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Europe's crucial vote

4C Offshore | Chloe Emanuel
By: Chloe Emanuel 20/11/2023 Wind Europe

The European Parliament is poised for a crucial vote on Tuesday regarding the Net-Zero Industry Act (NZIA), determining its position for negotiations with the European Commission and Member States. MEP Christian Ehler, leading the Parliament’s stance, has proposed measures within the Industry, Research, and Energy Committee (ITRE) to endorse a robust European wind industry, pivotal in achieving Europe’s climate and energy security objectives.

With the imperative need to construct approximately 30 GW of new wind farms annually until 2030 to fulfill climate and energy security targets, Europe's wind industry holds global prominence. However, challenges such as inflationary pressures, uncertain wind expansion volumes, and inadequate auction design have hindered the European wind supply chain. These hurdles impede strategic planning and investment in new manufacturing sites essential for meeting the EU’s energy security and climate objectives.

The European Commission introduced the Net Zero Industry Act (NZIA) earlier this year to fortify and expand European clean tech manufacturing. Commission President Ursula von der Leyen emphasized the EU’s commitment in her State of the Union Speech, stating, “the future of our clean tech industry has to be made in Europe.”

Pierre Tardieu, Chief Policy Officer at WindEurope, stressed the significance of tomorrow's Parliament decision, affirming, “Boosting the European wind supply chain is critical to delivering the EU’s Green Deal. Aligning auction tariffs with input costs, ensuring fair competition, and counteracting detrimental ‘race to the bottom’ auctions are pivotal actions for energy security, job creation, and autonomy.”

Key Proposals:

Auction Design Enhancements: The ITRE position proposes explicit prequalification criteria for wind energy auctions, incorporating cybersecurity and data residency rules to safeguard critical energy infrastructure against cyber threats.

Inflation Indexation Mechanism: Addressing current challenges, an inflation indexation mechanism is proposed for wind energy auctions. This aims to mitigate economic risks caused by high inflation, enabling projects to progress despite escalating input costs.

Mitigating Negative Bidding: The ITRE Committee advocates for the cessation of negative bidding by Member States in auctions. This practice, where developers pay governments for wind farm construction rights, increases transition costs, impacting supply chains and consumers.

The Council's finalization of its negotiating mandate on the Net Zero Industry Act is now crucial. Trilogue negotiations, involving the European Parliament, Member States, and the European Commission, are slated for Q1 2024. Precision in adopting measures and ensuring technology-specific supply chain resilience will be pivotal in the final negotiations.

For more information about offshore wind farm projects across the globe, click here.


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