WindEurope and the chief executives of the top five turbine manufacturers in Europe wrote to the president of the EU Commission today, urging her to support the industry’s supply chain or risk failure to meet the bloc’s Green Deal ambition.
The authors of the letter state that the European wind industry is going through “unprecedented tough times” with investments halted across the EU as well as the closure of factories which make turbines and components in Germany, Spain, and Denmark over the last two years.
Green Deal ‘at risk’
This is at odds with the EU’s stated ambition to expand wind energy from 190GW today, to 450GW by 2030, and to 1,300GW by 2050 – by which time wind would account for half of Europe’s energy needs, according to the signatories.
The problem is not a lack of ambition on renewable energy among EU member states or of public opinion, which largely favours wind energy, the authors wrote.
They added: “The problem is that the rules and procedures that public authorities use to permit wind energy projects are too lengthy and complex. Europe is simply not permitting anything like the volumes of new wind farms that you and national governments want to build.”
They said the result of permitting issues was that the market for new wind turbines is “less than half of what it should be” to achieve the EU’s Green Deal target of 40% renewable energy by 2030.
The EU built 11GW of new wind capacity last year, they wrote – well below the 32GW per year needed to hit targets.
The letter was signed by WindEurope chief executive Giles Dickson and the chief executives of Siemens Gamesa, GE Renewables, Vestas, Nordex and Enercon.
Supply chain woes
The small size of the market is “really hurting” the wind energy supply chain because developers are bidding on auctions for new wind farms at the lowest possible price in order to win the “small volumes of permitted projects on offer”.
The authors added: “But that comes at the expense of the EU wind supply chain which struggles to meet those cost levels.”
Meanwhile, the wind industry is further hampered by high prices for raw materials, “disrupted” supply chains, and “uncoordinated trade defence measures”.
The authors said: “The net result is that Europe’s wind industry is cutting jobs, with each factory closure taking a toll on the wider supply chain.”
They added that the European wind industry accounted for 300,000 jobs but that 50,000 jobs had been lost in Germany alone in the last six years.
The China challenge
The authors pointed to the challenge posed by China’s growing wind industry and said European manufacturers were competing with the country in the global wind market.
They said: “But we are losing ground as Chinese manufacturers expand across Asia, South America, and Africa…and China is starting to win orders to build wind farms in Europe.”
Accelerating the competitive deployment of renewables and reducing energy imports would not lower EU citizens’ energy bills, but also bring jobs and investment.
The authors said: “The Green Deal assumes more green jobs in Europe, not less. Energy security requires more home-grown wind energy with technology that is developed and made in Europe and less imported energy.”
The authors set out a four-point plan to tackle the problems they see in the wind industry:
- Simplify permitting to accelerate the construction of new wind farms and grid investments and enforce the Renewable Energy Directive, which imposes deadlines on decisions as a top priority;
- Strengthen the European wind industry by moving away from price as the single criteria for auctions, which favours Chinese competitors, and move towards models which reward added value – such as sustainability, technology which helps balance the grid, support for jobs, and European content requirements;
- Encourage EU members to avoid negative bidding in wind auctions – in which the industry pays governments to build wind farms whether or not the market electricity price exceeds the auction price – to avoid putting pressure on the supply chain and forcing it to relocate to low cost countries;
- Support innovation to help Europe retain primacy in technology such as floating offshore wind platforms, improvements to fixed bottom and onshore wind farms, green hydrogen, grids, and digitalisation.