For wind energy, challenges and opportunities are currently very close together. In an interview with German Wind Power Magazine, Giles Dickson, the CEO of the European wind energy association WindEurope, tells us about the current situation and what measures are now needed to anchor wind energy as a key technology in the energy transition.
Mr. Dickson, what is the economic outlook for wind energy companies in Europe?
"It is important to distinguish between the long-term outlook and the short-term outlook for the next 2-3 years.
One thing is certain, if we look a bit further ahead: wind energy will become the central pillar of the European energy system, which will largely be based on electrical power. Electricity currently accounts for just 25% of energy consumption in Europe. The remaining 75 % comes largely from fossil fuels. That will change very quickly. 75% of Europe's energy system will be based on electricity as early as 2050.
In this context, wind energy will become the most important source of electricity within the EU. 50% of the EU's electricity will be generated by wind turbines in 2050, compared with just 15% today. To achieve this, we will be increasing installed wind power capacity from less than 200 GW today to 1300 GW in 2050, which will create ideal prospects for companies and investors."
...and what is the current state of the industry?
"The short-term situation is much more complicated: the European wind energy sector is currently facing a number of overlapping challenges including the disruption of international trade chains in the wake of the Covid-19 pandemic, rising raw material and logistics costs, the war in Ukraine, and sanctions on Russian imports. All of this generates additional costs for our companies, which were already having to work with small margins before these external shocks.
As a result, none of the 5 European wind turbine manufacturers is currently making a profit, a situation that must change as quickly as possible if we want to complete the energy transition using German and European technology. This will require smart trade and industrial policies, more permits for new wind energy projects, and the targeted promotion of the European value chain."
What would you say is the biggest challenge – the dearth of skilled workers, fractured supply chains, or simply national (bureaucratic) regulations?
"A good question. The industry certainly has to tackle all three challenges. But unless permits are granted for new wind farms, there will be no need for raw materials and components, nor for additional personnel. The greatest challenge when it comes to achieving the EU's renewable energy targets is and remains the sluggish licensing situation. Approval procedures take too long and are too complex. There is an urgent need for the processing authorities to be digitised and to take on more staff to be able to process the expected wave of permit applications efficiently.
Compared to other European countries, some progress has already been made in Germany. Former Minister for Economic Affairs and Energy, Peter Altmaier, submitted a Permits Action Plan and his successor Robert Habeck has already cleared some hurdles through the so-called Easter package. The remaining obstacles must now be tackled in the follow-up summer package whereby the focus will not least be on the balance between wind energy expansion and nature and species conservation. The German government ought also to implement the EU Commission's very constructive proposals from the REPowerEU Action Plan as quickly as possible."
What can the industry do to counter these problems – or would you say it's up to the politicians to take action?
"For the most part, the industry can address the skills shortage and supply chain issues, for example through targeted campaigns in schools and universities, or by realigning international supply chains and enhancing the European supplier market. But governments also have a role to play: curricula will have to be adapted and young children should be inspired to take up technical professions from an early age. Universities must align their degree programmes even more closely with the real-world requirement for wind energy-specific qualifications.
In terms of approval procedures, the responsibility clearly lies with the politicians. In and of themselves, ambitious expansion targets are not enough as they cannot be achieved unless a sufficient number of new permits are granted."
Thank you for the interview, Giles Dickson!
This Article is part of issue 04-2022 of the German Wind Power Magazine, the international magazine of the German Wind Energy Association (BWE) about innovations of the German wind industry. You can read the full magazine here, online and for free.