Friday

24th Nov 2017

Focus

Clouds hang over EU wind industry, but sunshine ahead

  • Last year, Vestas installed more turbines in China than all Chinese manufacturers did outside of China (Photo: European Community, 2006)

Clouds hang over the European wind industry. Growth has slowed down and revenues have been disappointing, as the global economy shows little sign of recovering. At the same time, competition has grown fierce, notably from China. But while short-term forecasts are likely to remain gloomy, sunshine is forecast for the longer-term.

The latest omen came on 13 January, when Danish turbine manufacturer Vestas - the largest in the world - said it is planning to cut more than 2,000 jobs worldwide over the course of the year (one 10th of its total workforce).

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

The announcement came shortly after a warning that the company's 2011 profits were "expected to amount to approx 0 per cent". It was the third time in three years that the company issued a profit warning and slashed jobs.

"I can certainly understand if employees as well as people outside Vestas consider us to be in a state of crisis," chief executive Ditlev Engel told reporters in Copenhagen.

The short lifespan of the global wind industry has until now been one of exponential growth. Twenty years ago it barely existed. In 2011, it was worth €67 billion.

Europe, keen to play the world's climate change champion, has always been at the forefront. It has more turbines installed than any other region in the world - almost twice as many as the runner-up, China.

But growth has slowed. For the last two consecutive years, less turbines were installed in the EU than the year before. Official figures for the year 2011 are not yet available, but preliminary findings point in the same direction, says Julian Scola, communications director at the European Wind Energy Association, the industry's lobby group in Brussels.

Two factors are to blame, according to Scola. First, banks these days less easily agree to lend money. Second, the market has become globalised to such an extent that turbine manufacturers from all over the world are able to compete with each other.

"As long as there is a healthy market in Europe, turbines will be made in Europe," says Scola. "It is not viable to import. Turbines are absolutely huge. But Chinese companies may come to Europe and make them here."

They appear to already be doing so. Sinovel, China's largest turbine manufacturer and the second-largest in the world, recently opened up a European office in Madrid. It was not available for comment at the time of writing, but according to an article in The New York Times from 2010, the state-owned company aims to become the world's largest in the sector by 2015, with half of sales outside of China.

There is no immediate threat, according to Steen Broust Nielsen from Make Consulting, a Danish consultancy for the wind industry.

"Competition on the international market from China is still very limited," he says. "Many Chinese projects depend on Chinese funding. On a long-term basis, China's market presence will grow, but it will not continue to fund international wind project development."

The upside for European turbine makers is that they, too, can more easily enter foreign markets - something they do "very well" according to Scola.

"Last year, Vestas installed more turbines in China than all Chinese manufacturers did outside of China," says Michael Holm, director of communications.

After rain comes sunshine

Nobody, except for maybe the workers who lost their jobs, seems very worried. On the contrary, climate change and the continuing commitments made by governments to invest in renewable energy seem to ensure a bright future for the industry.

China in January announced it aims to source 20 percent of its power demand from wind by 2050 and to have a total installed capacity of 1,000GW, more than four times the global amount installed today.

"It will be a bumpy ride the coming years," says Scola. "But we expect very strong growth in the medium term. Given the commitments made by the EU to cut emissions, it is clear that the industry will have to expand."

Broust Nielsen, too, sees "huge potential" for the wind industry in the long term. "We definitely expect the industry to continue to grow. There are continued strong fundamentals for wind: energy demand will continue to increase; fossil fuel prices will continue to rise; and we expect climate change to remain an important driver for renewable energy."

As for Vestas, it expects to remain the world's biggest turbine maker. "We expect to gain market share," says Holm.

Wind energy in figures

Europe is the world's biggest fan of wind energy. But other parts of the world, notably China, are catching up fast.

Sahara wind and sun to power EU homes

This year, somewhere in Morocco, work will begin on the construction of what is to become a vast network of solar and wind energy farms in the Sahara to provide 15 percent of Europe's electricity.

Germany to cut solar energy subsidies

Germany's solar power industry could cool as Berlin plans to cut subsidies in a sector whose energy capacity output has successfully more than doubled the government’s projected target.

Denmark leads EU countries on wind energy

European wind energy is picking up as recently released statistics by the European Wind Energy Association show an upward spike in the number of wind farms created, amount invested, and energy generated.

Wind Energy

Europe is the world's biggest fan of wind energy. But other parts of the world, notably China, are catching up fast. EUobserver explores the issues in this section.

Irish crisis may complicate Brexit summit

Snap elections are on the horizon in Ireland over the future of Irish PM's right-hand woman, three weeks before Irish PM is due in Brussels for a crucial Brexit vote.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Energy Ministers Pledge to Work More Closely at Nordic and EU Level
  2. European Friends of ArmeniaLaunch of Honorary Council on the Occasion of the Eastern Partnership Summit and CEPA
  3. International Partnership for Human RightsEU Leaders Should Press Azerbaijan President to End the Detention of Critics
  4. CECEKey Stakeholders to Jointly Tackle the Skills Issue in the Construction Sector
  5. Idealist Quarterly"Dear Politics, Time to Meet Creativity!" Afterwork Discussion & Networking
  6. Mission of China to the EUAmbassador Zhang Ming Received by Tusk; Bright Future for EU-China Relations
  7. EU2017EEEstonia, With the ECHAlliance, Introduces the Digital Health Society Declaration
  8. ILGA EuropeFreedom of Movement For All Families? Same Sex Couple Ask EU Court for Recognition
  9. European Jewish CongressEJC to French President Macron: We Oppose All Contact With Far-Right & Far-Left
  10. EPSUWith EU Pillar of Social Rights in Place, Time Is Ticking for Commission to Deliver
  11. ILGA EuropeBan on LGBTI Events in Ankara Must Be Overturned
  12. Bio-Based IndustriesBio-Based Industries: European Growth is in Our Nature!

Latest News

  1. Irish crisis may complicate Brexit summit
  2. UK to call out 'hostile' Russia at EU summit
  3. EU calls for better disease prevention
  4. Eastern Partnership must not be deterred by Russian aggression
  5. EU awaits UK proposals in final push for Brexit breakthrough
  6. Berlin risks being 'culprit' for stalling EU, warns Green MEP
  7. Eastern partners, eastern problems
  8. Germany's Schulz under pressure to enter coalition talks