The Black Sea has seen a bustle of activity over the last few years as governments and pan-regional bodies author studies on its offshore wind potential to make a meaningful contribution to the energy transition in the region. The recent announcement of the EU-backed decarbonisation project named ‘Black sea floating Offshore Wind (BLOW)’ [i] aiming to install a 5 MW floating wind turbine offshore Bulgaria and link it to a gas platform in the Black Sea shows the interest the region is garnering.
Offshore wind is very tempting for the various stakeholders in the Black Sea region and is one of the solutions to the energy trilemma, providing sustainable electricity at a sensible price, while keeping the scale and a relatively high level of supply security. However, for the industry to reach its full potential there are a number of challenges that need to be addressed…
A brief overview of the Black Sea region
For those further away from Europe, the Black Sea is located between south-eastern Europe, the Caucasus, and Western Asia and has a pivotal role in history. It was a busy waterway on the crossroads of the ancient world: the Balkans to the west, the Eurasian steppes to the north, the Caucasus and Central Asia to the east, Asia Minor and Mesopotamia to the south, and Greece to the southwest.
Bordered by six countries, the Black Sea is bounded to the north by Bulgaria, Romania, and Ukraine, and to the east lies Russia, Georgia and Turkey. With a surface area of about 420,000 square kilometres, the Black Sea is fairly shallow at an average depth of about 160 metres.
The benefits offshore wind power could bring to the Black Sea region
Offshore wind power has the potential to provide a number of benefits to the Black Sea region. The region’s wind resource is suitable for economically viable offshore wind opportunities and has relatively shallow waters, making it an ideal location for large-scale wind farms. It is also relatively close to significant economic centres such as Istanbul and Bucharest, providing the opportunity to link offshore wind capacity to local and regional electricity grids.
The development of offshore wind power in the Black Sea could also bring major economic benefits. The region has well-established industrial activity and high levels of human capital and technical expertise. Local companies and organisations are increasingly looking to diversify their resource base and benefit from the growth of the renewable energy industry.
Potential challenges that may arise
While there are many benefits to the development of offshore wind power in the Black Sea, there are also a number of challenges that need to be addressed. For example, the lack of consenting and permitting frameworks in the bordering countries where they may lack clarity on the legal frameworks required for offshore wind development can make it difficult for developers to secure the necessary permits and clearances from local authorities.
In terms of grappling with the necessary policy requirements, there is a good track record. Romania re-introduced long-term Bilateral Power Purchase Agreements (PPAs) in 2020 and will soon implement a CfD mechanism with first auctions this year. Prior to this legislative change, restrictions on PPAs were seen as the main obstacle preventing investments in new power generation, especially in the renewables sector. Georgia will also be implementing this to speed up renewable energy development.
Another challenge is the political and economic risks associated with investing in the Black Sea region. Many countries lack the financial resources and expertise to secure investment for offshore wind developers, this needs to be understood in their policy formation. There is also the risk that political changes could result in disruption to projects.
There are of course significant geo-political risks in this region; from the Russian invasion of Ukraine and the annexation of Crimea to Russia’s support of separatist regions of Georgia, specifically Abkhazia. The impact of this is a disruption to the energy market by Russia’s aggression and energy ‘blackmail’. It has ensured that self-sufficiency and energy security is now a serious topic, and this will drive renewable energy development and intermarket connectivity by pushing energy security up policy agendas everywhere.
In addition, the Black Sea is home to an abundant array of marine resources. These range from fisheries to oil and gas fields, which can put the offshore wind industry in conflict with other activities. Also, the region’s grid infrastructure is not yet advanced enough to accommodate large-scale projects.
So, is the Black Sea ready for offshore wind power?
The answer is a resounding ‘yes’! Like all emerging markets, there are challenges and risks, but the potential that the offshore wind industry offers this region makes the effort to overcome these hurdles worthwhile.
Offshore wind power has the potential to make a meaningful contribution to the energy transition in the Black Sea region, but to do so the lack of regulatory and policy certainty, competition with other industries for space and resources, poor grid connection, and the geopolitical risks all need to be addressed.
It is clear that a concerted effort will be needed from all the countries of the region in order to create the right conditions for offshore wind to thrive. In the sea of opportunities, it is important to understand the conditions of your desired site, as not all sites will be economically feasible, but with the right approach and expert support, I expect to see this market and it’s projects develop.
How ABL Group supports the offshore wind market
At ABL Group we can provide the aforementioned expert support across all segments of the offshore wind market, supporting clients across the globe in the delivery of offshore wind projects at every stage of a project or asset’s lifecycle.
Our renewable energy technical advisory arm OWC, is the leading technical expert at early-stage development of offshore wind projects and markets. From desk top studies, to leasing and auction support, owner’s engineering and technical due diligence, OWC will help ensure your project is constructable and bankable. For a discussion on how we can support you, contact your nearest OWC team or ABL Group office in the region. https://abl-group.com/renewable-energy-engineering-consultants/offshore-wind/
By John MacAskill
Group Managing Director, Renewables