Europe’s transition to renewable energy sources in 2023 is marked by a significant contrast between the solar and wind sectors, as reported by Rystad Energy. Solar installations across the continent have exceeded expectations, while the wind sector faces hurdles that hinder its growth. According to Rystad Energy’s modelling, the growth in solar capacity additions in 2023 is expected to surpass 30% compared to 2022. By the end of the year, Europe is projected to have over 58 gigawatts of new solar capacity. Notably, the rooftop solar segment has taken the lead, accounting for 70% of all newly installed solar in Europe, reflecting the region’s commitment to clean energy.
Germany, after briefly conceding the top position to Spain in the previous year, is making a remarkable comeback in 2023. It is expected to achieve an 84% annual growth, reaching a record high of 13.5 gigawatts of total solar photovoltaic (PV) capacity. Spain, on the other hand, faces challenges in maintaining its momentum, despite its outstanding performance in 2022. Additionally, emerging markets like Poland and the Netherlands are witnessing growth primarily fueled by a surge in rooftop installations, a trend gaining traction across the continent.
Vegard Wiik Vollset, the Vice President and Head of EMEA Renewables Research at Rystad Energy, commented, “Rooftop solar is driving the transformation of Europe’s renewable energy landscape, from a niche market to a powerful force in reshaping the continent’s energy mix. However, wind energy – including onshore and offshore, both of which were previously on a robust growth path – has faced hurdles that could hinder its expansion. These evolving trends present both challenges and opportunities for Europe as it races to decarbonize while maintaining a stable energy supply.”
However, the wind energy sector, including onshore and offshore, is facing challenges that may hinder its expansion. Permitting bottlenecks and rising supply chain costs are holding back onshore wind developments, leading to an estimated 11% drop in new installations in 2023 compared to the previous year. Offshore wind capacity is expected to grow by only 2% this year due to project delays.
The challenges in the wind energy sector can be attributed to inflationary pressures, cumbersome permitting processes, and escalating interest rates. Despite these hurdles, Germany is expected to bring nearly 4 gigawatts of new onshore wind capacity online in 2023, demonstrating the country’s commitment to a diversified renewable energy portfolio.
In contrast, other major players in the onshore wind sector, such as Sweden and France, have managed to mitigate the downturn with reductions in annual installed capacity of 16% and 15%, respectively. However, Finland, Spain, and Poland are projected to experience annual decreases in installed capacity exceeding 30%.
The European offshore wind sector, once on a strong upward trajectory, is experiencing a modest 2% annual growth in installations in 2023. Delays to key projects in the UK and Denmark have highlighted the sector’s vulnerability, caused by increasing development costs, difficulties in securing desirable offtake deals, and regulatory changes.
The UK is now expected to miss its 2030 offshore wind targets by a larger margin than previously anticipated, with a maximum of 46.8 gigawatts of offshore wind capacity by 2030, falling short of the government’s 50-gigawatt target. Similarly, Denmark is projected to reach slightly over 10 gigawatts, below its 12-gigawatt target.
Despite these challenges, the offshore wind industry is showcasing resilience and long-term promise. France has entered the sector with the commissioning of its inaugural offshore wind facilities, Saint-Brieuc and Fecamp. The world’s largest floating offshore wind farm, Equinor’s 88-megawatt Hywind Tampen, off the coast of Norway, commenced operations in 2023, marking a significant technological advancement for the sector.
The question now is whether offshore wind can regain its growth trajectory. This would require significant changes to project development and permitting processes, as well as continued investment in research and development to maintain cost efficiency. Given the sector’s potential to contribute to decarbonization and economic growth, there is a strong incentive to overcome these challenges.