From GE to Siemens, the wind energy industry hopes billions in losses are about to end
MOUNT STORM, WEST VIRGINIA – AUGUST 22: Turbines from the Mount Storm Wind Farm stand in the distance behind the Dominion Mount Storm power station August 22, 2022 in Mount Storm, West Virginia. The wind farm includes 132 2-megawatt Gamesa G80 wind turbines along 12 miles of the Allegheny Front. (Photo by Chip Somodevilla/Getty Images)
Chip Somodevilla | Getty Images News | Getty Images
It’s been a tough couple of years for the U.S. wind energy industry. Despite mounting pressure to combat climate change by transitioning to renewable sources, a confluence of factors disrupted supply chains and upended the economics of project financing. Rising inflation and interest rates, the war in Ukraine, and reduced tax incentives have plagued wind turbine manufacturers and developers of both land-based and offshore wind projects.
Nonetheless, today there’s an air of optimism within the industry, driven in large part by billions of dollars in new tax credits and subsidies toward clean energy investments included in the Biden administration’s Inflation Reduction Act. Although 2023 is expected to remain sluggish, GE Renewable Energy, Siemens Energy and Vestas Wind Systems, the leading makers of wind turbines — outside of China, which has built the world’s largest wind energy infrastructure — and their suppliers are banking on growth over the next decade, particularly in the nascent offshore wind niche.
“The wind energy market is stuck in this very strange paradox right now,” said Aaron Barr, an industry analyst at Wood Mackenzie. “We have the best long-term climate policy certainty ever, across all the largest markets, but we’re struggling through a period where the whole industry, particularly the supply chain, has been hit by issues that have culminated in destroying profit margins and running many of the top OEMs [original equipment manufacturers] and their component vendors into negative profitability territory.”
Barr pointed to turbines that were sold to project developers back in the 2020-21 timeframe, when OEMs’ capital expenditures and pricing had been steadily declining. Then, over the last two years, as it came time to deliver the turbines, “the costs of raw materials, specialized logistics and labor skyrocketed through the roof, which has left those OEMs holding the bag on profitability,” Barr said.
And it’s a hefty bag. Last November, Siemens Gamesa (since absorbed into Siemens Energy) reported a net loss of more than $943.48 million for its fiscal year that ended September 30. In a November interview with CNBC’s “Squawk Box Europe,” CEO Christian Bruch said there were “challenges in wind,” especially when it came to supply chains.
In January, three months after GE announced it was laying off 20% of its U.S. onshore wind workforce, GE Renewable Energy posted a loss of $2.24 billion for 2022, compared to a decline of $795 million the previous year. Even so, CEO Larry Culp expressed a sanguine tone when speaking with analysts. “While the demand drop due to the [production tax credit] lapse significantly impacted our renewables results in 2022, the Inflation Reduction Act is a real game-changer for us and the industry going forward,” he said.
In early February, Vestas reported a 369% drop in operating profit for 2022, which it attributed to geopolitical uncertainty, high inflation and supply chain constraints. The turbine manufacturer recorded a EBIT loss of more than $1.2 billion last year, compared to about a $456 million gain in 2021.
The wind market’s paradox was further revealed in recent quarterly numbers from the American Clean Power Association, which represents companies in the U.S. renewables industry. The fourth quarter of 2022 was the year’s best, as wind, solar and battery storage sectors installed 9.6 gigawatts (GW) of utility-scale clean energy capacity, enough to power two million homes. And yet, it was the lowest fourth quarter since 2019.
For all of 2022, the industry installed 25.1 GW of renewables capacity, according to the ACP, marking a $35-billion capital investment — but that marked a 16% decline from the record year in 2021 and a 12% decline from 2020. Focusing solely on wind energy, there was a similar good news-bad news conundrum. Land-based wind ended 2022 with its strongest quarter, commissioning 4 GW of new projects. Even so, the ACP said, the total of 8.5 GW installed for the full year reflected a 37% year-over-year drop, mostly due to the declining value of the production tax credit, which expired for new projects at the end of 2021.
