Siemens Gamesa asks for quotas on wind turbines manufactured in the EU
The head of one of Europe’s biggest wind turbine makers has called for a quota on the number of EU-produced wind turbines installed in the region, as the sector seeks to compete with cheaper Chinese imports and that the bloc is pushing for energy security.
Siemens Gamesa chief executive Jochen Eickholt told the Financial Times that if Europe takes its energy independence and the role of wind energy seriously, turbines should be seen as critical and strategically important infrastructure, with measures introduced to support the industry.
“If our product is essential to the infrastructure of our countries. . . so certainly, not for 100% of the installations but certainly for a certain part of the installations [in Europe]you have to have it in your hands,” Eickholt said.
“That means there has to be an element of how to make these things work and make these things,” he said, adding that even if certain geopolitical tensions or supply chain disruptions do occur, the Europe “might not have the cheapest answer, but would have an answer”.
European wind turbine makers are struggling financially, cutting jobs and closing factories, even as the EU, under the RePowerEU plan, aims to cut the share of renewables from 32% of total generation to 45% by 2030. WindEurope, the industry body, estimates that wind power capacity will reach 510 GW, up from 190 GW currently.
Siemens Gamesa, the third-largest maker of newly installed turbines last year, suffered a loss of 1.2 billion euros in the nine months to June, 233% more than the loss suffered in the same period a year earlier. It recently announced it was cutting 2,900 jobs, or 10% of its global workforce.
The rising cost of key materials such as steel and copper as well as supply chain disruptions all weighed on the European sector.
Manufacturers are also under increasing pressure from Chinese competitors, spurred by the rapid adoption of wind power in their home country and who often offer much lower prices. According to the Global Wind Energy Council, major Chinese manufacturers accounted for 53.5% of global new wind turbine installations last year, up from 36.6% in 2018.
Eickholt said there was “certainly a risk” that the wind turbine industry would come to resemble the solar panel industry, where Chinese manufacturers dominate the market and the supply chain, a situation on which the International Energy Agency warned in its July report.
“You have to see that we are encountering Chinese competition in global markets and also increasingly in Europe,” the managing director said, adding that Chinese manufacturers often receive “additional support, usually from national or regional sources,” and that their expenditure on innovation was in some cases 10 times higher than that of Europeans.
“At the end of the day, we think there’s an unbalanced battle, or at least we don’t have the same level of opportunity here,” Eickholt said. “We demand a level playing field.”