Energy cost curbs are impeding Europe’s renewables rollout, Vestas warns
Wind turbine maker bemoans pricing uncertainty as it cuts full-year earnings guidance
Attempts by the EU to curb high energy prices are leading to a slowdown in the adoption of renewable energy just as the region tries to ramp it up, the chief executive of one of the world’s largest wind turbine manufacturers warned.
“Every indication is that the EU and governments have spent more time in finding taxation methods or trying to limit energy prices, which has actually slowed the process and project accruals,” Henrik Andersen, chief executive of Danish wind turbine manufacturer Vestas, told the Financial Times.
“Now there is an uncertainty of what you can expect to achieve on your electricity pricing. That is actually damaging the speed of renewables being brought on.
“It is not enough to talk about ambitions for increasing renewables,” he added. “The energy crisis is only solved by having real tangible actions, which means you need to speed up your permitting and get more prime energy sources in your grid and in your supply to the consumer.”
European energy ministers in September agreed to limit revenues from wind, solar and nuclear power generation to $180 per megawatt hour as part of their plans to curb the rise in energy prices across Europe, caused by high gas prices.
Andersen’s comments come as Vestas, which had the most installed wind turbines in 2021, trimmed its full-year earnings guidance in the face of supply chain woes and cost inflation.
Earnings in the three months to the end of September were down 29 per cent on a year earlier to €3.9bn and the company now expects full-year revenue of €14.5bn to €15.5bn, down from its previous outlook of as much as €16bn.
Inflation and the rising cost of materials such as steel and copper have made turbine-making more expensive, while the industry is facing supply chain delays related to the pandemic and the Ukraine conflict.
“The dilemma is the output from the wind turbines has never been higher. The value of [wind turbines] has never been higher,” Andersen said. “From an operational point of view it is a slightly toxic operating environment, because if the customer has delays or slowdown, then we have tense discussions, because you can have a very attractive return on getting the turbine commissioned earlier or on time.”