Germany is the fourth largest economy in the world and the trading power of Europe. It has some of the most ambitious climate goals in the world. Following a landmark 2021 court ruling, the country has committed to net zero emissions by 2045. Then, after September 2021 In the elections, the new Government led by the Social Democrats announced that the electric power sector would be 85% renewable until 2030 – a big replacement for a country that remains Europe’s largest coal burner.
However, in February 2022, Hamburg-based multinational Nordex, one of the world’s largest wind turbine brands, announced that it would close its only German blade factory in June, affecting some six hundred employees. The company will continue to manufacture shovels in a factory in Spain, however, the Rostock plant will now only manufacture nacelles, bushings and transmissions. “We want to optimize our global production and origin processes for successful production and the competitiveness of the Nordex Group,” said José Luis Blanco, CEO of Nordex Group.
Pioneering weather commitments and the closure of the turbine plant seem to contradict others. How did we get here?
Specifically, the Rostock plant only produced blades for wind turbines with a maximum diameter of 149 m, which limits its capacity in a market where the trend is towards large wind turbines.
However, it is possible that new investments will only increase its production capacity, and it is worth noting that the closure of Nordex is not unique. “With the resolution to close the plant, Nordex has followed an industry trend,” corporate spokesman Felix Losada told Energy Monitor. The production in Rostock is the last remaining production of blades in Germany.
“To compete globally, we want our global production and source design to be as effective as possible,” he added. “Nordex Group will adjust this to market developments and long-term policy frameworks. “
The implication is that Germany has presented optimal situations for wind turbine brands in recent years. Much of this is due to a failed policy. “Unfortunately, previous German governments saw the German energy shift (or ‘Energiewende’) as an opportunity it represents,” says Wolfram Axthelm, CEO of Bundesverband WindEnergie (BWE), the industrial deal for the German wind industry.
For a while, policies such as food price lists and EU-led national renewable energy targets have ensured a favourable outlook for wind and sun development, and deployment has skyrocketed.
“But as the years leading up to 2020 approached and suddenly there was more uncertainty about what was to come, we saw a hole in the deployment of renewables,” says Karsten Neuhoff, head of climate policy at the German Institute for Economic Research (DIW Berlin).
Another major obstacle for German wind energy has been the slow and confusing licensing procedure that new developments must go through. “Just to give you an example, you want to get another permit for a dual carriageway bridge that trucks with shovels pass through. “they move from the factory to the structure site,” says Dennis Rendschmidt, managing director of VDMA Power Systems, an organization that represents brands and suppliers of energy and heat production equipment in Germany.
BWE’s Axthelm calls the processes “too bureaucratic and costly. “It can take six years to get approval for the deployment of a single turbine. Other problems similar to the approval of new wind farms come with the limited area reserved for new developments, also due to considerations and interference in military zones.
With weaker political signals and wind advances hampered by licensing issues, there has been a drop in orders for new wind turbines, Rendschmidt says. “Maintaining production capacity is about having orders on your books,” he says. reinvest in a factory; however, to do that, you need to make the right policy decisions to make sure that the long-term deployment occurs. “
A spokesman for Siemens Gamesa, one of Germany’s leading wind turbine manufacturers, said wind capacity had not been added at the speed required by a European domestic industry. “As a result, there has been a relief in jobs in the industry rather than mandatory adoption. “, and also a loss of suppliers in the price chain,” he told Energy Monitor.
Another main threat to German brands is that when auctioning new sites for producers, value is the only measure they evaluate. in account,” says Rendschmidt. De the opposite, reasonable imports are likely to take precedence over local products.
If the landscape around wind power deployment is not quickly replaced, there may be a real threat to the domestic industry. “We’re at a critical point right now because we’ve already experienced a slowdown in the last two or three years. “Rendschmidt says, “If things improve now, it will take another year or two for there to be an impact on the order books. “
In recent months a new serious trade headwind has emerged in the form of the war in Ukraine. Stronger renewable energy targets help the industry in the long run, yet the world’s largest wind turbine manufacturer, Vestas, posted an operating loss in the first quarter of 2022, which it attributed to disrupted supply chains and breakneck inflation.
The concern for the industry is that, if the government does not offer more support, the same thing that happened with German solar production may wipe out the country’s wind industry.