The IRA, however, reestablishes the PTC and offers other attractive incentives to the wind industry, and in total, it is estimated that the IRA will drive investment of nearly $369 billion in clean energy and climate priorities, according to the ACP. In an update released Monday morning, the trade group says that’s already taking place, in the form of more than $150 billion in capital investment for utility-scale clean energy projects and manufacturing facilities in the past nine months, more than was invested in total between 2017 and 2021. Since August, the new report noted, 48 renewable energy facilities have been launched, expanded or reopened, including 10 wind manufacturing facilities.
Wind manufacturing in the U.S. coming back
There are nearly 72,000 utility-scale wind turbines installed in the U.S., almost every one of them land-based, generating about 140 GW of energy or about 9% of the nation’s electricity. Many of them are produced by an increasingly complex domestic wind energy supply chain, steadily built up since the early 1980s, centered around turbine towers, blades and nacelles (housing atop towers that contain drivetrains), plus the myriad components required to assemble each one.
The industry’s supply chain disruptions resulted in reduced demand for new land-based turbine orders, forcing manufacturers to ramp down their operations, said Patrick Gilman, program manager for the U.S. Department of Energy’s Wind Energy Technologies Office. Yet those doldrums appear to be subsiding.
“Now that the IRA has passed and we have long-term policy certainty for basically the next decade, OEMs are either reopening or spinning back up mothballed factories, announcing new facilities and otherwise expanding production,” Gilman said, referring to the nation’s fairly mature land-based supply chain. Indeed, in early February, Siemens announced plans to reopen two turbine component factories that it had mothballed last year, adding that the IRA had sparked a pick up in demand.
Comparatively, the U.S. offshore wind industry is just ramping up after years of delays in permitting, environmental approvals and power purchasing agreements with utilities that buy wind energy. To help catapult the sector, in March 2021, the Biden administration set a goal of deploying 30 GW of offshore wind energy by 2030.
To date, there are only seven operational offshore wind turbines in the U.S., five off the coast of Block Island in Rhode Island and two off Virginia Beach, a Dominion Energy project that ultimately will feature 176 turbines. By comparison, elsewhere worldwide there were 246 offshore wind farms in operation at the end of last year — 134 in Asia and 112 in Europe — translating to 54.9 GW of energy spun from thousands of turbines, according to World Forum Offshore Wind.
The Orsted Block Island Wind Farm in this aerial photograph taken above the water off Block Island, Rhode Island.
Eric Thayer | Bloomberg | Getty Images
There is currently one offshore wind farm under construction in the U.S., Vineyard Wind 1, 35 miles off the coast of Massachusetts. The project is jointly owned by Copenhagen Infrastructure Partners and Iberdrola, through a subsidiary of Avangrid Renewables, and GE will supply 62 Haliade-X turbines. With an estimated price tag of $3.5 billion, Vineyard Wind will begin generating power late this year, and when completed in 2024 will annually produce 800 MW of electricity. In the meantime, there are 17 other offshore wind projects on the East Coast in various stages of development.
GE’s turbines for Vineyard Wind, along with most of the project’s major components, are being exported from production facilities in Europe. Yet if that and other offshore wind farms are to meet the White House’s 2030 goal, it will require the rapid build-out of a U.S.-based manufacturing supply chain and at least $22.4 billion in investments between now and then, according to a report published in January by the National Renewable Energy Laboratory, the Business Network for Offshore Wind and other partners.
The supply chain would include building 34 new manufacturing facilities, including specialized ports and vessels. If individual states and companies leverage their existing manufacturing capabilities in sectors such as land-based wind energy, oil and gas, and shipbuilding, the report said, this effort would generate significant workforce and economic benefits throughout the country, not just in coastal locations.
In anticipation of the East Coast offshore projects gaining momentum, Vestas, Siemens and GE each recently announced plans to build new turbine component factories in New York and New Jersey, though contingent upon securing orders and receiving state and federal funding. And as the prospects of building wind farms in deep waters off Maine, New Hampshire, Gulf Coast states, California and Oregon — in which conventional fixed-bottom offshore turbines are not feasible — the federal government is coordinating with OEMs to develop floating offshore turbines.
Last fall, the Biden administration initiated the Floating Offshore Wind Shot, which seeks to reduce the cost of this emerging innovation by more than 70% and deploy 15 GW by 2035. “We see floating offshore wind as one of the clean energy technologies with the most upside potential for deployment in the coming decades,” said U.S. Secretary of Energy Jennifer M. Granholm at a related summit in February.
