German Government and banks came to the rescue this week Siemens Energy and its Spanish wind turbine manufacturing subsidiary, Siemens Gamesaafter registration Loss of 4 billion 588 million euros in fiscal year 2023.
The Spanish Government also announced that it will participate in the aid of the Zamudio (Vizcaya)-based company. The thickness of the hole is due to: A flaw in the design of some wind turbines this will lead the Germans to offer restructuring of strategyBut the bailout highlights the plight of the European wind industry, which is being punished by rising costs and pressure from competition, particularly wind. Chinese.
“Our wind industry is an example of European success. But we now face a unique set of challenges,” the European Commission president said on September 13. Ursula Von der Leyenin his State of the Union speech ‘salvation’ plan for the sector.
Europe wants to triple its renewable energy by 2030, and that means doubling renewable energy wind turbine needs The entire continent, however, is in a sort of perfect storm, with “uncertain” demand, a lot of “slowness and complexity” in issuing permits, component shortages and high inflation.
Pressure of production costs
International Energy Agency (IEA) predicts that: Costs of producing renewable energy will remain 10% to 15% above 2020 levels in 2024. Production costs have increased rapidly in 2022 after a period of sustained decline since 2010.
Price steelThe use of wind energy, the main building material for onshore wind energy, has increased by 270% in Europe. copper and aluminum Although the biggest growth occurred, it became 60% and 80% more expensive. freightAccording to the IEA, it has increased almost sixfold. In both cases, although they have fallen from these high levels, prices are still high.
These prices and the increase in financing costs Increases in interest rates are affecting the viability of some projects, especially offshore wind, causing large companies such as Siemens to seek support from governments or halt their investments.
This situation Danish giant OrstedIt recorded a loss of 2 billion 667 million euros in the first nine months of this year, compared to a profit of 2 billion 550 million euros last year. After scrapping two offshore wind projects in the United States, this week it announced the exit of a consortium in Norway and the resignations of chief financial officer (CFO) Daniel Lerup and chief operating officer (COO) Richard Hunter. the environment is “challenging and changing”.
chinese competition
In the midst of these internal problems, International Competition It is growing with a potential leader: China. The Asian country went from having a 35% market share of new turbine installations worldwide in 2018. It will exceed 50% in 2021. Last year, for the first time, a Chinese manufacturer Goldwinexceeded Vestals According to Bloomberg NEF, it ranks first in the world wind turbine suppliers list, although 90% of its production is for the domestic market. The two were ahead of the Americans G.E., in third place. After that, GhostAnother manufacturer based in China (incidentally the manufacturer aiming to build a battery factory in Extremadura) Siemens Gamesa And Mingyang They were tied for fifth place.
“The European energy ecosystem may become as dependent on China in 2030 as it was on Russia before the invasion of Ukraine, but of a different nature but with the same intensity, unless coercive measures are implemented,” he warns. Spanish Presidency of the Council of the European Union in the road map to promote the continent’s strategic autonomy (DurableEU).
Chemistry CEO basfMartin Brudermüller told the Frankfürter Allgemeine this week that Europe had already lost this race. “The Chinese are technically better and also more profitable,” said himself, one of the supporters of the project. world’s largest offshore wind complexThe ‘Hollandse Kust Zuid’ park, located in the Dutch part of the North Sea, and with it the chemical giant, plans to decarbonise some of its production.
CEO Siemens EnergyChristian Bruch responded to these remarks during the presentation of the results by reassuring: “This is not about protecting the market from terrorism Chinese competitorsbut to create a level playing field.” The German manager then focused on: renewable auctions. Most countries’ clean energy competitions are price-based, but the industry is demanding that other criteria such as sustainability or CO2 footprint are also reflected. “We are not talking about unbundling the market, but about establishing criteria that are important for us as regions and countries to have a sustainable industry. It is not a matter of who does it, it is a matter of where it is done and what will happen in terms of sustainability and sustainability. The footprint of CO2 and the clarity of these issues “How it is reflected in the auctions,” he explained.
“If we have appropriate solutions, we can follow China’s level and surpass it internationally. However, for this we need to solve our problems first. “And most importantly, there are countries and regions where I would question whether there is a level playing field,” he added. The European Commission’s wind energy package aims to address these challenges by: facilitating companies’ access to finance — through the Innovation Fund and with risk mitigation guarantees from the European Investment Bank (EIB) — but also with faster clearances and helping countries improve the design of their auctions to include pre-qualification criteria to ensure cybersecurity, environmental protection and the ability to meet requirements. project commitments.
structural changes
But not all problems are new. Europe’s first wind turbine manufacturer in September 2021, before the pandemic, Vestalsannounced that it would close its factories lauchhammer (Germany), viveiro (Spain) and Esbjerg (Denmark). few months ago Siemens Gamesa Who advanced the closing? A Coruña and Cuenca. In both cases, this was due to company restructuring because production at these facilities was focused on the type of smaller wind turbines that the market was beginning to demand due to innovations in the industry to produce more efficient machines.
This week, on November 21, Siemens’ energy subsidiary will make a presentation your new strategic plan, There will be no major liquidation, but the products and markets on which the wind division will focus will be defined. Most of his work is available Spain, Germany and DenmarkAlthough the company has assured that it will not plan any layoffs, one of the biggest unknowns is what the ultimate size of each of these markets will be.