Wednesday, January 15, 2025

Wind Power Stalls as Coal Holds Strong in EU

By Irina Slav - Jan 14, 2025


Last year, the European Union’s wind power generation capacity supplied a fifth of the electricity that the bloc consumed.

Some of the most wind-energy-friendly countries in Europe are failing to attract new bids in auctions.

This year, the UK will be spending more than $2 billion on curtailment payments to wind energy producers.






The European Union has been funding wind power as a priority in energy policy. Buildout has been fast and sizable—and yet the bloc remains more dependent on coal than wind. This dependence could deepen instead of vanishing because the pace of new capacity additions is slowing down.

Last year, the European Union’s wind power generation capacity supplied a fifth of the electricity that the bloc consumed, according to recently released data from WindEurope, the lobby group. WindEurope warned, however, that the newly added wind turbines in 2024 were a lot fewer than the EU needs to build every year in order to hit its own wind power targets for 2030.

“Europe is not building enough new wind farms. For 3 main reasons – a) most Governments are not applying the good EU permitting rules – they’ve got to follow Germany’s example here; b) new grid connections are delayed; and c) Europe is not electrifying its economy quickly enough. The EU must urgently tackle all three problems. More wind means cheaper power which means increased competitiveness”, WindEurope’s chief executive, Giles Dickson, said last week.

According to some transition advocacy outlets, things are not as grim as WindEurope paints them, however. Ember, for instance, recently suggested that Europe is on track to generate more electricity from wind turbines than it generates from coal—but for this to happen, it would need to keep building more of the turbines while retiring coal power plants faster.

Coal generation in Europe last year dipped by 7% in 2024 while wind power generation rose by 3%, and if this year sees the same changes, wind would overtake coal, Ember said, adding that this would constitute a major transition milestone. It would be the first time a non-hydrocarbon source of electricity has generated more than a hydrocarbon source in a major consumption region, Reuters’ Gavin Maguire reported.

Whether this would happen, however, depends on two things, one of which is the weather, and the other is government funding for wind power projects. The slowdown in new additions suggests a decline in investor interest as wind installations become more expensive to build and return less money to operators and developers—in the UK last year, wind power operators were paid more to turn their turbines off than they were for electricity supplied to the grid. This year, the UK will be spending more than $2 billion on these curtailment payments—payments for wind energy not generated.

This could become a problem in the EU as well and is one of the limitations of wind energy along with solar. When there is too much output and no way to take the supply to demand sources, the electricity essentially gets wasted, but operators would need to get paid for their trouble operating the turbines—otherwise, a few curtailments later, they would be on their way to bankruptcy court, threatening the transition.

Yet there is also the simple issue of overcapacity, where Denmark offers a case in point. One of the most wind-friendly countries in Europe, Denmark last year boasted a record 58% of its electricity generation came from wind turbines. However, at the last government tender for new capacity, no bids were submitted—because with the breakneck capacity growth from recent years, returns have diminished enough to sap investor interest in new capacity.

Wind, like solar, has been hyped as the perfect energy source that generates electricity but not emissions—even though wind turbines feature a lot of hydrocarbon derivatives in their components. However, the weather dependency factor has been a limitation that is drawing more attention now that it has become more obvious during the winter Dunkelflaute in Europe. Another limitation—economics laws and, more specifically, the law of diminishing returns. One can build a thousand wind turbines, but when the wind doesn’t blow, these thousand turbines will generate just as much as a hundred—zero.


By Irina Slav for Oilprice.com


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