Turbine leaders take choppy waters into account

August 27, 2022 | 08:00
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The world’s biggest wind turbine makers are garnering lower profits in the context of the global energy crisis in Europe and uncertain policies in many other regions.

Danish turbine maker Vestas reported that it generated Q2 revenues of around $3.3 billion – a decrease of 7 per cent compared to the same period last year. It reported an interim loss of $183.5 million before special items in the second quarter this year, compared to an operating profit of $95 million for the same period in 2021.

Turbine leaders take choppy waters into account

The negative results were blamed on geopolitical uncertainty and supply chain disruptions that have caused costs to increase and an energy crisis.

The second biggest group in terms of energy capacity, Siemens Gamesa Renewable Energy, earlier this month delivered another cut to its earnings forecasts for 2022 due to the turbine maker’s declining outlook. It also cited inflation of energy, raw material, and logistics costs as the main factors, along with the unavailability of key wind turbine components, port congestion, and supply delays.

All these factors impacted manufacturing, project execution, and delivery according to Siemens Gamesa. Chinese producers, who are often able to undercut prices, were also noted as fierce competitors. Additionally, the corporation is battling a slump in the global market for wind energy.

According to the Global Wind Energy Council (GWEC) in April, wind energy is not growing nearly fast or widely enough to realise a secure and resilient global energy transition. At current rates of installation, GWEC Market Intelligence forecasts that by 2030, it will have less than two-thirds of the wind energy capacity required for a 1.5°C and net-zero pathway, effectively condemning the world to miss its climate goals.

The growth of renewable energy is expected to slow down for the first time in 10 years, according to the International Energy Agency (IEA) in June. The amount of money invested in clean energy is expected to increase, but as inflation soars and the price of energy, labour, components, raw materials, and freight rises, this investment will not be as profitable as it once was.

Vietnam is placed among the top five markets in Asia in new installations this decade, behind China (52GW), Taiwan (10.5GW), South Korea (7.9GW), and Japan (7.4GW), according to GWEC. However, this high-potential market lacks clear frameworks and price incentives thus far for offshore wind developments.

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By Phuong Thu

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