We are heading to the WindEurope Annual Event 2024 and it is time for me to ask: what is the state of our industry?
Answering this question in one sentence, I would say that the industry is coming back. We are seeing more project activities in Europe and the supply chain is benefiting from an increasingly dynamic market.
Truly, during the last years Europe and its wind industry were on a challenging path. Just after the Covid-shocks, Russia attacked Ukraine. While Covid was a temporary event, impacting supply chains worldwide, the Russian war against Ukraine gave Europe a reality check on its dependency on imported gas. The latter increased Europe’s focus on renewables and on wind energy.
The EU reacted, and just last year the European Wind Charter and the EU Wind Power Package were called to life. The EU Wind Power Package aims to speed up wind energy permitting, improve access to finance and ensure a level playing field between European manufacturers and international competition. The European Wind Charter was signed by 26 EU Member States, committing themselves to swiftly implement the actions outlined in the Wind Power Package.
Europe needs more wind energy. Currently, the EU is building only half the wind energy capacity needed to reach its 42.5% renewable energy target for 2030.
The industry is ready to deliver. There is still time to ramp up installations. Already, permits are up 70% year on year in Germany and Spain. Investment decisions in Europe are being taken – in factories, ports, cables and vessels. And offshore wind is picking up speed with big farms scheduled to come online in the years 2027-2030.
The European wind sector employs more than 300,000 people, with this number expected to increase to more than 500,000 by 2030. Wind already contributes €43bn to Europe's GDP and brings value to local communities, rural areas, nature, climate, and electricity consumers.
Cheapest not always the winner
Talking about competitiveness, under the Green Industrial Plan the EU took an approach quite different from the tax breaks offered under the USA’s Inflation Reduction Act (IRA). The recently agreed Net-Zero Industry Act (NZIA) looks beyond only price in auctions and aims for resilience and the wider value wind energy brings to Europe.
So, the EU is moving away from the idea that the cheapest bid should always win. Instead, they now reward the value of technology that is cybersecure, sustainable and made with responsible business practices, things we are good at here in Europe. Of course, there is still stuff to do. The Member States opted that the NZIA criteria should only apply to 30% of the projects at first. We must avoid a segmentation of the Europe’s internal market. A uniform and common application of the criteria is important, avoiding burdening the industry.
Chinese strength
No talk about competitiveness without looking to China. China has built a very strong supply chain and is supporting its industry strongly. The EU has signalled that a level playing field needs to be ensured and that where there’s proof for unfair competition the European Union must consider using the full spectrum of its trade instruments. For now, the EU is monitoring the situation. But in the Wind Power Package the Commission stated that trade measures are a real possibility, and that the EU is ready to protect the internal market against distortions.
I do believe that focusing on achieving the renewable goals in Europe requires the installation of proven machines.
Moreover, after announcing record nameplate ratings for offshore wind turbines, Chinese OEMs have come forward with plans for onshore turbines larger than 10MW. I cannot tell you if, where and when these machines are going to be built. However, I do believe that focusing on achieving the renewable goals in Europe requires the installation of proven machines. Hence, it seems fair to assume that a more balanced development pace is reasonable.
And last but not least, looking at the European political calendar the elections for the European Parliament will take place in June. In my point of view, competitive and home-grown wind energy remains critical to Europe's competitiveness. This is something an incoming Parliament and later the incoming Commission need to keep striving for.
Europe has been proven to be a gatekeeper for freedom and openness. Our industry is an international industry, we employ a diverse workforce, adhere to responsible business conduct, bring economic value to society, and help protect the climate – all these values we will keep bringing to Europe.
- José Luis Blanco, CEO of Nordex, is writing in his role as chair of WindEurope. Follow all the news, opinion and analysis from WindEurope 2024 in Bilbao via Recharge's dedicated Live Centre.
