Dutch economy to gain from UK, German offshore wind boom - ABN
LONDON (Reuters) - The Dutch economy is set to benefit from a booming offshore wind industry in neighbouring Britain and Germany as its oil and gas industry can offer services in offshore construction and maintenance, ABN Amro said.
High development costs for renewables, triggered by government subsidies, have come under attack in Europe as they are largely financed through rising household energy bills.
Moody's Investors Service said in November that European programmes to invest in renewables "will continue to drive energy bills upwards for the majority of EU countries, while the growth in disposable income is expected to remain weak".
Dutch bank ABN Amro took a differing view in a research note on Tuesday, arguing that the green boom was benefitting the country's overall economy.
"The Netherlands has a long tradition of knowledge development in the offshore oil and gas industry ... Dutch industry is particularly good at foundation construction, installation and maintenance," it said in a research note.
"In other words, the German and UK ambitions to significantly grow their offshore wind industry can give an impulse to the Dutch economy and the entire value chain involved in the construction, transportation and maintenance of offshore wind turbines," the bank added.
Germany has less than 500 megawatts (MW) of offshore wind power installed but plans to boost capacity to 10,000 MW in the next 10 years.
Britain plans to raise its offshore power share from 3 percent in 2010 to 15 percent in 2020, equivalent to 16,000 MW.
The Netherlands itself plans to generate 16 percent of its energy from renewable sources as the country's domestic oil and gas reserves dwindle.
ABN Amro said the renewable energy boom had contributed to Germany's economic growth, and that Dutch companies could benefit from involvement abroad.
"In the past year, partly thanks to the Energiewende (Germany's energy policy), the German energy industry made a huge positive contribution to Germany's economic growth," it said.
Although the Netherlands is not an active player in making wind turbines, ABN Amro said Dutch companies could be involved in around 60 percent of Europe's energy chain.
COSTLY SUBSIDIES
A subsidy-fuelled boom in German renewable power generation has led to oversupply and pulled down wholesale power prices by almost 40 percent in the last three years.
While this price drop has benefitted the renewables industry and large energy-intensive businesses with access to the wholesale power market, household energy bills have soared as subsidy costs have been passed on to small consumers.
The fall in wholesale prices has also undermined profit margins at power generators as coal and natural gas prices have remained high relative to the electricity the fuel generates.
In response to soaring household bills and struggling utilities, the German and British governments have announced plans to reduce subsidies and slow the rise of household bills, although both remain committed to raise renewable power generation further, including offshore wind.
(Reporting by Henning Gloystein; Editing by Ruth Pitchford and Dale Hudson)