By and large, the U.S. wind energy industry is in good shape, if the short-term economic issues can be overcome. “It just has to get over this speed bump, most of which is driven by supply chain issues,” said Wood Mackenzie’s Barr. “If all the players involved can make it through the end of this year, we think the future is bright for the industry.”
The stakes are high. “To be crystal clear,” Bruch told CNBC back in November, “energy transition without wind energy does not work.”
Amprius Technologies just unveiled a new SiCore cell built on its Silicon Anode Platform that boosts battery performance for EVs, electric aviation, and drones.
In late 2024, battery manufacturer Amprius delivered pre-production 10Ah samples to six customers for testing, and full commercialization is set for early 2025. If real-world tests deliver as promised, this battery could enable its customers to achieve superior range, speed, and reliability.
Amprius’s new SiCore cell delivers an energy density of 370 Wh/kg and a power output of over 3000 W/kg. That means it packs a ton of energy while also delivering power in bursts – ideal for scenarios where endurance and speed are equally critical.
The Fremont, California-based company says what makes its new SiCore cell unique is its flexibility. It handles high discharge rates of up to 10C without active cooling and 15C with cooling, making it a solid choice for extreme conditions. Think drones flying longer missions or electric aircraft nailing energy-draining takeoffs and landings.
According to Amprius customer Teledyne FLIR, which specializes in unmanned aerial systems, this battery could be a game-changer for its drones. Tung Ng, vice president of unmanned Systems North America at Teledyne FLIR, said, “We are eager to evaluate how this breakthrough technology can meet the rigorous needs of our defense, security, and industrial customers, enabling longer runtimes and increasing operational flexibility.”
EVs, advanced air mobility, and eVTOL aircraft also stand to benefit from the SiCore cell’s balance of high energy and high power. Dr. Ionel Stefan, Amprius’ CTO, described it as a breakthrough in the tricky trade-off between power and energy density, calling it “a new power possibility for high-demand applications.”
Read more: Amprius ships EV battery that reaches 90% charge in 15 minutes
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If you are waiting on an EV from Chrysler, you’ll have to wait a little longer. The company is adjusting plans. Chrysler’s long-awaited electric crossover is officially on hold after an email leaked notifying suppliers of the changes. Here’s what to expect now.
Why is Chrysler’s electric crossover delayed again?
Despite announcing plans to have an all-electric lineup by 2028, Chrysler has yet to release a single EV. Now, it looks like it will be here even later than expected.
After an internal Stellantis email leaked last week, first reported by MoparInsiders, Chrysler confirmed it’s pausing its electric crossover. The email sent to suppliers said the program “has been put on hold until further notice.”
Chrysler’s electric crossover was initially scheduled to debut later this year, but the launch date has been pushed back.
At the 2023 Reuters Events Automotive USA Conference, Chrysler CEO Chris Feuell said the brand’s first EV will be a two-row crossover in 2025.
The electric crossover was expected to be an evolution of the Airflow concept from 2022. However, Stellantis’ head designer, Ralph Gilles, who oversees Chrysler, Dodge, Jeep, Ram, and Maserati, said the EV was “evolving in a new direction” in November 2023.
Inspired by the Airflow, Chrysler’s electric crossover was supposed to be powered by the STLA Large platform, which also underpins the new Jeep Wagoneer S and Dodge Charger Daytona EVs.
The Airflow was based on Chrysler’s RU platform, used for the Pacifica Hybrid, but the company said the EV platform would offer more capabilities.
Chrysler revealed its new vision with the radical Haylcyon concept show last year. Earlier this year, a brand spokesperson confirmed to Car and Driver that “Chrysler brand CEO Chris Feuell has said that we are working to develop a production version of the Chrysler Halcyon concept at some point in the future.” However, no launch date was confirmed.
Electrek’s Take
Chrysler’s electric crossover being put on hold is the latest in a series of setbacks for Stellantis EV ambitions in the US.
Stellantis sales fell another 15% in the US last year, marking its fourth straight YOY sales decline in the US. Chrysler (-7%), Jeep (-9%), Ram (-19%), Dodge (-29%), and Alfa Romeo (-19%) all sold fewer vehicles last year than in 2023.
