The competitiveness of European renewable energy was a hot topic at European Sustainable Energy Week in Brussels.

As China and the US become increasingly competitive, Europe is feeling the pressure to secure its position as the home of renewable energy development and manufacturing.

Unpacking what this entails for the various renewable sectors was a panel of industry experts representing solar, wind and marine energy. They weighed the benefits of Europe’s policy landscape and highlighted the status of supply chain bottlenecks and funding challenges.

Europe’s wind sector

Louise De La Fortelle, Senior Policy Adviser of ZF Group, a company that provides wind turbine gearboxes and powertrains in Europe, explained that while some of their customers have recently cancelled contracts, she believes the EU is still competitive.

“Next year we will launch the largest serially-produced turbine in the world with Vestas. We are still investing in Europe, a sign of trust that we have a future here.”

Viktoriya Kerelska, Director of Advocacy and Messaging at trade organisation WindEurope, explained that the wind supply chain is in good shape and has fewer challenges than its solar counterpart.

Kerelska explained that the large supply chain is spread across 250 factories in every country in the EU and employs more than 370,000 people.

And despite a few rough years, she describes Europe’s wind supply chain as “a very big success story that we want to keep growing”.

“Now we need to focus on the implementation because a lot has gone out of the policy pipeline in the last three years and now we need to make sure we implement it,” said Kerelska.

She was referring to the Net Zero Industry Act, which she described as a good first step. However, she warned: “Having policy ambition does not equal having a project realising on the ground.”

The sector must maintain momentum to ensure the critical scale-up of wind deployment and factory expansion. Unlike solar, one of the main challenges in the wind sector is permitting.

Said Kerelska: “Two years ago we still had 80GW of wind energy projects that were stuck in the permitting process in Europe and every gigawatt stuck in permitting is business that doesn’t go to the factories. And the volume is not the maximum that it could have potentially been.”

Kerelska also pointed to the importance of digitalisation, indexing auctions and design for new procurement rules.

She made several suggestions to ensure the wind sector remains competitive:

• Reward incremental innovation to achieve appropriate scale-up
• Continue to rely on the recovery and resilience plans in place, which are already providing support
• Ensure foreign investors play by the same rules as Member States
• Establish pre-qualification criteria for auctions, a minimum for everyone to observe
• Member states need to include the topic of competitiveness in the National Energy and Climate Plans, especially in the current geopolitical climate

In order to remain competitive and globally relevant, Kerelska stated that the right regulatory frameworks are critical.

This was echoed by De La Fortelle, who explained that companies are asking themselves if Europe is the right place to invest and policy and funding will be their answer.

She also mentioned the importance of volume, that higher output meant lower costs. Volume is key to keeping competitiveness, she said, adding that it’s volume that makes China such a complex question. “They are able to deliver for the whole world.”

The solar sector

According to Carmen Correas López, Policy Adviser at SolarPower Europe, “the situation for the solar supply chain is quite different… we are struggling quite a bit”.

Correas López pointed to the ingot and wafer portions of the PV supply chain as experiencing the most struggles due to the energy-intensive nature of production.

To address solar supply chain challenges, the Net Zero Industry Act is crucial, she said, stating that the call for 30GW across the whole supply chain, together with the resilience criteria that the Act offers, will help the industry to stay alive.

However, Correas López stated that “in reality, the projects don’t happen due to administrative burden and insufficient OPEX”.

OPEX, or the lack thereof, was a reoccurring theme throughout the discussion, also highlighted by another solar representative on the panel.

Francesca Fabris, European Projects and Facility Manager for Italian solar module producer FuturaSun, also pointed to the need for greater OPEX support and clear implementation guidelines for the Net Zero Industry Act.

And while the Innovation Fund is a good resource on the European level, she said, it is difficult to demonstrate the financial maturity of a project when applying to the Fund.

According to Fabris: “What we need is a strong and solid vision: more support for the manufacturing, not only for the end users.”

And while permitting is less of an issue for solar, the sector is calling for clear auction rules across Member States as a critical way to maintain a competitive landscape.

Marine energy

The stark contrast between the challenges faced by marine energy, as opposed to the more mature sectors of wind and solar, was obvious throughout the discussion.

Eunice Silva, Senior Technical Project Manager of wave energy converter developer CorPower Ocean, explained that because the sector is still in the “disruptive innovation landscape,” wave energy needs competition to create the market.

“If the US is developing [wave energy] it will put pressure on us to move faster and embrace collaboration and partnerships.”

One of the main challenges facing wave energy, explained Silva, is the need for CAPEX and OPEX support to make the early-stage commercial farms viable for investors.

Silva also suggested clear targets for wave energy be laid out in the EU Energy Roadmap, coupled with faster site and grid permitting. This will result in developers feeling more secure to go ahead with projects, she added.

Also commenting on marine energy was Rémi Gruet, chief executive of Ocean Energy Europe.

Gruet concurred with Silva that one of the major struggles for innovative technologies is securing funding, a challenge that is placing Europe squarely behind the US and China.

He explained that for the first time Europe’s ocean energy sector recently received 120 million euros from Horizon, whereas the US has invested $100 million annually over the past five years.

And speaking with a Chinese tidal company representative: “For his next 100MW farm he was getting the same conditions as for his prototype project, 50% off capex paid and a 320 euros feed-in tariff per megawatt hour.”

This raises questions about our competitiveness, stressed Gruet.

Tools in the regulatory quiver

Representing the European Commission on the panel was Jacek Truszczynski, Deputy Head of Unit, Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs.

Truszczynski said: “With the Net Zero Industry Act, we are playing catch up, we are trying to make sure that we have industrial excellence in technologies where we are losing market share, such as wind and solar.”

“We are at a moment in the policy cycle where there will be a request for new ideas. But we have to make sure that this request for new ideas does not come at the expense of refocusing on implementation.”

Truszczynski acknowledged that OPEX is problematic with some member states distorting markets more than others. At EU level, he recommended a form of fixed premiums and tariffs should be lowered for energy-intensive industries.

“We are aware [of the problem]: we believe that in the next commission in terms of industrial policy, ensuring a level playing field will be a central topic.”

Truszczynski believes the Net Zero Industry Act will bring relief through concrete measures to support access to markets, procurement and auctions.

He also feels positive about the impact of gigafactories coming online in Europe, as they will reduce the cost of production.

Furthermore, Truszczynskion predicts over capacity from Chinese production will persist only for three to four years, eventually evening off and narrowing the price gap.

“We have a good framework in place…its now down to implementation.,” said Truszczynskion.

Originally published on enlit.world