Offshore wind: the new renewables challenge

Within this framework, Italy is taking its first steps and installations are still very limited. It was only in 2022, after an authorisation and industrial process that lasted almost 15 years, that Renexia's 30 MW plant in the Gulf of Taranto was started up. However, interest and initiatives have grown dramatically in a short time, reaching - according to the latest Irex report, the Althesys think tank on the renewables sector - almost 8.5 Gw in 2023. The projects under authorisation at Mase for the first ten months of 2024 have a similar capacity to the whole of 2023. If we also consider the pipeline of announced projects, this comes to almost 30 Gw. However, it will remain to be seen how many will actually be realised. In fact, there are many factors that affect the feasibility of a project, including windiness, seabed depth, distance from the coast and thus connection, operation and maintenance costs. While the windiness at sea is greater and more regular than on land, the costs are much higher, with the submarine connection often a very significant item.

The resulting electricity costs are not always competitive. The average European electricity production cost (Lcoe) for an offshore plant is estimated to be 100.2 euro/MWh in 2023 compared to 76.6 euro/MWh for onshore wind (source: Irex).

Italy, even at sea, enjoys less intense winds than Northern Europe, but above all has very deep seabeds that make floating plants necessary (i.e., with the wind turbines installed on floating platforms instead of anchored to the seabed). This solution is still under development with characteristics and costs to be explored. For example, the auction bases in the UK in 2023 were £44/MWh for fixed versus £116/MWh for floating.

This makes investment returns lower than in other countries. While in the North Sea and the Baltic, average Lcoe are 80-85 euro/MWh (source: Irex), in Italy under current conditions (auction price assumed by the Fer 2 decree) we are still far from economic sustainability, with floating costs estimated at around 200 euro/MWh.

Italy's costs are higher, not only because of the need to float, but also because of very complex and lengthy authorisation procedures. For example, the maritime spatial management plans needed to design offshore were only approved in October, more than three years late. Support mechanisms are still on stand-by, with the Fer 2 decree finally approved but still awaiting operational rules.

Despite the uncertainties, the projects are numerous, with many committed investors and some initiatives aimed at creating a national technology chain. Italy's potential is theoretically very high, with an estimate of between 330 and 520 Gw depending on the capacity factor and constraints assumed (source: JRC). Of course, how much will actually be realisable, for both economic and environmental reasons, is much smaller. These are, however, significant numbers, and the announcement of a platform assembly centre to be built in Augusta (Syracuse) is recent, while Renexia will build a factory to produce turbines in the province of Chieti.

Offshore development could therefore bring spin-offs to the economic system, generating allied industries and employment. The 490 MW Mio park project that the Green Arrow investment fund is developing in Calabria, for example, could create €4.5 billion in shared value over the next thirty years and 1,300 jobs in the first three years. Significant numbers on paper that hopefully will not remain so.