Friday, April 04, 2008

Growing pains for wind energy?

In a 1946 speech to a group of aspiring young engineers, Bucky Fuller offered the following definition of industry:
"Industry is a cooperative phenomenon in which three or more individuals working together, two as remote activity instrument or tool manipulating specialists coordinated to superhuman effectiveness by the third party, cold produce work that could not be produced by one individual or any number of individuals operating singly."
The European Union's wind energy industry is in danger of becoming a victim of its own success. Demand for wind turbines is out pacing manufacturers' ability to fill orders. This is due in part to a lack of raw materials like steel and copper, in part to bottlenecks in the supply chain, and in part to a lack of skilled workers. Add to this the fact that the EU's electric grids in dire need of upgrading to accept the introduction of vast new supplies of renewable energy and you can begin to understand the problem.

Of course, in the scheme of things, these problems are preferable to most as far as industry is concerned. They do, however raise concerns about any government's ability to deploy renewables in a timely fashion and at the scale necessary to mitigate climate change. (GW)

EU wind sector confident despite cash and skills

April 2, 2008

Europe's wind turbine makers are facing higher raw materials costs, a lack of trained workers and insufficient investments in electricity grids and new wind parks, with the record growth rates of previous years expected to level off. But the sector remains confident that EU renewable energy targets will be met.


The Commission on 23 January proposed new legislation on renewable energies, featuring binding percentage increases for each member state (see EurActiv 24/01/08 and our LinksDossier on renewable energy).

The proposals were largely welcomed by the renewables industry, though concerns remain that an excessive use of trading in renewable energy certificates may undermine existing financial support schemes at national level.

Strong winds

The wind energy sector has enjoyed impressive growth since 2000 and particularly since the middle of the decade. Europe's wind capacity grew by 19% in 2006 alone, with the global wind energy market swelling by 32%, or approximately 15,000 megawatts, according to EurObserv'ER, the European Renewable Energy Observatory.

In 2007, global growth figures for the sector were even higher than in 2006, but Europe's share of the global total declined, with the US taking the lead and developing nations in Asia and Indian sub-continent making considerable strides, according to EurObserv'ER. China in particular has set its sights on becoming a global leader in wind turbine manufacturing (EurActiv 15/11/07).


As a result, Europe's growth rates are expected to level off in the coming period. "I don't think we'll see sustained growth over the next few years", at least not at the high rates of previous years, said Christian Kjaer, chief executive of the European Wind Energy Association (EWEA).

Structural limitations may be part of the problem.

In Germany, for example, growth is being slowed by insufficient electricity grid infrastructure, hesitant investors, and rising raw material costs, notably for copper and steel, according to Ulf Gerder of the German Wind Energy Association (BWE).

The BWE is pushing Berlin to up the country's feed-in tariff to 9.6 cents per kilowatt hour of wind energy produced on land. The government's current proposed rate of eight cents is not sufficient to convince banks to put up the necessary funding for new wind parks or for expanding electricity grids, according to Gerder.

People power

A lack of trained technicians and engineers also weighs heavily on the minds of the industry. Finding enough skilled workers "is an enormous challenge in Europe," according to Kjaer, who cited examples of companies that are simply unable to fill dozens of vacancies for qualified engineers technical staff.

"Europe needs to educate far more technical staff and engineers to maintain its global leadership position in wind energy," he said.

Tackling targets

The Commission wants wind to provide 12% of the bloc's power by 2020, up from the current figure of 3.7%. To reach this sub-target, 9.5 gigawatts of new wind energy capacity needs to be installed annually over the next 12 years.

Given the challenges facing the sector and with growth expected to slow, there are concerns the industry will fall short of the target. In 2007, only 8.5 gigawatts were installed.

Nonetheless, the wind sector is optimistic. Increasing the output of wind energy by 1% annually compared to previous years will "not put a lot of strain on the European market," according to Kjaer.

But he also admits that rising global demand may influence the situation. While most turbines sold and installed around the world are still being built by European firms within Europe, the situation may be set to change.

A new US presidential administration may well push for a more favourable US renewables policy, and demand from China and India is unlikely to diminish. This is likely to inspire European firms to take their operations outside the EU where production is cheaper, more engineers are available, and consumers are closer, according to Kjaer. Many observers agree that such a scenario is particularly likely if a high euro exchange rate makes turbines produced in Europe more expensive.


EU Energy Commissioner Andris Piebalgs gave his vote of confidence to the industry during the 2008 European Wind Energy Conference (EWEC 2008external ), the industry's annual flagship event in Brussels.

"Wind has delivered the most promising results out of all renewable energy technologies so far, with 57 GW of total capacity installed in the EU by the end of 2007. In order to ensure that this trend continues, we need to have a secure and favourable EU legislative framework," he said.

Numerous delegates at the conference called for a favourable policy framework to boost investments and prevent industry flight and a slowdown within Europe.

Most renewables supporters agree that feed-in tariffs are the best way to give a boost to the sector. But a number of smaller member states with limited wind, solar or hydro potential prefer to trade virtual renewable energy certificates in order to reach their targets.

Some EWEC delegates, such as MEPs Britta Thompsen and Claude Turmes, also want the Commission to impose tough penalties on those member states that fail to reach their targets.

The Commission, however, considers the current regime sufficient, with member states facing legal challenges if they fail to comply.

Next steps:

  • By end 2008: French EU presidency hopes to reach a deal on the Commission's renewables proposals, along with a deal on the EU's broader climate and energy package.


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