28 Aug 2023, 13:43
Milou Dirkx

German shipbuilders call for support for billion-euro investments needed for offshore wind expansion


New offshore wind farms could give an economic boost to German shipyards, but shipbuilding companies say they might not be able to finance the necessary investments without support, Frankfurter Allgemeine Zeitung (FAZ) reports. Richard Lüken, chief executive of the German Shipbuilding and Ocean Industries Association (VSM) says the “good news is there is more work than ever before,” but that it is difficult for German shipyards to deal with billion-dollar projects as medium-sized enterprises. Shipbuilders receive most of the payment only when the ships are delivered, with a financing period of six to eight years, he says. Around 1,000 ships are needed to meet Germany's target of 30 gigawatts of offshore expansion by 2030, according to Lüken. These will be necessary for transporting personnel and surveying the seabed, as well as for laying cables and anchor systems for the floating structures. Converter stations, which ensure that electricity generated at sea can be transmitted into the power grid, are the most expensive infrastructure investment. To meet the 2030 target, at least 15 of these converter stations are needed. Lüken roughly estimates each station would cost around 2.5 billion euros and said that Germany should be able to build at least part of them themselves to avoid future energy dependencies.

FAZ writes that the German state government is aware of the funding concerns and proposed a motion before the summer break which states “increased cooperation and efficient use of government funds are needed to close the financing gaps and make the necessary investments.” Lüken says the National Maritime Conference (NMC) happening mid-September could lead to a concrete proposal. He expects the government to at least extend their large-scale credit guarantee programme, which would mean that converter platforms could also be built in Germany itself.

The low construction costs have made offshore wind one of the most profitable renewable energy sources on the market, and it is crucial for achieving Germany's goals of having at least 80 percent renewables in its energy mix by 2030 and a largely emissions-free power mix by 2035. At a recent offshore wind auction oil majors BP and TotalEnergies pledged to pay a combined 12.6 billion euros for the right to build wind farms in the North and Baltic Seas. Environmentalists hailed this result as a “quantum leap” for the technology, as it showed how cheap renewables have become.

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