In signing off from Siemens Gamesa after three years that might diplomatically be described as ‘eventful’, I wrote to colleagues that: “I suspect it will get worse before it gets better, but it will get better”.
One of the first responses I received was very instructive: “When I joined more than 15 years ago, I was told that I was joining the sector with the brightest and most promising future. The problem is that it is a future that seems never to come.”
It is fair to say that that sums up much of the prevailing mood in the wind turbine OEM sector right now with all the major western OEMs struggling to turn a profit. It is not unusual to hear senior industry figures raising the spectre of the fate of the European solar manufacturing industry, long ago lost to the east.
And here is the paradox of the wind energy industry in 2022: if net zero and other decarbonization targets are to be met, the industry should be on the cusp of a growth phase that would dwarf anything experienced so far.
The question is whether the western manufacturing sector will be in any sort of shape to deliver that growth, or it will endure the fate of the long lost solar industry, a spectre now regularly raised by industry leaders.
Logic dictates that this is the moment to press down hard on the accelerator, designing the technology and building out the capacity required to quadruple installations between now and 2030.
Instead the news is full of stories of lay-offs, factory closures and eye-watering financial losses. And the resources required for the necessary investments are in jeopardy.
The issues are well known. The industry’s relief at surviving Covid relatively unscathed and its optimism about a green recovery are long gone, replaced by a supply chain crisis and a damaging imbalance between supply and demand of projects.
The resulting competition is fierce and not conducive to healthy margins.
And all this at a time when the case for wind is more compelling than it has ever been.
Whatever else he might plan, Putin cannot hijack the air. The climate crisis hasn’t gone away – as I write this much of Europe is being scorched in a brutal early summer heatwave.
Wind is a cost effective, inexhaustible and clean provider of secure energy that isn’t going to further poison the planet.
Somehow, however, that message isn’t hitting home anything like hard enough. At Davos late last month, the discourse turned back towards nuclear, shale and more large-scale fossil to overcome the energy crunch.
Many in the industry believed these arguments long since won, but the fight is ongoing, and I’m really not sure we are winning.
Where does wind go from here?
First, it is time to take the gloves off in the lobbying area. The fossil industry is more established, better resourced and more aggressive. The case for wind and renewables needs to be more forceful and more focused. We have been guilty of being too polite and too naïve, perhaps believing the overwhelming weight of argument is enough. It clearly isn’t.
I am reminded of the famous rapid rebuttal unit the Labour Party established before the 1997 election to fight the rising tide of misinformation and fear-mongering. That and a proactive, no-holds-barred approach to campaigning would be a step in the right direction.
‘Unaffordable arms race’
Second, the great hope for the manufacturing industry is clearly offshore, where margins have been better and exponential growth is coming. To reap the rewards, the industry needs an economic model that works.
It is far from clear that bringing to market a new and bigger turbine every 18 months is compatible with that goal.
Without impacting competition, it’s time to reconsider this unaffordable arms race. The OEMs currently create value for society and for their customers but not for themselves, and that has to change.
A new settlement on ‘value’
Finally, we will only win by working together: developers, OEMs, supply chain, governments and investors. The distribution of value is not currently working, and a new settlement is needed.
In the long run it will be to the benefit of everyone to have a sustainable and healthy manufacturing sector and supply chain.
It is time to find a path that is less eventful and provides a more consistent and predictable way forward to the bright future my colleague has been in search of for far too long.
Ben Hunt is the former head of corporate affairs at Siemens Gamesa, now an independent communications consultant and freelance writer