The first Jeep and Dodge EVs, which were expected to hit US dealerships by the end of 2024, are finally arriving after encountering software issues.
Is Stellantis in trouble in the US? Over the summer, former CEO Carlos Tavares told reporters that unprofitable US brands could be shut down. “If they don’t make money, we’ll shut them down,” he said.
Despite this, Feuell told CNBC a year ago, “Chrysler brand is here to stay. It is being well invested in. The brand is not on the table for elimination, and it has a very bright future.”
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Toyota has been revealed as the largest auto industry funder of climate deniers in US Congress, according to a report released today by Public Citizen.
Toyota is the largest automaker in the world, having occasionally competed for that title with Volkswagen. It sells more gas-powered, polluting vehicles than any other company on Earth, and thus, it has a vested interest in continuing to sell those polluting vehicles.
But the problem is that gas-powered, polluting vehicles are not good for the health of humans or other living beings on this planet.
The pollution created by gas-powered vehicles damages every organ in the body, kills millions of people per year, and is a primary driver of climate change which is already causing an uptick in natural disasters (as we see currently, with climate change-driven fires destroying 12,000 structures in the last week in the US’ second-largest metro area) and threatens to displace over a billion people.
But that truth is inconvenient to Toyota, whose global revenue from selling polluting vehicles exceeds $300 billion/year. That means that, as one of the richest companies in the world and thus one of the most well-positioned to fund a transition to cleaner vehicles, it has a choice: it can either better itself, or it can do nothing to improve and instead pay people to lie about the problems that its vehicles are causing.
As you might expect, it has chosen the latter.
Toyota ranked as a top pollution advocate, once again
Toyota has repeatedly ranked as one of the strongest funders of pro-pollution, anti-EV, and climate denying propaganda in the world, and a new report out today reveals its growing interest in seeding anti-science attitudes in US Congress, through political donations to climate deniers.
Public Citizen’s report, “Driving Denial: How Toyota’s Unholy Alliance with Climate Deniers Threatens Climate Progress,” analyzes political donations from US auto industry PACs over the last three election cycles, and shows that not only is Toyota the largest funder of climate denial, but that Toyota’s funding of climate denial is increasing, while others are decreasing.
(Edit: Notably, the report only covered company-linked automaker PACs, specifically Toyota, Ford and GM, and donations to Congressional candiates. Tesla CEO Elon Musk did set up his own PAC, and his donations to anti-EV and climate denying candidates vastly outpaced all of the aforementioned PACs combined).
Public Citizen analyzed public records of political donations and past statements by US Congressmembers. It expanded its definition of “climate denier” from previous reports, this time including members who “used other rhetorical tactics like climate doomism (saying there is nothing that can be done), portraying climate activism as alarmism, and who downplayed the need to act to address climate change.”
It found 169 candidates – unsurprisingly, all republican – who had worked to deny scientific truths about climate change over the course of the last three election cycles. Out of those 169 candidates, Toyota donated some amount of money to 143 of them, totaling $810k.
In just the most recent cycle, it found that Toyota gave $271,000 combined to 62 candidates, nine times as much as Ford and more than twice as much as GM gave. Both Ford and GM’s climate denial donations reduced over the last three cycles, while Toyota’s dipped in 2022 and rose in 2024.
These are relatively small dollar numbers compared to Toyota’s >$300 billion in global annual revenue, and it’s money that has gotten results.
How this lobbying affects your lungs and pocketbook
In March of 2024, President Biden’s EPA finalized a new exhaust rule that will save thousands of lives and save Americans over $100 billion in fuel and health costs per year, and reduce climate pollution by 7 billion tons – but lobbying from the auto industry, including Toyota, got those rules softened before they were implemented.
The rest of the auto industry also asked for that softening of the rules, but there is now an opportunity for them to go further. Unfortunately for America, the next occupant of the White House is convicted felon Donald Trump, who finally received more votes than his opponent on his third attempt (despite committing treason in 2021, for which there is a clear legal remedy).
Mr. Trump has stated quite forcefully that he wants to reverse President Biden’s money-saving clean air policies, thus saddling Americans with dirtier air, higher costs and poorer health. This turnaround would also send American jobs to China and attempt to quash the new boom in American manufacturing driven by Biden’s EV rules.
