international analysis and commentary

The Ostend Declaration: a boost to the European energy transition

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Due to the Russian invasion of Ukraine, Europe ran for cover to free itself as much as possible from Russian gas supplies, and this gave a boost to the European energy transition. It is on this front that the Ostend Declaration comes into play. In April 2023, the leaders of Belgium, Denmark, Germany, Holland, Luxembourg, France, Ireland, Norway and Great Britain met in Belgium, together with European Commission President Ursula von der Leyen in the context of the North Sea Summit held in Ostend. The final aim of the summit was to sign a joint declaration with the intent to double offshore wind power generation. The agreement would strengthen joint action towards greater energy independence.

This summit was the second edition of the North Sea Summit. In 2022, Belgium, Denmark, Germany and the Netherlands met in Esbjerg, Denmark, to form the so-called “North Sea Coalition”. The goal was to jointly reverse dependence on Russian gas and fossil fuels. The first edition of the summit closed with a declaration that formalized the ambition of the four founding countries to quadruple their combined offshore power generation capacity to 150 gigawatts by 2050. In 2023, the coalition extended to France, Ireland, Luxembourg, the United Kingdom and Norway.

Belgium’s De Croo, Germany’s Scholz, Denmark’s Frederiksen, EU Commission President Ursula von der Leyen and Netherlands’ Rutte in Esbjerg.

 

Offshore wind energy refers to the energy deriving from plants installed in the water. In this case, the installation of turbines would take place in the North Sea, chosen for a specific reason: Its waters are relatively shallow and this would therefore favor their installation. The North Sea will become a sort of power plant with the aim of producing 120 gigawatts by 2030, and at least 300 by 2050, starting from the current 30. The wind turbines that are assembled to form a wind farm are, in fact, the essential tools for the production of wind energy and can be installed both on land (onshore wind), and in the open sea (offshore wind). Offshore wind farms are structures built near the coast and exploit the power of the wind to produce renewable energy. The main advantages of offshore installations are: wind speed, which is faster in the open sea and therefore produces much more energy and faster; fewer interruptions, as offshore wind speeds tend to be more stable than onshore, resulting in more reliable energy; and lower environmental and acoustic impact.

The disadvantages caused by the adoption of this technology are mainly two: the intermittence of wind in general, and the potentially high running costs. As for all renewable energies, the production of wind energy is also subject to the challenge of the inconsistency of the wind. However, as mentioned, in the open sea the wind has a greater force and tends to be more stable, making it one of the most promising alternatives for energy renewal. The second disadvantage is the ongoing maintenance and potentially high running costs. Wave action and very strong winds, particularly during storms, can damage wind turbines requiring immediate action to restore operational functionality. In these cases, the energy recovery time after a malfunction can be longer than for onshore wind farms, due to the problems associated with transporting the equipment needed to perform maintenance, with a consequent increase in the operating costs of the plants.

Offshore wind turbines

 

The project in the North Sea is scheduled to begin in 2026 and be operational by 2028. However, there is no agreement with Belgium, due to the refusal of local authorities and environmental NGOs who fear the prediction of hasty impact studies on biodiversity.

Why is this deal so important? If the project succeeds, it will finally cover, and possibly exceed, European (including extra-EU countries) energy needs. The European Commission aims to achieve the objective set at the 2023 North Sea Summit through the “The Green Deal Industrial Plan”, which is based on four regulatory pillars: a simplified regulatory environment, which provides, for example, the “Net Zero Industry Act” for the formation of an industry that is zero emissions; the “Critical Raw Materials Act” which provides for the massive use of renewables through secure supplies of critical raw materials; faster access to finance, in order to speed up investment; and financing for clean-tech production in Europe.

The Commission aims to make it easier for the member states to obtain the necessary aid to fast-track the green transition. To do so, the Commission revised the “Temporary State Aid Crisis and Transition Framework”, to further support the transition towards a net-zero economy, and the “General Block Exemption Regulation”, to speed up the green and digital transition. Brussels will also facilitate the use of existing EU funds, such as REPowerEU, InvestEU and the Innovation Fund.

Another crucial objective is the improvement of the necessary skills needed to make the green transition happen. For example, the Commission will establish “academies” (education and training centres) for this purpose. The last objective is to make trade work for the green transition, which means maintaining fair competition and open trade, together with the work of the World Trade Organization. To support this, the EU will continue to use the Free Trade Agreements.

 

Read also:
The new energy mix: security, economics, and the green transition
The odd energy triangle: EU, Russia, China
How the EU can foster a global climate transition through its consumer power

 

There are many geopolitical implications, as the move represents the ultimate emancipation from Russian gas supplies and a European response to the US Inflation Reduction Act (IRA) to subsidize investments in the energy sector. With the IRA, in fact, President Joe Biden seeks progress on the energy transition, while developing industrial policy that can create jobs in the United States and revitalize the American economy. In particular, the open competition is with China. In fact, the last, but definitely not the least, geopolitical implication of the Ostend Declaration is to contrast the Chinese monopoly in the production of components for wind energy and more. Beijing has almost total control over the renewable sector with about 80% of the components needed to manufacture a wind turbine and 97% of the silicon wafers necessary to build a solar panel being produced in China. China is also a key player in other raw materials including rare earth minerals that go into renewable technologies. Europe must therefore find a way to reduce this dependency.

The Ostend Declaration of Energy ministers has the aim of producing more renewable energy in Europe in order to accelerate the European energy transition. This will support the EU’s and Europe’s own strategic autonomy. At the same time, in fact, achieving this goal would make Europe less dependent on Chinese imports, securing the supply of the necessary material through domestic production or new partnerships with producers such as the US or Canada. The war in Ukraine is showing us that it is not convenient to depend on a single state for energy supplies – Russian gas supplies in this case –, which is why Europe can no longer afford to switch from one dependency, the Russian one, to another.