What’s going on in the world of wind power? Do you think this year’s outcomes will be better? With Germany and other major renewable energy locations facing low wind speeds in 2021, many are questioning if wind is the dependable kind of electricity that is so often emphasized.
Low wind levels and supply chain delays reduced Siemens Gamesa’s renewable energy business’s market worth roughly in half in the last year. Siemens reported a 20.3 percent year-over-year drop in sales between October and December 2021, to $2.06 billion. Nearly $353 million was lost in operating losses.
According to the firm, sales might fall anywhere from 9% to 2% year over year, given the outcomes of the first quarter of FY22 and the fact that supply circumstances aren’t expected to recover until the Siemens Gamesa has revised its forecast for FY22 for the rest of the year.
When it comes to wind energy, Siemens’ stock price has dropped by around 45 percent since last year due to the company’s own challenges with a sluggish supply chain and rising raw material prices. A complex market presents significant hurdles for Siemens Gamesa’s Onshore division, according to the board’s chairman Miguel Ángel López.
Vestas and Orsted, two of Europe’s largest wind power companies, both issued dire warnings about the future of the renewables industry in December. Low wind speeds, supply chain issues, and higher manufacturing costs have been voiced by Danish enterprises as a result of wind generating operations in Denmark.
Compared to 2020, Orsted observed a decrease in profits in 2021 because to reduced wind speeds. There haven’t been this low of wind speeds over Europe in years. Renewable energy producers had a difficult year because of the rising prices of raw materials and transportation. It is certain that green energy firms will confront these kinds of difficulties as they expand their operations in the future years, notwithstanding the optimism that resulted from the COP26 climate meeting last November.
Steel prices increased in 2021, with the benchmark price soaring by 86% in the US and 53% in Europe. Steel is a primary raw material. The cost of new wind farm projects has soared due to the fact that wind turbines are built mostly of steel. The share prices of many renewable energy firms have fallen as a result of a lack of clarity on the costs and dependability of wind speeds.
At 42.6 percent in the first six months of 2021, Germany recorded an 8.1% decline in the country’s renewable energy share. The combined output of onshore and offshore wind farms dropped by 28%. To show the world how it has recovered from this tumultuous year, Germany will have to prove how it will lead the EU in relying on renewable energy for decades to come, decarbonizing its national economy.
An increasing cost of feedstock and transportation is hurting General Electric’s (GE) onshore wind businesses in the United States as well. CEO Larry Culp said: “I don’t see the edge of a resolution yet,” according to the company. In addition, he predicted that “inflationary pressure would pick up a little in 2022.”
Rising expenses and supply chain challenges have GE looking for new suppliers and sourcing new components in order to keep costs down. After the epidemic, companies of all kinds were heavily damaged by the inflation that resulted. As a result, emerging industries like renewable energy, which are still in the early stages of development, are bearing the brunt of the economic downturn. In the wind power industry, GE is concerned about the possibility that US production tax incentives for onshore wind power may not be renewed.
Several forecasts, however, indicate that wind and solar power will reach record levels in 2022. Wind and solar power are expected to have a good year despite persistent supply chain challenges, according to numerous analysts, because of cheap pricing. Throughout the year, lower supply chain costs and delays are projected. “We’re also at a period when we have uncertainty on crucial tax policy,” Greg Wetstone, CEO of the American Council on Renewable Energy, said, adding, “It’s a reality that the renewables industry has had to deal with from the beginning.”
EIA’s projections for 21.5 GW of solar and 7.6 GW of wind in the U.S. for 2022, after the most successful wind, solar, and battery-storage-related development year in history, have been met with a mixed response.
In spite of COP26’s optimism about quick development, renewable energy companies are already encountering roadblocks. Low wind speeds and supply chain issues have cost Siemens, Orsted, and GE money. We can anticipate an increase in wind power in 2022 that will continue year after year as supply chain problems resolve and more onshore and offshore wind turbines come online.