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File photo: Siemens

Siemens Expects Offshore Wind Boom in Baltic Sea

Bloomberg
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April 27, 2021

By Maciej Martewicz (Bloomberg) —

Siemens Gamesa Renewable Energy SA sees huge potential for offshore wind in the Baltic Sea as the world’s largest producer of turbines at sea looks to take advantage of a jump in global demand.

The company estimates the capacity potential of the Baltic Sea at several dozen gigawatts by 2040, Pawel Przybylski, a regional head of offshore sales, said in an interview. Coal-reliant Poland, with the most ambitious targets in the Baltics, plans to install as much as 11 gigawatts by then amid rising pressure to cut carbon emissions.

“We’ll be looking at all the markets where we can expand, but surely the Baltic region is of a big interest for us,” Przybylski said.

Poland, the European Union’s largest eastern economy, is scrambling to rebuild its energy system as the rising price of carbon dioxide emissions are making its aging coal plants unprofitable. Offshore wind, as well as nuclear plants, gas-fired units and solar installations, are set to drive the change, which will be a part of 1.6 trillion zloty ($424 billion) clean economy transition project.

Luring Giants

As the global offshore capacity is set to skyrocket to more than 200 gigawatts by 2030 from 36 gigawatts last year, Siemens Gamesa sees the North and Irish Seas in Europe, North America and southeast Asia as other key markets.

“We predict there will be a leap in about 5 years, with the global annual installed capacity rising to more than 10 gigawatts from a few gigawatts at the moment. And we’re getting ready for it,” Przybylski said.

Poland’s offshore wind project is set to cost about 130 billion zloty, with turbines accounting for less than 30% of that expense. It already drew the likes of Equinor ASA, Orsted AS and Northland Power Inc. to team up with local investors.

Siemens Gamesa, which already has more than 1.5 gigawatts of onshore wind turbines working in Poland and secured orders from local suppliers of 1 billion zloty annually, is looking to be part of this effort. The company has more than a 60% share in the global offshore turbine market.

Tight Schedule

To secure Polish orders and ensure a high local content share, Siemens Gamesa is in talks with new and existing suppliers and is interested in a partnership with a tower producer. However, it probably won’t build a turbine production facility in the country this decade.

As ports and especially vessel reservations are in high demand from other offshore investors, Poland’s projects may face potential bottlenecks, according to Przybylski. The plan by some energy companies to start offshore power production in the country in 2024 is becoming “less and less realistic,” while 2025 is already “very ambitious,” he said.

“There are some risks for the schedule, but we believe it’s achievable,” Przybylski said. “We still have this year and part of the next to agree contracts with investors if we are to deliver the turbines in line with their schedules.”

© 2021 Bloomberg L.P.

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