"They no longer create any sizeable added value and therefore the reason for their existence no longer exists. This is a basic law of the free market, even if it sounds unfair to those who put so much enthusiasm, time and money into a new technology," he says.
no longer unique
Until now, Weller explains, there has been a clear distribution of tasks in German wind energy: manufacturers have made turbines, private operators have erected them, and utilities have bought the resulting output. "There is a high probability that this situation will change within the next few years. To understand this process and its consequences is of vital importance for all stakeholders," he says. "In our economy the only businesses that survive are those with some kind of defensible uniqueness. In other words, their added value cannot be copied or taken over easily by other members of the market."
The added value of private wind turbine developers was their role as market pioneers. "Being more interested in the environmental aspects of energy production than in economic profit, they enabled the growth of the market despite its missing profitability. They acted as pioneers, not as business people." Now they are no longer needed and their role as developers will be taken over by other members of the market: by wind turbine manufacturers, by utilities, and by professional developers, like those in the UK and US. "Integrating manufacture and operation makes the difference between an unsuccessful business and a successful one. Such a concept failed in the US, but there the merging of production and operation was done too early, before stable structures could be generated by the support of pilot customers," explains Weller.
"In all three cases the private operator is in a weak position because of his very low added value," says Weller. This consists of little more than the act of buying and erecting the system. In face of the new competition the private operator will have to reduce his profits or leave the market. "His role as pioneer is over and he does not create enough value to survive as a member of a competitive market."
The consequences of such a market evolution -- if it is allowed to proceed -- are far reaching, argues Weller. The focus will turn from large to very large turbines, perhaps offshore; the concentration on utility-grade machines will cause an industry shake-down, forcing some manufacturers out of the market; windy sites will be preferred, leading to a high concentration of turbines in a few locations; public acceptance of wind energy will shrink; and the rate of growth of the German wind market will slow.
The key to preventing such a scenario is to increase the added value of private wind plant development, says Weller. Private operators could secure their future by adding new capabilities such as delivering "guaranteed" energy by combining wind with biomass or biogas generation, or by providing energy related end-user services. "Whatever course chosen, today's private operators will have to professionalise, they will have to make a full time business out of their activities," he concludes.