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Monday 5 October 2009

New German offshore wind farms could create 30.000 jobs

The German cabinet has approved a plan for 40 more North Sea and Baltic wind parks that could create 30,000 jobs and power 8 million homes

On Wednesday, Germany's cabinet approved plans to dedicate special zones off its northern coast to house up to 40 offshore windparks that could provide electricity to over eight million households.

The plan involves setting aside zones between 12 and 200 kilometers (seven and 124 miles) off its northern shores. Of the 40 wind farms, 30 would be in the North Sea and 10 in the Baltic Sea. Of these, 25 have already received approval—22 in the North Sea and three in the Baltic Sea.

In total, the plan envisions German offshore wind parks holding up to 2,500 wind turbines. German Federal Transport Minister Wolfgang Tiefensee also said that the plan could create about 30,000 jobs.

According to ministry statements, the wind farms should generate around 12,000 megawatts by 2030. In strong winds, this would be equivalent to the energy generated by 12 medium-sized nuclear plants. "From our planned farms in the North Sea alone, we could provide 6.8 million additional homes with electricity," Tiefensee told reporters, adding that the farms in the Baltic Sea could provide energy for 1.5 million more households.

The plan is meant to double the current amount of energy supplied by wind in Germany to 12 percent by 2020. The country's national climate protection targets envision it satisfying 30 percent of its energy needs using renewable resources by 2030.

Reviving A Neglected IssueWhile many in Germany are happy about the decision, others think that the government has been too slow to act on this issue. Critics point out that plans to boost Germany's offshore power production have actually been in the works since the beginning of the decade. In 2002, the coalition led by then-Chancellor Gerhard Schröder—made up of the center-left Social Democratic Party (SPD) and the Green Party—passed the German government's strategy on offshore wind energy development.

Felix Matthes, coordinator for energy and climate protection at the Institute for Applied Ecology in Berlin, told Spiegel Online that the current grand coalition—made up of Chancellor Angela Merkel's Christian Democrats (CDU) and the Social Democrats, which have been in power since 2005—has done "too little, too late to advance things decisively now."

Whether the plan can ever be achieved is another question altogether. There are strict environmental regulations that need to be considered. Likewise, many of the farms will be built very far out at sea. Since waves are stronger here and the water sometimes even 40 meters (130 feet) deep, construction and maintenance costs will be high. "The construction of a wind farm will easily consume between €500 million and €1 billion ($735 million to $1.47 billion)," Hermann Albers, the president of the German Wind Energy Association (BWE), told Spiegel Online.

Connection & Financing IssuesLikewise, it can be hard for investors to commit to these projects because, as Albers explains, there have been problems connecting the wind energy back up to the power grid on land. Before the power companies will lay cables out at sea to connect the wind farm with their grids, they want a guarantee that the project has financing. But before the banks will finance a wind farm, they want a guarantee that the power companies are going to be able to connect the wind farm to their grid.

There is a clause in German infrastructure legislation related to this that says power companies must provide a connection. But, Albers says, "up until now, at best, that has been a friendly statement of intent."

But this is part of the reason why only Germany's energy giants—such as E.on (EONGn.DE), Vattenfall Vattenfall or General Electric Deutschland—are investing in wind energy. According to Albers, so far, around 70 percent of investment in the 25 approved wind farms comes from these large companies.

This development is also causing some concern in the Federal Environemt Ministry. The worry is that progress will be slow if only the large energy companies invest in wind power. This is simply because wind remains a risky investment for them, especially when compared to their more profitable ventures with nuclear or coal-fired energy.

"I really doubt Merkel's business know-how on this issue," says Hans-Josef Fell, the energy spokesman for the Green Party. "If these gigantic wind farms start up out at sea while German nuclear reactors are still working, then we will have a huge excess of energy. Power prices will collapse—and the bottom line is that wind power will be less profitable than it should be."

Security Issues
Yet another reason for investors in wind energy to worry has emerged. In a recent interview with the Süddeutsche Zeitung, Albers said that investments were being blocked because of security issues raised by the Bundeswehr, Germany's military. Wind farms can reportedly disturb the Bundeswehr's radar facilities. The moving rotor blades on the closely packed wind turbines cause a sort of radar shadow that conceals airplanes from detection. Albers noted that this problem had blocked a deal worth €400 million in the state of Lower Saxony, and he said that another in Schleswig-Holstein was also in danger of being cancelled.

A spokesperson for the Bundeswehr said that, while it was looking for a solution to this problem, "the monitoring of German air space was one of the German military's basic duties and could not just be suspended arbitrarily."

So Albers remains worried. He says the Bundeswehr should be updating its radar technology to deal with this issue and that the military is preventing "investment and environmental protection."

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