In the past, the auto industry has taken advantage of changes in government, trying to get money-saving clean air rules torpedoed even after implementation.
This time, though, the auto industry is begging that the rules remain in place (after realizing they screwed everything up last time) in order to provide regulatory certainty to an industry with long planning timelines.
But Toyota has broken with the rest of the industry, instead asking the new Congress – that it bought – to give tax credits to its polluting gas-powered vehicles, which harm your health and exacerbate natural disasters.
Toyota’s “green image” is long overdue for a change
Toyota has long rested on the laurels of its previous success with hybrid vehicles, hoping that customers would be fooled into thinking that it is an environmentally responsible company because it sold some vehicles that make slightly less pollution than others for a while.
But conventional hybrid vehicles like the Prius (non-plug-in version) are still gas-powered, and still get 100% of their energy from gasoline. The vehicle’s hybrid drive only works to recover kinetic energy that’s already in the system and redeploy it, increasing efficiency, but still relying entirely on a resource that absolutely, without question, must stay in the ground.
And while Toyota has sold a significant amount of hybrids, the brand still ranks below average in efficiency, according to the EPA automotive trends report. It ranked below all other Asian brands, and below BMW, a brand famous for its large-engine and high-performing sportscars (though ahead of the US Big Three, which sell a lot of disgustingly huge vehicles and need to do better).
This is incongruous with Toyota’s perception among the public, which still consider the company as a green leader despite its long-time advocacy, as covered above, against EVs, against clean air regulations, and in favor of climate denial.
Toyota also portrays itself as a green leader through numerous greenwashing campaigns and anti-science disinformation. Public Citizen recently filed an FTC complaint over Toyota’s false electrification claims.
But is all of this effort to be hostile to life on Earth helping Toyota? Probably not – and it might even know it.
Toyota’s EV intransigence is harming it – and all of Japan
While Toyota’s advocacy could be interpreted as an attempt to protect its profits, this is a short-sighted view.
All industries change, and companies that do not change along with their industry are doomed to failure.
Toyota, itself, was the harbinger of this change in the 1970s, when the auto industry went through a big shakeup due to disruption in the oil and steel industries. Consumers needed smaller and more efficient vehicles that were not being provided by US automakers, and Toyota and other Japanese automakers – which also had superior manufacturing techniques and access to better and cheaper steel – swooped in to provide them.
Despite US attempts at protectionism (which didn’t work then and won’t work now), this catapulted Japan to becoming the world’s top auto exporter, and Toyota remains a global powerhouse.
However, now Toyota and Japan are on the opposite side of this lesson. Worldwide, consumers are demanding electric vehicles at increasing rates, and Toyota not only refuses to provide them, but tries to channel customers to its polluting vehicles instead.
The situation got so bad that the company’s longtime CEO, Akio Toyoda, stepped down in 2023 due to his failure on EVs, but the new CEO Koji Sato didn’t change much.
But someone else is providing the EVs consumers want – namely, China. As a result, China overtook Japan as the world’s largest auto exporter in the last year or so. And Toyota’s business is cratering in the world’s largest auto market because Chinese consumers just don’t want their crappy gas cars.
So the roles are reversed now – China is the new Japan, and Japan, led by Toyota (the largest company in the country, with high political and cultural influence) is responding in just the way that will ensure the same outcome as the last time this happened.
As EV sales grow globally, any company that does not keep pace will find its position diminished. Toyota has shown no interest in keeping pace, and instead is trying to lobby to stop a transition that will happen whether it likes it or not.
And it won’t just harm Toyota, but the entire country of Japan, for which automotive products make up around a fifth of its exports. Japan is reliant on the auto industry, and its intransigence could lead to a huge drop in GDP if it doesn’t shape up.
But instead of looking at all this blatant evidence that its intransigence will harm it, Toyota is doubling down on climate denial instead of trying to catch up with an industry that has clearly left it in the dust.
While Toyota’s short-term lobbying victories may feel good in the moment, they will help neither the company, the health of the humans who work for it who have to deal with the increased pollution its leadership lobbies for, nor the health of the planet it exists on which will be harmed by the science denial it lobbies for.
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