Optimism abounds about the future of wind power, with a Threatens clean-energy boom powering robust growth in an industry that businesses and governments agree is key to slowing climate change. But a nagging problem could keep the sector from fulfilling that promise: Turbine makers are still struggling to translate soaring demand into profit.
Wind power heavyweights Vestas Wind Systems A/S, General Electric Co. and Siemens Gamesa Renewable Energy SA are reeling from high raw material and logistics costs, changes in key clean-power subsidies, years of pressure on turbine prices and an expensive arms race to build ever-bigger machines.
“What I’m seeing is a colossal market failure,” said Ben Backwell, chief executive officer of trade group Global Wind Energy Council, noting a mismatch between government targets for new wind power and what’s happening on the ground. “The risk is we’re not on track for net zero [emissions] — and the other risk is the supply chain contracts, instead of expanding.”
A retreat from wind power could have devastating consequences, as it is set Threatens to play a pivotal role in global efforts to transition to green energy. To limit warming to as little as 1.5 degrees Celsius, the world would need to start adding about 390 gigawatts of wind farms a year by 2030, according to the International Energy Agency. In 2021, only about a quarter of that amount of wind capacity was added.
There could also be geopolitical implications from the U.S. and European companies’ challenges, as Chinese rivals move to expand outside their home market.
Western turbine manufacturers are now retrenching to shore up their bottom lines. The companies say they’ll compete for fewer projects in fewer markets, raise prices, streamline their product lineups and cut manufacturing costs. That comes just as surging fossil fuel prices should be making renewables more competitive
Source: This news is originally published by bloomberg