US boom and large offshore wind projects supercharge Vestas' Q3 turbine orders

Vestas announced its highest quarterly order intake for two years in Q3 2023, with its order book swelled by deals for large offshore wind projects and a growing number of US onshore projects. 

Vestas transports a nacelle for its V236-15.0 MW turbine

Listings of 21 turbine orders posted to the Danish manufacturer’s website show an announced total of 4.04GW for Q3 this year. 

This is the highest capacity of announced orders for a single quarter the company has listed since Q2 2021, according to Vestas' data. 

The Q3 data for 2023 was also significantly higher than previous quarters this year, topping Q2’s announced total of 2.33GW and Q1’s announced total of 3.3GW. 

Sydbank analyst Jacob Pedersen expects Vestas to have received a further 600MW in unpublished orders in the quarter.

The results also stand in contrast to Vestas’ primary European competitor Siemens Gamesa, which is currently battling a serious quality control crisis and has not publicly announced a turbine order since May. 

Foremost among Vestas's wind turbine orders in Q3 of this year were deals for two large offshore wind projects in northern Europe. 

Vestas announced a contract in late September to supply 76 of its V236-15.0MW turbines to the 1140MW Baltic Power project in the Polish Baltic Sea, currently being developed by Polish utility Orlen and Canadian developer Northland Power. 

It will also supply German utility EnBW’s 960MW He Dreiht offshore wind farm in the German North Sea with 64 of the same V236-15.0MW turbines. 

IRA boost

The US also accounted for a large portion of the total orders, with Vestas winning contracts to supply 1.09GW of new onshore wind farms in the US during Q3. 

In a research note, Sydbank's head of equity research Jacob Pedersen singled out the impact of US President Joe Biden’s landmark Inflation Reduction Act of stimulating growth in the US wind market. 

“This is the highest order intake in a quarter from the US since Q4 2019. We certainly [don't] expect that the order party from the US stops here – quite the contrary. Restoration of the subsidies for wind energy in the Inflation Reduction Act will be a 'gamechanger', and Vestas will benefit greatly from this in the coming years with the company's solid position in the US,” Pedersen said. 

Among the orders secured by Vestas for the US market in Q3 were deals to supply several undisclosed repowering projects totalling more than 300MW. 

Balance starting to shift

Pedersen expects Vestas to have sold onshore turbines at an average price of €920,000/MW in Q3 – down from the €970,000/MW recorded in Q2, though still significantly higher than average selling prices in recent years. However, he added that over time, loss-making orders will take up less of the order book, and more profitable orders will boost the company's bottom line.

“We model a total order intake of €5 billion [in the third quarter of 2023]. It will be a record for a single quarter measured in value,” Pedersen said. 

He added that despite the record-breaking figures, a large Q4 will also be needed if the company is to reach its stated aim of securing orders for 12.5GW of wind turbines in 2023 overall. 

Announced order totals for the first three quarters of the year currently stand at 8.86GW. 

Pedersen did not mention Vestas' rival Siemens Gamesa in his Q3 research note, but had previously said that the widespread quality control issues now disrupting the company could benefit the Danish manufacturer.