GUEST PERSPECTIVE Europe needs more wind now. And we need it fast. By Jochen Eickholt, Chief Executive Of昀椀cer, Siemens Gamesa Renewable Energy After decades of small steps, the EU and other parts of the We need to cut through the red tape. world – most notably the US – now seem to be serious about transforming energy systems. This is especially clear in the Slow permitting processes have been a thorn in the case of wind energy, where over the past year policy-makers European wind industry’s side. In Europe, an overall capacity introduced several new ambitious targets. of 80 GW is currently trapped in various stages of permitting. This is a big number given today’s overall capacity of a little Recently, the EU proposed the Net-Zero Industry Act, over 204 GW. Had those 80 GW been installed by 2022, they which includes increasing wind-turbine manufacturing could have eased the energy crisis in Europe. To speed up capacity to 36 GW annually by 2030. To put that into the process, it is crucial that every permitting authority act perspective: In 2022, Europe installed wind turbines totalling quickly and unbureaucratically. 16 GW. That’s half of what we need – a huge gap to 昀椀ll within a short period. Further needs are to diversify the supply chain, ensure in昀氀ation compensation and reassess auction design. The onshore market in Germany, for example, shrank 16 signi昀椀cantly in 2018 – and the number of offshore Wind turbine manufacturers have not been spared from the wind projects barely increased. This has forced suppliers signi昀椀cant disruptions in global supply chains. to close businesses, thousands of people to lose their jobs, and many skilled professionals to move into different While the European wind industry needs to do its part by sectors, making it even more challenging to achieve the implementing diversi昀椀cation strategies, the EU must do EU’s ambition of reaching 440 GW of wind energy its part as well. The energy transition will need a secure, capacity by 2030. abundant and affordable supply of critical minerals. While the recently passed Critical Raw Materials Act, which aims We need massive investments and better to secure and diversify a domestic supply chain of raw access to funding. materials, is a step in the right direction, we are still waiting on details regarding implementation. Raw materials must Wind turbine manufacturers are able and ready to contribute be available for wind turbine manufacturers at fair prices. to the ambitious installation targets in Europe and around the Otherwise, there is no level playing 昀椀eld. world. However, appropriate policy frameworks are necessary. Furthermore, given the critical role played by the private sector Massive investments need to be mobilized in key in the EU’s energy transition, building sustainable business infrastructure such as roads, ports and grids to meet the models is key. Cost escalations between auctions and project growing demand for renewable energy and to expand construction expose developers and manufacturers to rising production capacities. Given the slow expansion in recent costs that can dramatically exceed projected revenues and years, the major challenge – especially for offshore wind – reduce margins. This is due in part to broader macroeconomic will be to sustainably increase manufacturing capacities. and geopolitical factors. Mechanisms to compensate for Existing policy frameworks have hindered wind turbine in昀氀ation-induced cost escalations are crucial to create a risk manufacturers in establishing a sustainable business pro昀椀le conducive to long-term investments at scale. model. Future frameworks need to facilitate the expansion of production capacities and the EU, and its member Finally, policy-makers need to introduce and emphasize states, must put more substantial and 昀氀exible public funding qualitative auction criteria, such as sustainability, mechanisms in place if we want to achieve government cybersecurity and “made in Europe” elements. As it expansion targets. stands, the predominant weighting of the price criterion also increases electricity prices for end consumers, which This summer, the EU is expected to propose a Sovereignty contradicts the goal of affordable energy. Fund. It remains to be seen whether it will provide an approach as pragmatic and clear as that of the US In昀氀ation The goal is clear, and so is the path – now we have to Reduction Act, which mobilizes investment with a preference show we really want it. for domestic green technologies. The EU Innovation Fund, however, which is limited to the funding of technological If we really want energy independence in Europe, we need to breakthroughs and will be in place until the Sovereignty Fund make sure we have a healthy and resilient wind industry. There is established, is not suitable in its current form to support is no question that the wind industry is of enormous strategic accelerated investment in manufacturing capacity. importance. But we need to act fast. We need more wind now. Fostering Effective Energy Transition: 2023 Edition 24