Intelligence Briefings

A Word About Wind

A Word About Wind intelligence briefings bring news, insights and opportunities surrounding the global wind industry.

The must-read newsletter for the financial side of the global wind industry.

Welcome to our new look intelligence briefings. You can now find the latest content from each briefing here on our website. Feedback? Email


EU promises help in 2024 – but is it enough?

September 21, 2023
  • The EU has promised support for European turbine makers in 2024
  • WindEurope warns European firms could lose out to Chinese rivals
  • Sany has launched an 11MW machine and is eyeing European deals

"It was the best of times, it was the worst of times..."

It is with this famous couplet that Charles Dickens started 'A Tale of Two Cities', but the oft-repeated line came to mind as I considered the European turbines market following two stories this month. In Europe, we have 'A Tale of Two Markets' where Chinese manufacturers are making major inroads while local firms struggle.

The European market looks positive for Chinese players. On 9th September, Sany Renewable Energy set out its plan to develop onshore turbines with headline capacity of up to 11MW at the Husum Wind conference in Germany, and said it is looking to win deals in Europe. As with other Chinese firms, it can make these investments due to healthy profit margins at home.

By contrast, European rivals have spent the last five years struggling to adapt to a market driven by competitive tenders, which have squeezed profit margins and led to a ‘race to the bottom’ in the industry. Siemens Gamesa has attracted headlines in 2023 because of technical problems in onshore models, which led to Siemens Energy saying this week it is restricting sales of its most troublesome machines. Its problems are not just down to tenders, but those cost pressures have surely had an effect.

These stories show in microcosm why WindEurope is warning of the “very real risk” that Chinese turbine makers will destroy their European rivals. It says the “cheaper turbines, looser standards, and unconventional financial terms” give Chinese turbine makers an unfair advantage in Europe, as well as posing a “cybersecurity threat”.

This is not a new warning, but it appears that policymakers are finally listening.

State of the Union

On Wednesday 13th September, European Commission President Ursula von der Leyen announced in her annual ‘State of the European Union’ speech that she is aware of the difficulties facing European turbine makers. She said the EU plans to take action in 2024 with a ‘Wind Power Package’ to support these firms.

She said this support would focus on these areas:

  1. Faster permitting for wind projects across Europe
  2. Improvements to auctions in EU member states
  3. Skills, access to finance, and stable supply chains

The industry reaction to this intervention has been positive: the EU has finally taken note of the pressure facing European turbine makers. But why has it been so long in coming? Companies in the European wind supply chain have complained about the damage of the ‘race to the bottom’ for the last five years, but these challenges were easier to ignore in more benign economic times. The EU now has to catch up due to inflation and supply chain disruption after Covid and Russia’s invasion of Ukraine.

It should not have taken high-profile problems at businesses, and failed tenders in EU countries including Spain, to spark such a response. But that's where we are.

WindEurope has welcomed the EU’s areas of focus. It highlighted that around 80GW of wind projects are stuck in bureaucratic processes across Europe, and said the EU will only be able to meet long-term renewable energy targets if it can unblock them.

The association also said countries should move away from tender structures that put extra pressure on wind companies, such as with the use of negative bidding in Germany, and to systems that mean decisions are not being made on price alone. Future tender processes in EU member states could attach a value to using 'made in Europe' turbines. Countries can’t make a major energy transition ‘on the cheap’, as much as they may like to.

And yet, we have concerns about the EU’s approach.

First, a ‘Wind Power Package’ in 2024 does not give European turbine makers, and firms throughout the supply chain, the confidence they need now. It is good to hear a package is on its way, but the supply chain needs more urgency. The next few years are crucial for the survival of European turbine makers, so there's no time to waste.

Second, the EU may hail the wind industry as a “European success story”, but it will rely on leaders in its 27 member states to put in place policies that will also see the value of producing turbines in Europe. The case is clear in manufacturing hubs such as Denmark, Germany and Spain, but the EU has to find ways to show why other countries are better off if they can buy European turbines – even if this comes at a higher cost. We must recognise the limits of the EU's power.

Third, reducing permitting bottlenecks in Europe may help European turbine makers, but it helps Chinese firms too. More projects means more potential deals for turbine makers wherever they come from. Making it easier for companies to build wind farms is beneficial, of course, but it wouldn’t compel firms to use European turbines.

The most pressing area for manufacturers is how the EU can promote stable supply chains. It will need to find ways to help manufacturers be more profitable; gain more visibility over long-term order pipelines; give them an advantage in wind tender processes; and possibly even provide more support for wind turbine companies because it sees them as crucial strategic industries. It will face a tough balancing act to do this while also reassuring countries that wind energy will remain cost-effective.

It won't be easy, and we expect a great deal of discussion about how it can achieve this as we head into early 2024.

For the long-term health of wind turbine manufacturing in Europe, though, this is vitally needed. These issues have gone unaddressed for too long.

Top stories

The lack of offshore wind bids in the UK's fifth Contracts for Difference auction process could spark much-needed reforms and help developers make a stronger case for onshore wind. Richard Heap looks at why this 'failure' might not be so bad.

Ørsted has announced $2.3bn potential impairments at its US offshore wind projects, while RWE won an underwhelming seabed leasing auction in the Gulf of Mexico. We look at the current challenges facing developers in the US offshore market.

It is three months until business and political leaders gather in Dubai for the COP28 conference, which could spur further investment in the global wind industry. But an oil and gas powerhouse is an unlikely location for action to reduce $7trn of subsidies paid annually to fossil fuel firms.

Upcoming events

November 16, 2023
Boston, US

Financing Wind Offshore conference is devoted to exploring the state of offshore wind in the US. We'll investigate the challenges the industry faces in achieving its goal of installing 30GW of offshore wind capacity by 2030.

Sign up to the A Word About Wind intelligence briefing