Siemens Gamesa CEO: Many of us are suffering – volumes must increase now

OEMs and subsuppliers alike are hard hit by rapidly increasing costs of transport and raw materials.
The newly appointed CEO of turbine maker Siemens Gamesa, Jochen Eickholt. | Photo: Siemens Energy
The newly appointed CEO of turbine maker Siemens Gamesa, Jochen Eickholt. | Photo: Siemens Energy

Newly appointed chief executive officer of wind turbine manufacturer Siemens Gamesa Jochen Eickholt is taking a favorable view of the long-term growth opportunities in the wind turbine industry, but the situation is dire for many in the short run.

”We have demonstrated that we have the technology to deliver and do so on competitive terms. Our price is better or on par with fossil fuel sources. But there is a ’but’, and it’s quite a big one, because while long-term industry prospects are very strong, the short-term ones are another matter,” said Eickholt at the opening of Wind Europe’s annual wind energy conference held this year in Bilbao, Spain.

He added that if the industry is to deliver future growth as planned, it requires a healthy and robust industry.

”It requires financial strength to invest in infrastructure and technology. Is anyone able to look at today’s industry and call it healthy? Many of us are suffering, from wind turbine manufacturers to subsuppliers. It’s in everyone’s best interest to create a robust and industry in Europe,” Eickholt stated.

Turbine makers and a wealth of their subsuppliers are currently hit hard by rapidly increasing costs tied not least to transport and raw materials.

Production costs under severe pressure

At the same time, the cost of turbine production has been under severe pressure. Too low volumes – in terms of capacity in the sector – have created favorable conditions for low prices during auctions held in recent years across Europe and elsewhere.

The issue of volume is one of the several that needs rectifying, urges Eickholt.

”We need to increase market volumes now. The 2021 market for wind turbines in Europe was half of what it ought to be. To reach the 2030 target, EU needs to install 30GW new wind energy capacity per year. But last year we only built 11GW.”

”Due to the low volumes on the supply side, European auctions are characterized by fierce competition – also among developers. This is why bidding prices end up being so low. The low prices end up with wind turbine manufacturers and subsuppliers,” said the Siemens Gamesa CEO.

To increase volumes in the market, it is first and foremost necessary to speed up permitting processes – improving the opportunities to acquire permits for new projects. He also emphasized the need for increasing investments in the electricity grid.

”On top of that, governments must avoid negative bidding where developers foot the bill for new projects. That only leads to higher costs, which have to be paid eventually – typically by consumers or wind industry supply chains,” urged Eickholt.

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