Author David Delgado Country Managing Director, Spain

*Floating Turbine at Bilbao’s port installed by Saitec, RWE and Ferrovial (demo project DemoSATH).

The offshore wind industry in Spain offers a promising combination of a well-established supply chain and experienced professionals, along with the exciting potential of floating projects. However, there are challenges to overcome, such as the lack of regulatory framework that can accelerate the industry’s growth.

Between the latter half of 2022 and the first half of 2023, Spain’s offshore wind industry experienced rapid and significant progress. This was achieved through the drafting of the roadmap to pave the way for future development, the approval and announcement of 5 development zones, and the completion of various environmental assessments[1]. Additionally, the government set a target of achieving 3 GW of offshore wind energy production within this decade. Political will and increasing interest from the private sector have been key drivers behind these advancements, as there is an urgent need to exploit Spain’s immense offshore-wind-energy potential.

*Approved offshore wind development zones. Source: Spanish Ministry for Ecologic Transition (MITECO).

In just a matter of weeks following the announcement of the development zones, over a dozen developers enthusiastically expressed their interest in participating. They submitted over 40 project- proposals, totaling more than 14 GW of potential offshore wind capacity. This surge of interest clearly demonstrated the industry’s rapid momentum and growth during the strong 12-month period between 2022 and 2023.

Unfortunately, the political will and momentum needed in the offshore wind industry can be subject to rapid changes. As experienced professionals, we are well aware of the significant impact that these changes can have on project development timelines, also with the risk of incurring substantial costs.

The political turmoil in Spain has delayed the release of the regulatory framework for the offshore wind market, which predominantly consists of floating projects. This delay should not be understated, as it adds further pressure to the existing challenges faced by the floating sector in general.

The interconnection of various factors such as regulation and policy, supply chain, business models, and financing, further compounds the difficulties.  

Developers are hampered by political uncertainty leading to decreased expenditure and a need to maintain investor interest. The Supply Chain cannot invest in R&D activities or bear project risks in the absence of supportive policies. Consequently, investors will question project feasibility and bankability, discouraging developers from meeting government decarbonization targets.  

While this is an oversimplification of the challenges in the industry (ignoring factors like interest rates, inflation, and technology standardization), it depicts the interconnection of the same problem affecting all stakeholders in the industry.

Although these difficulties in the Spanish industry persist, there is hope, fueled by its current momentum, the expertise gained from international projects, and recent EU funding initiatives. The allocation of EU funds for innovation in renewable energy and the involvement of infrastructure and harbor sectors to adapt to changing needs provide opportunities for growth and development. Spain can capitalize on its position by learning from the experiences of other EU countries and implementing a robust regulatory framework that fosters sustainability and collaboration among all stakeholders.

Despite only recently entering the Spanish market, I am optimistic about the immense potential in the local industry. Spain’s advantageous position allows it to draw from the extensive industry experience in the EU, where it has been a leading supplier.

As opposed to other emerging markets, the key differentiators for the Spanish / Iberian market are that they are ready to hit the ground running with the vast amount of include local experience they have, including knowledgeable developers and suppliers.

There are a number of developers specializing exclusively in floating wind, particularly active in more advanced markets such as the UK. This depth of experience facilitates a smoother transition to working on Spanish projects once legislation is in place. They can even leverage their expertise to advocate for favorable regulatory frameworks, drawing from successful strategies implemented in other jurisdictions while discarding ineffective approaches.

Unlike some other countries like Taiwan and Australia, Spain benefits from an extensive and well-established supply chain in the industry. This mitigates the typical challenges associated with “Local Content” requirements, which often impede project feasibility and economic viability. Spain already possesses the necessary infrastructure and expertise, obviating the need for novel solutions like Supply Chain Partnerships (SCPs) or other Local Content initiatives.

Furthermore, all stakeholders in the industry are highly knowledgeable and experienced, capable of addressing potential bottlenecks effectively. From harbor logistics and transportation infrastructure to human resource considerations, there is a deep understanding of the challenges involved. Importantly, there is recognition of the value in tapping into the local workforce, many of whom have gained invaluable experience from projects in northern Europe, either as expatriates or through collaboration with developers.

The country can learn from EU policies, frameworks, subsidy schemes, auction rules, and the development of a strong supply chain. Additionally, the early interest in investing in ports, harbors, and infrastructure will facilitate project realization. More importantly, it is crucial for Spain to capitalize on this moment and bring together industry stakeholders and regulatory agencies to establish framework and guidelines that will ensure the sustainability of the Spanish floating offshore wind industry from the beginning. The key is to maintain optimism and seek consensus to address the shared problem to achieve the common goal.

[1] See the official, government approved  Roadmap for the development of offshore wind and marine energy in Spain