure with:
- A commitment to reform and simplify the planning process for both onshore and offshore sites
- €31bn allocated to upgrade railways and ports
The lack of developed supply chain in Italy offers significant opportunity for Irish companies, but they will have to contend with challenges in the market. These include complex RFPs, bureaucracy and planning processes, along with local competition and local objections.
Key stakeholders include:
- Terna (TSO)
- Elettricità Futura (National Association for organizations in the energy sector)
- ANEV (Italian National Wind Energy Association)
- ERG (Italy’s leading wind energy producer)
- WEMES (R&D Association for OSW)
- Eni (Italian energy multinational)
- Renexia (renewable energy firm)
Irish firms will find opportunity in Italy around:
- Surveying for the feasability and development stages
- Supporting the upgrade of ports and other infrastructure
- Digitalisation and smart energy solutions
Operations and maintenance.
Selling into Italy
Take your time and be prepared. Invest in validating the market opportunity and building the right market entry strategy. Italian customers value strong relationships so it is worth spending time investing in building your network.
Irish firms typically find it useful to have a strong local partner in this competitive market, as this can help shorten the sales cycle, deal with the language barrier and navigate local bureaucracy.
Direct relationships matter. Invest time in coming to the market and meeting your counterparts in person.