Safeguarding European energy independence impossible without securing wind industry and its supply chains
Current crisis threatens Europe’s continued position as leader in renewable energy.
Establishing a level playing field with manufacturers beyond Europe critical to protecting the European wind industry over the long term.
EU member state governments must make swift and bold decisions; action and cooperation necessary at all levels from regional to EU-wide.
Under the unprecedented current energy crisis, wind targets have been raised by EU member states, sending a clear signal about the vital role that wind will play in achieving energy security goals.
Europe’s future as a leader in renewable energy, and its freedom to make independent energy decisions, is jeopardized by the severity of the current energy crisis. The wind industry can contribute to providing Europe with energy security and independence through domestic, clean and competitive sources, but only if the European governments act swiftly to guarantee it is treated as a strategic industry.
With this in mind, Siemens Gamesa, a pioneer and one of the global leaders in the sector, published its white paper “Europe’s energy sovereignty is in imminent danger: why we need the European wind industry – and how to safeguard it,” today. The white paper highlights how the recent exceptional pressures on the wind industry led to a challenging financial situation, and the steps that can be implemented at a Europe-wide level to mitigate these risks and realize the green energy transition.
While benefits of utility-scale wind energy are well understood, the white paper calls for the sector as a whole to be declared an industry of strategic importance, in order to be able to instigate the technology and capacity necessary to deliver the European Green Deal.
Siemens Gamesa’s CEO Jochen Eickholt comments, “This white paper clearly states the simple safeguards that the wind industry requires from regulators to deliver European energy security and timely energy transition. Without intervention and cooperation among governments, manufacturers and suppliers, the energy transition here in Europe will become unattainable and Europe will lose its position as a global leader in the wind industry. The implications for European countries, and the rest of the world, are obvious. We urge regulators to take on board the five imperatives detailed in this white paper, and to work with us to deliver them. Without these safeguards, Europe’s energy independence is impossible.”
Why Europe’s wind industry needs support and why it’s crucial to safeguard it
European wind turbine manufacturers currently create the most advanced wind turbines for use both on land and at sea. The industry also plays a leading role within the green hydrogen production value chain, which will be crucial in the future for creating both sustainable industries and energy supplies for households. The industry not only serves the domestic market, it also creates new opportunities abroad.
However, the sector’s ability to produce profitably is currently threatened by auctions solely driven by price, slow permitting and, ultimately, soaring prices for energy, commodities and transport. On top of that, the pandemic resulted in a scarcity of key components for wind turbines, and Russia’s war of aggression against Ukraine worsened supply chain issues. As a result, wind turbine manufacturers are operating at massive losses and cannot invest to satisfy growing demands for wind energy.
The white paper also highlights the exceptional pressures the wind industry has faced in recent years, and what can be implemented at a Europe-wide level to mitigate these and deliver the green energy transition:
1. Turn targets into real opportunities and provide market visibility by accelerating the approval of wind power plant permits and establishing a visible project-pipeline for manufacturers and suppliers to load existing factories, and plan for new capacities.
2. Manage price risks and stabilize supply chains while compensating for inflation rises.
3. Support domestic innovation and foster technology competence. Energy security cannot be achieved through auctions solely based on price. Governments must get qualitative, not just quantitative, criteria correct in auctions.
4. Establish a level playing field across Europe to protect the European wind industry over the long term. This can be done through trade and/or fiscal policy instruments that would offset subsidies from other countries or through strict requirements in pre-qualification and participation conditions for tenders.
5. Consider the wind industry to be of strategic importance and invest today to secure its stability well into the future.
The white paper is clear throughout that, while none of these measures are unfeasible, coordinated action on an EU, international, national and regional basis will be required. Successful implementation will deliver clean energy, GDP growth, a continuation of technological leadership within Europe and long-term employment for hundreds of thousands of European citizens.
It also warns that, while there is little time left to initiate the necessary steps, this opportunity is not yet lost and that, with decisive leadership and swift action, the tipping point may yet be avoided.