Posted on March 24, 2025
It’s an ill wind that blows nobody good.
And in Germany, it might be better if the wind didn’t blow at all after the European Union member moved to start dismantling its flagship Alpha Ventus project after just 15 years.
Despite its role as a pioneering wind farm, Alpha Ventus is being shut down — not because of technological failure, but because it is no longer financially viable without massive government subsidies.
For Canada, which hopes to use offshore wind to support industries like green hydrogen production, the German experience raises critical questions about the long-term economics of offshore wind power. Without sustained financial support, will Canada’s ambitious offshore wind plans suffer the same fate?
Germany has long been a global leader and pioneer in renewable energy. Alpha Ventus was built in 2009 as its first offshore wind farm, benefiting from generous state subsidies.
Onshore wind capacity additions to 2024.
Almost two-thirds of Gemerany’s renewable power comes from wind.
However, as those subsidies expired, the project became unprofitable. The guaranteed rate of 15.4 US cents per kilowatt-hour (kWh) that once supported the wind farm has now dropped to just 3.9 cents per kWh, making continued operation economically unfeasible.
The collapse of Alpha Ventus highlights a fundamental issue with offshore wind: it is expensive to build and even more expensive to maintain.
Unlike onshore wind farms, offshore projects face extreme weather conditions, costly maintenance, and logistical challenges that drive up operational costs. In Germany, even a country deeply committed to renewable energy, these financial pressures have proven too great to sustain early offshore wind farms.
Experts say the Canadian government must recognize the economic realities that have plagued offshore wind projects in Europe, namely:
• High Costs and Maintenance Challenges; Offshore turbines require specialized equipment, marine vessels, and skilled technicians for installation and repair, all of which drive up costs. Even minor breakdowns can take weeks to fix due to unpredictable weather and logistical hurdles.
• Dependency on Government Subsidies; Without long-term financial support, offshore wind farms risk becoming unprofitable once initial incentives expire. Germany’s shift away from fixed subsidies toward a competitive auction system in 2018 led to a sharp decline in wind farm expansion.
• Shorter-Than-Expected Lifespans; The premature shutdown of Alpha Ventus suggests that offshore turbines may not last as long as anticipated, further complicating financial planning for long-term projects.
• Intermittency and Grid Challenges; Offshore wind generation fluctuates with weather conditions. In Germany, periods of low wind — known as Dunkelflaute (dark doldrums) — have forced the country to rely on conventional power plants to fill the gaps.
Proposed offshore wind areas.
If Canada is to invest in offshore wind, experts said it must also invest heavily in grid storage and backup generation — natural gas — further increasing costs.
The conclusion comes after a report from the German Chamber of Commerce and Germany’s federal environment agency determined concerns it could lose its entire manufacturing base resulting in 150,000 job losses.
The closure of a turbine manufacturing plant by Danish windmill giant Vestsas in a former east German coal region raised additional doubts about whether the renewable power industry is capable of replacing jobs lost in the fossil sector.
However, an annual survey conducted since 2015 by labour union IG Metall showed that the mood within the industry has brightened significantly in recent years, with more than two-thirds in mid-2024 saying they expected a positive overall market development.
If Canada is serious about offshore wind, experts said it must ask whether offshore wind farms survive in the market without continuous government intervention. It must also seek to find whether there are more cost-effective renewable options, such as onshore wind or hydro, that could deliver similar benefits.
Germany’s wind sector has been at the forefront of global renewables for decades, even as they are struggling with the hard economic reality of offshore wind in general.
Delays to grid connections in Germany have pushed back a 2030 goal for 30 gigawatts of offshore wind by one year, with more than 80 turbines waiting for a link-up as of the end of 2024.
The government is working on integrating renewables into the network “in the best possible way,” the Economy Ministry said in a statement. It’s studying a “system optimization” for offshore wind that will help reduce grid-connection costs and reach expansion targets, it added.
