Net Zero Industry Act: The goal is to increase installed capacity to 420 GW by 2030

On February 6, the European Parliament and the Council reached a crucial agreement on the Net Zero Industry Act, marking a significant step forward in consolidating the European sustainable technology industry.

This agreement lays the foundation for a future where wind energy, among other clean technologies, stands out as a fully European product, thereby strengthening Europe's energy sovereignty and independence.

Net Zero Industry Act: Increasing Capacity from 220 GW to 420 GW by 2030

The core of the Net Zero Industry Act lies in the innovative design of auctions for wind energy, which now emphasize clearly defined prequalification criteria mandated by law. These criteria, which go beyond simple economic evaluation, aim to prioritize bids that offer the greatest collective benefit, marking a departure from traditional cost-based auctions.

The EU's ambitious goal is to increase the installed wind energy capacity from the current 220 GW to 420 GW by 2030. However, the current rate of wind turbine construction meets only half of the expected demand, pushing the European supply chain to intensify its efforts to bridge this gap.

In this context, the Net Zero Industry Act raises the standards for auction participation, imposing prequalification criteria that include cybersecurity, corporate responsibility, and project feasibility. Additionally, national governments are incentivized to favor bids that excel in sustainability, energy system integration, and supply chain robustness.

Indexing Auction Prices to Reflect Production Costs

The EU's 2023 wind energy initiative had already outlined 15 immediate actions to promote the European wind industry, including the adoption of prequalification criteria for wind auctions.

The subsequent endorsement by 26 member states and over 300 entities in the wind sector of the European Wind Charter demonstrates broad support for this approach.

More concretely, the Net Zero Industry Act encourages governments to consider indexing auction prices to reflect potential variations in production costs and to assess the impact of negative bids on the development of renewable energies.

These negative bids, when unrestricted, can transfer additional financial burdens to consumers or the wind energy supply chain, increasing project risk and, consequently, capital costs, especially in a high-interest rate environment.