The wind-turbine industry should be booming. Why isn’t it?
Given the political weather, Western makers of wind turbines should be flying high. America’s Inflation Reduction Act is stuffed with goodies for all sorts of renewable energy. In late April European leaders pledged to increase the North Sea’s offshore-wind capacity to 300 gigawatts by 2050, from about five gigawatts today and double a previous commitment. That looks like an awful lot of future business for turbine manufacturers. If only shorter-term forecasts were as clement.
The four biggest Western makers of wind turbines—GE Renewable Energy, Nordex, Siemens Gamesa and Vestas—supply about 90% of the market outside China. Together they made revenues of €42bn ($46bn) in 2022. But whereas wind-farm operators benefited handsomely from high electricity rates after Russia invaded Ukraine in February last year, the turbine-makers sank into the red and their suppliers barely made money (see chart).
The industry would also love to avoid the fate that befell Europe’s solar-panel industry, which lost an early lead to cheaper state-subsidised Chinese rivals. China’s turbine-makers are growing quickly—and profitably. The world’s biggest such firm is now Goldwind, which installed 12.5 gigawatts of capacity in 2022, for the first time edging ahead of Vestas, while generating an annual net profit of around $340m. Although the Chinese firms mostly cater to their home market, in which Western companies are not allowed to compete, they are also eyeing foreign customers, notably in countries along China’s Belt and Road Initiative of infrastructure projects.
2023-05-18 07:47:34
Article from www.economist.com