The North Sea could become Europe’s largest green power plant, as nine countries in Europe have pledged to increase the capacity of offshore wind farms by eight times their current level before 2050.

The plan, announced by the French president, German chancellor and the European Commission chief, along with other leaders, aims to boost the North Sea offshore wind capacity to 120 GW by 2030 and 300 GW by 2050. It was announced at the North Sea Summit in Belgium.

But sceptics, including major wind companies and analysts, are saying that offshore wind is being crippled by a “tsunami” of cost hikes and the target may not be met. Offshore wind has been promoted as a major component of Europe’s plan to wean itself from Russian gas.

The plan was announced by French President Emmanuel Macron, German Chancellor Olaf Scholz and European Commission chief Ursula von der Leyen, along with Belgium, Denmark, Ireland, Luxembourg, the Netherlands, Norway, and the UK’s energy security minister, Grant Shapps.

The "potential we have in the North Sea in terms of offshore wind is huge," said Fatih Birol, executive director of the International Energy Agency (IEA).

The leaders said they recognise that this will require massive investment, and have stressed the importance of co-ordination to avoid failure. The leaders also highlighted the need to protect the offshore wind farms from sabotage and espionage. The investment required to reach the target is estimated to be around €800bn ($878bn), and wind energy companies have stated that significant state funding will be essential.

“We are unlocking our offshore energy ambitions,” said Belgium’s energy minister, Tinne van der Straeten. “Co-ordination is absolutely essential. If each of the nine countries acts alone, we’ll collectively fail. Planning is at the core of everything.”

Additionally, the plan includes the development of “energy islands” and carbon capture projects.

The leaders emphasised the importance of producing the necessary infrastructure in Europe and creating European jobs.

Several countries provided details on their current offshore wind farm capacities, with Britain having 45 offshore wind farms producing 14 GW and aiming to expand to 50 GW by 2030, Germany with 30 projects producing 8 GW, the Netherlands with 2.8 GW, and Denmark and Belgium both with 2.3 GW. France aims to expand massively to 40 GW by 2050.

The nine-country plan represents a further doubling of goals announced at a similar four-country summit in Denmark in May 2022, three months after European energy markets were affected by Russia’s invasion of Ukraine.

The plan’s success depends on significant investment and state funding, and there are ongoing supply problems with key turbine parts. However, the leaders’ commitment to co-ordination and standardisation of infrastructure provides a solid foundation for the ambitious targets.

But offshore wind projects are being “hit by a tsunami” of inflation and interest rate hikes, warned Mads Nipper, CEO of Denmark-based Ørsted, the world’s largest developer of offshore wind projects. He spoke at the summit.

His warning came as the IEA's executive director Fatih Birol added: “If we and Europe just wait and see, don’t come up with very clear signals to investors, the European economy will suffer.”

Additionally, Germany, Belgium, the Netherlands, Denmark and the UK may miss their 2030 targets, said analysts at BloombergNEF. They predict that the five nations will only reach a total of 88 GW by 2030, about three-quarters of their stated goals. 

European wind developers and turbine makers have been pressing for tax breaks akin to those wind farms will get under the Inflation Reduction Act (IRA), signed into law by US President Joe Biden in August 2022. It offers generous tax breaks for wind and other clean-energy projects and for manufacturing of US-made major renewables components.

For example, Ørsted had previously said in March that the giant Hornsea 3 wind farm off the UK’s east may be “at risk”.

The company said that the UK government’s 2023 Spring Budget was “disappointing” and that the giant 2.8-GW project needed government tax breaks.

Ørsted said that the offshore wind project, which would be the world’s largest, would go “on hold” if additional support were not available by the end of April. It has been slated to enter production in 2026 and cost GBP8bn ($9.6bn).

The owner had cited soaring costs. The project secured a contract for difference (CfD) in a UK government auction in 2022 with a minimum price guarantee of GBP37.35/MWh – in 2012 currency – for 15 years. In March, electricity prices were GBP130/MWh. 

"Since the auction there has been an extraordinary combination of increased interest rates and supply chain prices," Duncan Clark, Ørsted’s UK & Ireland head, had said.