European wind turbine manufacturers are raising their voices to warn of the profitability problems throughout their supply chain and the consequences that this situation could have for a sector that is essential for the decarbonization of the Old Continent. “We are losing many suppliers: bankruptcies are continuous. It has taken a lot of effort to build a sector that, unfortunately, is being relocated at an accelerated pace,” says the CEO of Nordex Acciona and new president of the continental wind industry association, José Luis Blanco, in his first interview after taking office this same year. Thursday. “The disappearance of companies throughout the chain is not a risk: it is a reality. We need to return to profitability to be able to help European energy independence and be a useful sector for Europe’s energy security.”
Is it an SOS? “Yes, in some ways yes, if legislative measures are not taken. The sector is in losses and cannot be financed continuously with money from its shareholders: it has to be profitable, and for that it needs volume and a stable framework to be able to compete,” Blanco tells EL PAÍS while calling for a “deep reflection.” ”. “Europe’s energy dependence on Russian energy resources has brought us here, and policy must take into account diversification and not put all our eggs in one basket again.” [China]. We cannot trust a single supplier of anything, neither energy nor components for renewable energy,” he warns.
The European wind turbine design and manufacturing industry, on which around a quarter of a million jobs depend across the continent, faces a reality similar to that which led to the virtual disappearance of photovoltaic panel factories a decade and a half ago. back: its Chinese competitors – up to 50% cheaper, according to WindEurope itself, and with generous public support schemes – have not stopped winning orders in recent times. And they have deepened the deterioration of the income statements of the main names in the sector – among them, the Spanish-German Siemens Gamesa and Nordex Acciona itself -, already burdened by the rise in raw materials prices and financing conditions, each ever stricter with the unstoppable rise in interest rates. Its red numbers also contrast with the growth prospects of this technology in the coming years, in which the Twenty-Seven will have to meet increasingly demanding decarbonization objectives.
Underutilized factories and losses
“Our industrial capacity is underutilized,” says Blanco. “Contrary to what it may seem, in the midst of the biggest energy crisis of the century, Europe has installed less than in the past. There is a disconnect between the medium and long-term objectives, which are very good and have increased, and what is being delivered in the short term. Europe not installing at the speed it should to achieve the 42% objectives [de generación renovable] in 2030. And that leads to underutilization of factories and losses.”
Although he recognizes that the sector is at a “critical moment”, the new president of WindEurope believes that “finally” the public authorities are beginning to “understand” the situation. “Now, energy and industrial security and independence are one on the political agenda, and many countries are already taking action.” The only thing missing, they say, is for “the priorities of companies, society, the European Commission and the Member States to finish aligning.” Among his main demands is the improvement of market design and the acceleration of permits, “which is the main bottleneck to attracting demand.”
Last week, the president of the European Commission, Ursula von der Leyen, announced a support package for wind energy, with an acceleration in permits or an improvement in auction systems. And she stressed the importance of the future of the sector continuing to be written in the Old Continent. At WindEurope, however, they still do not have the fine print of these measures.
Race for value
“What we are asking for is to move from a race for the lowest value to a race for value,” says Alfredo Parres, head of Renewables at Hitachi Energy and new vice president of WindEurope. “We must defend a powerful European industry, choosing actors that meet a minimum of criteria based on where they manufacture or safety. I think we have a good technological background, and now we have to think about how to take it to the necessary scale to make it competitive.”
Parres, who describes the situation that the sector is going through today as “delicate”, far from the “upward curve that we all expected”, says he has “no doubts about future demand, due to the commitments to sustainability and electrification, but he does have doubts about the speed and the ability to develop a supply chain to support all of this.” “We are talking about an industry and a technology that was born in Europe: we cannot forget this factor”
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