Global Wind Turbine Giants Vestas and Siemens Gamesa Become Victims of Their Own Success

The Obvious Solution To Rising Costs Is To Charge More From Customers, But This Will Impact And Increase The Cost Of Electricity.

The global giants manufacturing wind turbines, Vestas Wind Systems and Siemens Gamesa Renewable Energy, seem to be better at making wind turbines than making money, despite the high demand for their products. The reduction in operational margins means that both companies, which have € 80 billion in orders, have no choice but to charge more from customers. This marks the end of the long-term trend of falling wind energy prices.

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Vestas And Siemens Gamesa Are Part Of The Handful Of Companies That Dominate The Global Wind Turbine Market

The Danish company and its Spanish-German rival are part of the handful of companies that dominate the global wind turbine market. The others are American General Electric and the Chinese duo Envision Energy and Xinjiang Goldwind Science & Technology. It’s a nice place to be, given the vital role of wind in reducing dependence on fossil fuels.

To limit global warming to 1.5 degrees Celsius, the International Energy Agency estimates that annual new wind capacity will need to rise from 114 gigawatts last year to 350 gigawatts by 2050, when renewables will provide nearly 90% of the world’s energy.

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The generous support from governments made the sector competitive in its early years. Technological advances and economies of scale – the latest wind turbines are nearly as tall as the Eiffel Tower – have rendered these subsidies obsolete. Lazard estimates that the total cost of wind energy has fallen by 72% over the past 12 years, to an average of US $ 38 per megawatt hour. This is about three-quarters the cost of gas energy in the United States.

Price Drops Impact Wind Turbine Manufacturers’ Revenue

The drastic drop in prices has been great news for the climate and taxpayers. It hasn’t been so good for turbine manufacturers, who are facing reduced subsidies while maturing technologies limit their capacity to deliver larger and better turbines for less money.

Vestas’ operational margin fell from 14% to 5% in the past five years, against a long-term target of 10%. When you add the rising cost of everything from steel or fiberglass resin to transportation, wind turbine manufacturers are about to sail against the wind. Siemens Gamesa, for example, is likely to generate operating losses this year.

The obvious solution is to charge more to customers. The sector has high barriers to entry for new players: manufacturing a 90-meter turbine blade is difficult. Therefore, the market weight of traditional operators should allow them to pass on the increased costs. But these price increases are trivial compared to electricity costs. The trend of increasingly cheaper wind energy may have been exhausted.

With The Price Of A Cell Phone, You Can Have Your Mini Wind Turbine For R$ 2,500 And Generate Energy At Home With Performance Comparable To Large Wind Farms

The average energy consumption in a Brazilian household is R$ 487.22 per month. A mini wind turbine project promises to reduce this bill to as low as R$ 163.06! The constant increases in electricity bills have kept families awake at night, unsure of what to do to save. On the other hand, accessible and low-cost technological solutions available online have allowed the installation of mini wind turbines in homes, resulting in good savings in projects that pay for themselves in a short time. See below how to acquire yours! Watch The Video Below And See How To Install Your Mini Wind Turbine.