Germany aims to double its onshore wind capacity to 115GW by 2030 in order to reach an 80% renewables share in its power mix. That would require additions of some 10GW per year, up from a mere 1.9GW in 2021.
The government has decided to remove key barriers to permitting, and give renewables the status of ‘overriding public interest’, which should reduce possibilities for lawsuits against wind projects on (at times) bogus nature conservation grounds. Also, 2% of Germany’s overall landmass will have to be made available for wind farms.
All that is laudable, and urgently needed if the country – and Europe – wants to rein-in global heating and reduce its perilous dependency on Russian energy imports.
In that context it makes absolutely no sense for Berlin to allow Germany’s world-leading wind manufacturing base to die a slow death – but that is exactly what is happening.
Financially troubled Nordex on Thursday, as announced earlier this year, is closing its wind turbine blade factory in Rostock, northern Germany, with the likely loss of some 600 jobs as a consequence.
“Today is a black day for the entire German renewable energy sector,” said Karina Würtz, managing director of the Offshore Wind Foundation, which sees similar trends also for wind at sea.
“This is a worrying development in the supply chain for wind energy on land.
“The political mistakes of the past are still catching up with us here, with insolvencies and plant relocations abroad. The high price pressure fuels this additionally.”
A cut-throat competition for ever-cheaper turbine prices through tenders, coupled with a collapse in recent years of Germany’s once very strong domestic market for onshore wind, had squeezed profit margins for years. Supply chain bottlenecks in the wake of the Covid-19 pandemic made matters worse, and massive lockdowns in China, a key supplier of components, were beyond the control of European manufacturers.
Just as the market showed signs of a timid recovery, Russia invaded Ukraine, adding to supply chain insecurity.
What should Germany, or Europe, do? Würtz said: “We finally must create the necessary industrial policy incentives for European production.”
It will take time until Berlin and the EU’s new, more pro-renewables, legislation will show its effect.
The wind industry can’t wait that long, or more factories will close, as all manufacturers currently are loss-making.
The government has been coughing up billions to support polluting industries, such as aviation, during the pandemic to avert their demise, or currently to gas trading firms that are squeezed by Russia diminishing supplies. It is paying even larger amounts for future industries, such as green hydrogen, to ramp up.
So why doesn’t it pay what would be relatively small amounts in support to keep the wind industry afloat, urgently needed for the massive build-up in coming years to reach ambitious self-imposed targets?
Manufacturers are increasingly sourcing not only components in China, but also producing blades there, or in India – which doesn’t make sense if the world wants to avoid emissions from shipping heavy components around the world. Also, after the explosion of logistics costs, it is questionable whether that is good business.
The renewables sector in the case of solar manufacturing has seen how quickly an industry can die, and move almost completely to Asia. Efforts to lure solar manufacturing back to Europe (with high support from the EU or national governments, by the way) show how difficult and time-consuming it is to re-establish an industry that was almost lost.
Governments in Europe should do the utmost to avoid the same happening to the wind industry – so it is time for subsidies to this vital sector.
It would be money wisely spent, not for lost causes of rotten companies, but for technology leaders that in normal circumstances (cheaper energy prices, no supply chain bottlenecks, easier permitting, etc.) would flourish.