Offshore Wind – Achieved Cost Reductions in Germany

Germany is, as of 2019, the second largest market for offshore wind power, with 28.5% of global capacity installed in German waters (Global Wind Energy Council 2020). After launching the first German offshore wind park Alpha Ventus in 2010, which also was the first wind park built under high-sea conditions in the world (Alpha Ventus 2020), the country has collected a range of experiences concerning offshore wind park development.

Thanks to these experiences, Germany was able to greatly reduce the costs of offshore wind energy. These cost reductions then culminated in several zero-support bids being submitted at offshore auctions in 2017 and 2018. This event, which surprised many even though costs of offshore wind had been falling for some time, implied that developers were expecting to be able to construct offshore wind parks without financial support –apart from the grid connection – for the first time. Although this sparked a debate, which will be covered in this study, it has demonstrated that competitive offshore wind energy is not a vision of the distant future anymore. Competitiveness can already be achieved for projects currently in the planning stage, both in Germany and, as research by Jansen et al. (2020) shows, in other leading European markets as well.

These developments are promising; not only for every country that chooses to commit to expanding offshore wind power but for the global energy transition in its entirety, as the German cost reduction experience might be transferable to other countries. To grant insights into these experiences, the following study gives a brief overview of the achieved cost reductions in Germany and its drivers. It concludes with several lessons learned, which could be of interest for countries at the early stage of offshore wind development hoping to achieve similar cost reductions.

The following report is based on extensive desk research and interviews with industry experts from German associations and wind power companies. If information was obtained from an interview, it is marked as such, but the interviewees are, following their request, not explicitly cited. An overall list of interviewees is however appended to the report.