The German offshore wind industry, which has been growing for years, currently has almost 24,500 full-time employees in Germany and a total of 9 billion euros of revenue last year. This is the result of a comprehensive analysis in the new wind:research study of more than 3,000 market participants across the entire wind industry (onshore and offshore), all value creation stages and regions. The distribution of the ultimately approx. 800 market participants, who are currently active in offshore wind energy, shows surprising emphases in the south and west: for example, Baden-Wuerttemberg dominates in R&D as well as in engineering and North Rhine-Westphalia in the components area. While maintaining the current expansion target is threatening to cause a loss of more than 8,000 jobs in the industry, increasing the expansion target will increase the number of employees by up to 10,000.
Current analysis of value creation in the offshore wind sector
In the past ten years, offshore wind energy has grown strongly in Germany and has also led to high value creation with high investments. This shows clearly in both the variety of different market participants and in the number of jobs. In 2011, wind:research created a study together with PwC that for the first time comprehensively analysed market participants, employment, overall value creation, and in particular their regional distribution in Germany. Now wind:research has again analysed the value creation and employment of the offshore wind industry in Germany based on the current situation. In addition to the regional distribution – which is specified by federal states and distribution across the different stages of value creation – the focus lies on the future development of the industry.
In the German offshore wind energy industry in 2018, almost 800 market participants with around 24,500 employees generated more than 9 billion euros of revenue. Following major advances in recent years the industry is currently at a crossroads. It is stagnating on the basis of the recently set political conditions, such as the changes to the EEG in 2014 and 2017. Limiting the expansion will have a decisive influence on the further development after 2019 and thus also on the development of market participants as well as their number of employees and revenue – across all stages of the value chain.
Distribution of market participants with surprising priorities
The value creation, both in terms of employee numbers and revenue, is distributed across Germany: there is a high level of employment in Baden-Wuerttemberg (R&D, engineering) and North Rhine-Westphalia (components), while the areas of transport, assembly, project development as well as O&M traditionally are strongly represented in the North of Germany. In contrast, (plant) components are also manufactured in many Western and Southern German locations. Striking is the high proportion of Southern federal states in the area of engineering as well as R&D. The area of financing traditionally focuses on the Frankfurt am Main region. Many market participants from Northern Germany (e.g. wind turbine or foundation production) depend on companies from the engineering or supplier industry (e.g. steel construction, gears, etc.), whose regional focus lies in Southern Germany.
Although, according to the high market anticipation, strong consolidation has occurred, new market players benefit on account of their offer of innovative and technologically advanced products, solutions and services. In addition, new production sites are being built by existing market participants, e.g. for offshore wind turbines in Cuxhaven by Siemens Gamesa Renewable Energy.
Jobs until 2035 – Expansion targets and their effects in three scenarios
Based on the 771 market participants as well as their number of employees and revenue, a decline in the number of employees and a decline in sales in the next few years, due to the slowdown in orders in the German market, is expected in all scenarios. This predicted trend is expected to continue until 2022/23.
Expansion target decisive for the value creation of German offshore wind energy
Of the approx. 1,000 market participants in 2011, just under 800 are still active due to the consolidation. If the current expansion target is not raised, a reduction in the number of employees from around 24,500 (2018) to around 16,000 (2035) has to be expected. The expansion of offshore wind energy in Germany to reach the climate protection targets of the German Federal Government by 2030 (65% target) can generate up to 10,000 additional jobs. Particularly in the scenario “Power-to-X”, in which the dependency of network expansion declines due to the use of new storage technologies and Power-to-X-capacity amongst other causes, the number of employees increases to more than 35,000.
Other countries, such as the United Kingdom and the Netherlands, are actively promoting the expansion of offshore wind energy and are developing industry and value creation. Therefore, a change in the current framework conditions in Germany is necessary in order to avoid falling behind and to maintain or expand its own value creation (market participants, revenue and employment).