Germany a solar power plant at the beginning of the XXI century. The country’s Renewable Energy Act, enacted in 2000, brought in power price lists that allowed it to deploy generously subsidized solar capacity faster than anywhere else in the world. German corporations gained global leadership in solar power generation: before China’s emergence as a solar energy exporting force, it outpaced costs and thwarted pioneering maneuvers. Manufacturers
The European Commission said that, against the backdrop of growing fears for overseas safety and elevated renewable energy targets REPowerEU, it will do “whatever it takes” to rebuild domestic solar manufacturing in Europe.
If Germany does not revolve around its renewable energy industry, there are fears that the planned phase-out of the coal-fired force in the country could jeopardize security of supply. “The slow expansion of renewable power and infrastructure in recent years has posed dangers to the national economy,” says Frank Peter, deputy executive director of the Berlin-based think tank Agora Energiewende. green electric power is essential. “
However, it is all catastrophic. Germany’s renewable energy industry remains the most powerful in Europe, with more solar and wind energy production sites than any other country in the bloc. WindEurope’s knowledge shows that in 2020, Germany had 82 of the 217 wind energy production sites in the EU, while SolarPower Europe’s solar production map shows that the country has lately 53 of the 138 solar production sites.
The wind industry accounts for around 300,000 jobs in the EU and has a turnover of €60 billion. While Asia now produces around 92% of the world’s photovoltaic panels, there are early signs of a recovery in the solar industry. Europe’s Newest Market Reports Europe Has “an R Scene”
In Germany, the new coalition government, which includes both the Social Democrats and the Greens, has shown a transparent target to give the renewable energy industry the growth it wants. The government presented an “Easter package” and announced a “summer package”. to drive expansion. The first includes a new renewable energy law (“Erneuerbare-Energien-Gesetz”, or EEG), which explicitly states that the German Energiewende deserves to take precedence over other, potentially conflicting policies, and deserves assistance to triumph over many of the long-term licensing issues. The volume of tenders for new wind energy auctions would be higher and the mandatory loose area around aviation radar stations would be reduced by more than half, from 15 km to just 6 km.
The summer package is expected to come with legislation addressing the area’s expansion for renewable energy, Axthelm says, and is expected to verify the political promise to build the land for onshore wind up to 2% of the country’s total area. Axthelm also expects that repowering, i. e. extending the useful life of existing wind and solar farms, will be facilitated.
Nordex’s Felix Losada says the company “welcomes” those new political goals, which have accelerated in recent months through the war in Ukraine and the resulting independence campaign.
DIW Berlin’s Neuhoff adds that designating more land for renewable energy gives brands much more certainty about their commercial customers and inspires them to build capacity. “I think [we’re coming out] of the tunnel we were in,” he said. says. ” Planning regimes are improving and there are many more sites available for projects. “
The industry seems to be reacting enthusiastically to the new investment landscape. The last onshore wind energy auction in Germany had a consecutive moment of oversubscription, after several years in which the opposite happened due to the duration of the permits.
“Germany has turned the corner from onshore wind,” says Giles Dickson, CEO of WindEurope. “he wants a new generation of large wind power and has a transparent plan to simplify permitting. “
There are still fears that what was announced will not be enough for a transition of power at the required pace.
“The new federal government is doing a smart job in terms of ambitions and goals,” says VDMA’s Rendschmidt. “The question now is whether they will respect them. ” It remains to be seen whether regional governments fully adopt the federal government’s recommendations. Even at the federal level, there are still serious considerations about whether the authorization will be accelerated enough, with significant blockades pending on bird species and army radars, BWE says. Axthelm.
“The legislative action that is being carried out lately supports faster construction,” the Siemens Gamesa spokesperson told Energy Monitor. raw curtain costs are rising and supply chain disruptions are causing delays. “
With the new legislative program to be implemented this year, for Peter d’Agora Energiewende, the big challenge is the speed of change. neutral production until 2045,” he said.
Yet even if some of the maximum granular political tools remain ineffective, the political will to replace, driven by Green Coalition partners and security considerations about Ukraine, is there, and it counts for something.
“There is now much more focus on green policy and resilient supply chains in Germany and Europe than there was five years ago,” says Neuhoff of DIW Berlin. green jobs and investments in Europe, and this makes me think that policymakers will try to do whatever it takes to achieve a net 0 based on national chains of origin whenever possible. “