Already a powerhouse in the offshore wind industry, the North Sea region is ramping up capacity while becoming a magnet for other green energy industries.
Boyden's perspectives on the news and trends that are transforming industries
The North Sea has long played a major role in the shipping and oil and gas industries. The tide is turning as North Sea countries, including Belgium, Britain, Denmark, Germany, the Netherlands and Norway, place bigger bets on offshore wind power. The sea’s strong winds, soft floor, and fairly shallow depth make it ideal for wind farms set farther from the coast, which yield higher capacity. Esbjerg, Denmark has emerged as the hub of Europe’s offshore wind industry. Two-thirds of the wind turbines off the European coast were made there, and the city plans to nearly triple capacity by 2026.
In May 2022, the European Commission signed a joint declaration with Germany, Denmark, Belgium and the Netherlands. The “Esbjerg Offshore Wind Declaration” highlights the role of North Sea offshore wind in strengthening EU energy security and pledges to expand the four countries’ combined wind capacity to 65GW by 2030 and 150GW by 2050. In September five more countries signed on and the target was raised to 260GW.
The North Sea has potential in other areas of the green energy sector as well. The carbon capture and storage market is picking up speed, as is green fuel production. The variability of the North Sea’s wind can be used to produce green fuels like hydrogen by splitting water molecules with electrolysers. In a joint declaration with industry leaders, also signed in May, the European Commission pledged to increase production of renewable hydrogen. Doing so will require the EU to significantly ramp up its manufacturing capacities for zero and low-carbon equipment such as electrolysers.
Beyond the energy sector, the North Sea is also drawing data centre companies. Below its depths runs a vast and growing network of cables for data traffic, 13 of which have been installed since 2020, according to data firm TeleGeography. And as The Economist reports, “North Sea countries are an excellent place to store and process data.” This is due to a cold climate to provide cooling, as well as low electricity costs, highly skilled workers and “enlightened” data laws. Data centres are multiplying, and cloud giants such as Amazon Web Services (AWS) and Microsoft Azure have built server farms there.
The northern migration of these industries could have implications for countries on the Norwegian Sea as well. Last year Aker Horizons, an investment firm focused on green energy and green industry, announced a joint venture to develop sites for power-intensive industries in Norway as part of its project to establish a green industrial hub there. Industries such as steel and manufacturing, which have high energy requirements, are also heading north. As Nikolaus Wolf, Chair of Economics and Economic History at Humboldt University Berlin says, “Abundance of energy tends to attract industry”.