Vestas warns wind industry is falling behind global climate goals
Europe’s largest turbine maker notes ‘big discrepancy’ between ambitious targets and reality on the ground
Europe’s largest wind turbine manufacturer has warned of a “big discrepancy” between the ambitious targets set for the industry and the reality on the ground, highlighting the steep growth required to meet global climate goals.
Anders Runevad, chair of Denmark’s Vestas, said streamlining the process of securing permits was just one of the changes needed to boost an industry that many countries are relying on to meet their net zero carbon emissions targets.
The EU, which along with the UK has pledged to be net zero by 2050, wants to increase the power generated from land and seabed-based turbines from the current level of 285 gigawatts to 425GW by the end of the decade.
The industry has grown rapidly, but developers complain about lengthy waits for turbine planning permissions or grid connections. Projects have also been held back by unfavourable terms at auctions for seabed and government electricity price contracts that fail to compensate producers for higher costs.
“There is a fairly big discrepancy between the ambitious political targets that have been set and then you translate that to what’s actually happening,” Runevad said in an interview. “We’re definitely behind that curve.”
He added: “I hope all these pledges and promises made are turned into real projects. For that to happen, the permitting process has to be improved, the auction process has to make sense for all parties, and we need to see continued investment in the grid.
“There’s a lot of hard work that remains in order to see the fantastic growth that’s forecasted or pledged.”
The comments from Runevad, a former Vestas chief executive, follow the warning from wind farm developer Ørsted this month that Europe’s offshore wind industry risked a “downward spiral” due to rising costs and uncertainty over future electricity prices.
Vestas, the leading manufacturer of wind turbines outside China, returned to profitability in 2023 after enduring heavy losses the previous year as margins were squeezed by rising costs. It made a pre-tax profit of €705mn in 2024 on revenues of €17.3bn.
Runevad said he expected “some impact” on the company’s US operations from the tariffs being imposed under President Donald Trump, as a proportion of its components are imported, although the “absolute majority is locally sourced”.
He said it was “hard to say” how the business uncertainty under Trump would play out, with the US president escalating a global trade war, noting that Vestas had coped with previous tariffs.
“There’s no point trying to optimise a situation that’s changing so quickly,” the Vestas chair said, adding that “more clarity” was needed on policy.
Trump’s tariff war focused on China comes a year into a European Commission investigation on whether unfair subsidies for Chinese wind turbine makers were helping them to undercut competitors such as Vestas and Siemens Energy.
Runevad said that while competition was generally good, “we have to compete on equal terms”.
Vestas shares have fallen to DKr88 from a high of more than DKr300 at the end of 2020, reflecting broader weakness in clean energy stocks.
“I share [investors’] frustration with the share price,” said Runevad, adding that the company would keep working on improving profitability and other long-term goals. “That’s what we should focus on, and then the market will decide the share price.”