Guarantees for Siemens Energy
“The wind industry can and must support itself”
November 14, 2023, 12:19 p.m
Listen to article
This audio version was artificially generated. More info | Send feedback
Wind power is essential for the energy transition, but the industry is weakening. Should the state help to achieve the government’s goals? “State aid” should only be a temporary solution, says Philipp Godron from Agora Energiewende.
Siemens Energy needs help because of the problems at Siemens Gamesa, Orsted – the world’s largest wind project developer – is making billions in losses and is withdrawing from the USA. Is offshore wind power still a reliable part of the energy transition?
Philipp Godron: Yes, offshore wind power is an important component for a climate-neutral power supply. The advantage of these systems is that they achieve high full load hours. A gigawatt of installed capacity at sea can generate more and more continuous electricity than solar or wind power on land. The federal government has therefore increased the expansion targets for offshore wind power: from 8 gigawatts today to 30 gigawatts by 2030. By 2045 it should be 70 gigawatts.
So the massive problems of two big players are irrelevant?
The European wind industry has relatively continental roots. The manufacturers with the large market shares are Vestas, Nordex, Enercon and Siemens Gamesa. These are all European manufacturers. There is also GE Energy, an American company, which also has locations in Europe. All of these manufacturers have suffered from the collapse in wind development in Europe – and particularly in Germany – due to insufficient tender volumes and lengthy approval procedures. As a result, several of these companies have had, and some still have, economic difficulties. The result: They have reduced production capacity. If problems arise at individual companies, then that is initially not good for competition and expansion. But that doesn’t mean there isn’t a market of manufacturers that can meet the growing demand. The competition closes the supply gap. But: This can lead to further delays in expansion.
Philipp Godron from the think tank and lobby organization Agora Energiewende
Can the increased expansion targets actually be achieved?
Yes, the goals set are ambitious. But the potential for offshore expansion is far from exhausted. There are further rounds of tenders that can contribute to achieving the target by 2030. The goal of achieving 80 percent renewable energy by then is ambitious, but fundamentally achievable if everyone involved pulls together. There are challenges, particularly when it comes to increasing installed offshore capacity from 30 gigawatts to 70 gigawatts. A bottleneck: The German maritime area in which investments can be made is comparatively small. European cooperation is crucial here in order to plan and implement wind projects across countries and taking nature conservation and shipping into account. The cooperation should not only cover expansion areas, but also the network infrastructure.
What has to happen now for the apex to be overcome?
Since last spring, various packages of measures have been introduced with a focus on onshore wind power, aimed at overcoming obstacles and accelerating the expansion of wind power. The approval procedures were streamlined, the tender volumes were increased and more areas were designated. There is already some progress, for example onshore wind power is seeing an increase in permits compared to previous years and an increase of over 50 percent in projects participating in tenders. This suggests a positive development, but further acceleration is needed – especially as we start from a low base. The direction is right, but the speed does not yet correspond to the scale required to achieve the goal. For offshore, it is crucial that the responsible authorities quickly define the sea areas for further projects and ensure the timely implementation of the approved projects and the tendering of new projects.
Orsted had to cancel two billion-dollar projects in the USA. The costs could not be financed. Are the investments economically profitable?
In Germany, numerous corporations are taking part in the tendering rounds for offshore wind power. They are prepared to make significant payments to connect the wind farms to the German and ultimately European power grid. In principle, participation in the tenders indicates that investors see offshore projects as an attractive business model.
Nevertheless, Siemens Energy is negotiating with the federal government about aid. The energy industry in particular should be able to support itself.
The wind industry is a growth industry that must and can sustain itself in the face of private sector competition. It is certainly not an industry that needs to and should be supported permanently by government subsidies, be it from the European Union or the federal government. Competition is also helpful in ultimately achieving attractive production prices and thus low energy costs for all of us. At the same time: The energy supply must be resilient. That’s why it makes sense to secure additional manufacturing capacity for renewables in the current investment phase – this is also what the USA and China are doing. Wind power is a key technology that must remain in Europe.
Leon Berent spoke to Philipp Godron
This interview first appeared on capital.de