“One of the biggest challenges wind energy will have in the future is not coal or gas – increasingly we have to drive down our costs to match solar PV,” Krogsgaard said at the opening session of WindEurope Summit.
Speaking later to reporters, Krogsgaard added: “For the world it’s a fantastic thing to have renewables technologies competing like this. But when you look at the way the cost curve is coming down [for PV], it’s quite a scary pace from our perspective.”
Onshore wind remains cheaper than utility-scale solar in most markets, including Europe, but the gap between the two has been shrinking. And with the global PV panel market once again tipping into a state of oversupply, the cost of solar energy is expected to continue its rapid descent in the coming quarters.
To remain competitive in Europe, Nordex will “absolutely” need to be delivering turbines to projects at €50/MWh by 2020, down from €60 or so now, Krogsgaard says.
The emerging threat from PV has helped fuel recent M&A activity in the wind business, Francesco Venturini, chief executive of Enel Green Power, told the summit. “There’s been this big push because they know other technologies are coming up.”
Many of the biggest acquisitions seen recently in the wind industry were driven by European turbine suppliers looking for more exposure to power-hungry emerging markets. But such markets, from India to Latin America, are also the places where solar is proving most competitive.
Record-low solar bids have been reported in a number of emerging markets in recent weeks, from Chile to Abu Dhabi.Solar is “particularly a competitor in places where the solar resource is good – that is, in many of the emerging markets where we’re seeing a lot of growth” in wind energy, Krogsgaard notes.
“That’s of course a concern, and giving us reason to think.”
