Price pressure

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The drive to reduce the cost of wind power was a recurring theme of this year's European Wind Energy Association conference. Nowhere was the issue of cost versus quality more hotly debated than among manufacturers. From NEG Micon, Torben Bjerre-Madsen explained why his company was asking its suppliers to reduce the cost of their goods and services by up to 20%, or risk being dropped in the future. "In the process of making turbines more competitive we have looked at a number of areas. The key is development, but what is also very important is cost price," he said.

But in a heated response, Aloys Wobben of Germany's leading turbine manufacturer, Enercon, said this approach could compromise quality. Wind turbine makers should encourage their vendors to co-operate and invest in new production techniques or new manufacturing capacity; they should not be forced to reduce prices with a consequent reduction in quality and increased risk to the wind turbine owner. "When manufacturers make the mistake of screwing our vendors they will produce definitely lower quality. I hope that other manufacturers will not go in this direction. The price for some machines is very cheap but the risks are very high."

Both sides of the argument are right, said Alex Kulpecz from new developer Windforce diplomatically. "The real answer is that the whole industry is going to have to produce better quality and at cheaper prices. You are not going to be able to rely on subsidies for ever. We must look at the future; how are we going to work together to bring down costs and increase quality? Otherwise, there will be another industry that comes along and eclipses us."

Tom Pedersen of Vestas agreed. "We are going to have to step up our whole organisation and professional quality. I do not think we are there yet, but we are going to work hard."

In a discussion on whether the EU's research and development program should concentrate on supporting development of bigger turbines, said that larger wind turbines do not always lead to a lower cost per kilowatt hour. The industry is focussing hard on larger turbines, he said. "But what the market is looking for is low cost electricity in large quantities. We are not by any means convinced that larger turbines are what people want."

What manufacturers are facing is demand for larger wind power stations, made up of the most effective turbines available, said Pedersen. "We are seeing some very very large contracts rolling in. The players on the field are those who buy 2000 MW coal plants. That puts a lot of demand on us as suppliers."

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