'Investments in hybrid offshore wind projects not so appealing': RWE Utermöhlen
Utility’s offshore wind chief calls for de-risking through CfDs and cross-border PPAs as part of a more attractive regulatory framework
Hybrid grid connections for offshore wind farms and cross-border offshore grids offer much potential for more efficient use of grids and would help reach European climate goals, but investing in them isn’t “so appealing” as existing EU energy market regulations do not yet fully enable such projects, RWE offshore wind CEO Sven Utermöhlen said.
“According to most proposals, the offshore hybrids will be placed in a separate bidding zone, the so-called ‘offshore bidding zone’(OBZ), not assigned to a particular onshore market,” Utermöhlen said in a LinkedIn post.
“But due to the high dependency on the electricity export via an interconnector, this poses several risks for generators.”
These can have a massive impact on prices of the energy generated and volumes that can be exported to shore, which is hard to manage and anticipate, he added.
“This, unsurprisingly, doesn’t make investment in hybrid offshore projects so appealing.”
He made his comments as EU energy ministers later today are expected to approve their conclusions on a sustainable power grid infrastructure.
Utermöhlen also stressed that it is vital that the necessary frameworks are set in place to create attractive conditions for both transmission system operators (TSOs), wind farm investors, customers and society.
As de-risking instruments, he suggested tailored contracts for difference (CfDs) to stabilise revenues, and cross-border power purchase agreements (PPAs) to enable long term agreements for a reliable supply of customers in an onshore market from a generator in an offshore bidding zone.
“These could be facilitated by exploring options to extend the scope of long-term transmission rights,” Utermöhlen said.
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