NZIA: Act Now Or Europe's Wind Turbines Will Be Made in China

“Today we inaugurate our second solar plant Zagórzyca, doubling our solar capacity in Poland to around 120 MW. Our first solar plant Stepien is already in commercial production, and another one, Lipno will be commissioned in 2024. We are also maturing other opportunities within onshore renewables and battery storage in Poland, in line with our market-driven power producer strategy,” says Olav Kolbeinstveit, senior vice president for onshore and markets within Renewables at Equinor.

Zagórzyca will be in operation for 30 years and will annually produce 61 GWh of power, which is equivalent to electricity consumption of 31,000 Polish households.

Equinor’s wholly owned energy trading house Danske Commodities will be responsible for marketing and bringing the electricity from Zagórzyca to the Polish power market.

Around 500 people were involved in the construction of Zagórzyca that comprises 111,000 solar panels over an area of around 55 hectares.

“By using local contractors, we contribute to building knowledge and skills within solar developments in the Polish supplier industry,” says Wojciech Cetnarski, CEO of Wento.The EU wants to massively expand renewables and strengthen Europe’s clean energy supply chains. But its Net-Zero Industry Act (NZIA) falls short and needs beefing up. If Europe gets NZIA wrong, it’ll end up building wind farms with turbines manufactured outside of Europe, many of them in China. New data shows what’s at stake economically.

Wind energy is key to Europe’s energy security and climate targets. The EU want it to be 43% of Europe’s electricity consumption by 2030, up from 17% today. That means building 30 GW of new wind farms every year.

Nearly all wind farms Europe has built up until today use turbines made in Europe. There are over 250 factories around Europe making turbines and components. But there are already bottlenecks in Europe’s wind supply chain. Offshore foundation manufacturers and installation vessels are fully booked for several years. The wind industry is having to buy power cables, gearboxes and even steel towers from China. We’re building a few new factories but not enough for the massive expansion of wind energy that Europe now needs.

Huge investments are needed now: in factories, ports, grids, vessels, cranes and skilled workers.

Need to beef up the NZIA

The rapid expansion needed in Europe’s wind and other clean energy supply chains requires public policy and public financial support. The EU totally gets this – which is why they came up with their Green Deal Industrial Plan. But the NZIA which is at the heart of the Plan, falls a long way short of what is needed. It badly needs beefing up.

The European Parliament and EU Member States in the Council are now amending the NZIA text.

A key thing to strengthen are the non-price criteria in renewables auctions. It’s good that these will now be compulsory. Using only price in auctions has driven a ‘race to the bottom’. Bringing in non-price criteria will reward the social, economic and environmental value that Europe’s clean energy industries offer. They will incentivise innovative solutions to sustainability, biodiversity protection and system integration.

But the current text is timid on what criteria can be used:

• it talks about “supply chain resilience”. The most resilient supply chain is local. Let’s spell out that auctions should give extra points to developers who offer European technology;
• let’s add something on cybersecurity. We don’t want to build equipment that’s exposed to cyber-attacks;
• let’s add “due diligence” too. We can’t be sourcing kit from places with questionable human rights records, or loose standards on labour and environmental protection; and
• let’s drop the idea that you don’t need to apply non-price criteria whenever costs go up by 10%. It’s impossible to apply in practice and defeats the purpose for having non-price criteria in the first place.