Turbine makers' gain means developer pain, wind industry warned
Western wind OEMs have rebuilt their battered finances but at a cost to customers and their projects, says the International Energy Agency
The push by Western wind turbine manufacturers to soothe their wounded finances is now turning into pain for developers and putting some projects at risk, warned the International Energy Agency (IEA) today.
Every major Western wind turbine manufacturer has spent the last two years battling to escape loss-making positions after being hit by soaring inflation following Covid and the war in Ukraine, and paying the price of the industry's earlier dash to drive down power costs at the expense of margins.
While OEMs have faced a “significant easing” of price pressures since 2023, the western giants are still “looking to shore up their finances by maintaining higher prices for new turbine orders, and 2024 margins have improved as a more lucrative project pipeline replaces cheaper legacy orders”, said the IEA.
That’s good news for the turbine makers, the report says, especially against a backdrop of orders that spiked by 140% in Europe to 7.8GW in the fourth quarter.
“Rising sellers’ prices, however, have consequently made some prospective projects uneconomical, especially when combined with waning government financial support,” according to the IEA.
While land-based wind held up better – the report noted a record German onshore auction in Q4 – the offshore market “shows signs of continued weakness as developers like Orsted have significantly pared back investment plans in response to increasing project costs”.
The upward pricing pressures applied by Western OEMs stand in stark contrast to their Chinese counterparts, noted the report.
Chinese wind turbines halved in price between 2022 and 2024 amid ferocious competition between manufacturers, and the IEA says the stark difference will fuel fears among Western players over increased competition from China.
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