Siemens Gamesa and Vestas are both losing money and to reach ambitious goals, the European wind industry must rein in its attempts to reduce the cost of building wind turbines.
Siemens Energy reported losses of more than €600 million, while Vestas reports an operating loss of €894 million.
K2 Management believes that unless the relentless drive to reduce the cost of wind energy is perfected, the ambitious wind energy targets set by European governments will not be met. By consolidating product portfolios and focusing research and development away from simply increasing capacity, beleaguered wind turbine manufacturers can begin to stem the huge losses experienced by companies as they bear the brunt of wind price inflation. commodities and raw materials, and development time constraints that prevent smooth operation. and consistent order flows.
“It is clear that a fundamental economic imbalance exists when, in one of the fastest growing industries in the world, which has huge growth targets this decade, its key manufacturing stakeholders are causing such huge losses,” Will said. Sheard, Director of Analysis. and Due Diligence of K2 Management. “This is undoubtedly a multifaceted challenge, exacerbated by the current macroeconomic situation. But the wind industry, and the energy transition in general, can be better served if wind turbine manufacturers take their foot off the gas when it comes to driving innovation and simply work to provide a small portfolio of core products, in large quantities, to help developers of wind farms.
To achieve these high-capacity goals, wind turbine manufacturers say a decade to reduce the LCOE of wind power is becoming unsustainable.
With the LCOE for wind power now at a highly competitive point, there is an opportunity for wind turbine manufacturers to scale back their ambitions for new and increasingly efficient equipment and standardize on offshore wind on turbines in the 15-16 MW range.” .
More broadly, the continued push for larger wind turbines may also be contributing to the disruption of developers’ most sought-after methods of acquiring wind turbines, as many are torn between “playing” and building projects with currently available turbines, or wait and see if they release bigger, more efficient machines in the future.
“Governments cannot legislate to force our industry to focus on project delivery, and in fact many of their policies put us on this current path, so it is up to us as an industry to collectively agree on the type of machines that will be available. until 2030?, Sheard added. “It sounds drastic, but the longevity of our key manufacturing partners may depend on such measures.”