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.”
Owner-operators are a huge part of the heavy truck market, and they’ve been among the most hesitant groups to transition from diesel to electric semi trucks. That may be changing, however, as Saldivar’s Trucking becomes first independent owner-operator in the US to deploy a Volvo VNR Electric Class 8 truck.
The higher up-front cost of electric semi trucks has been a huge obstacle for smaller fleets. That’s there are incentives from governments, utilities, and even non-profits to help overcome that initial obstacle. And the smart dealers are the ones who are putting in the hours to learn about those incentives, educate their customers, and ultimately sell more vehicles.
TEC Equipment is a smart dealer, and they worked closely with South Coast Air Quality Management District to secure the CARB funding and ensure Saldivar’s was able to ssecure $410,000 in funding from CARB’s On-Road Heavy-Duty Voucher Incentive Program (HVIP), which provides funding to replace older, heavy-duty trucks with zero-emission vehicles. The program is directed exclusively to small fleets with 10 vehicles or less that operate in California and aims to bridge the gap between the regulatory push for clean transportation and the financial realities faced by small business owners.
“TEC Equipment has been instrumental in supporting owner-operators like Saldivar’s Trucking through the transition to battery-electric vehicles,” explains Peter Voorhoeve, president of Volvo Trucks North America. “Their dedication to providing comprehensive support and securing necessary funding demonstrates how crucial dealer partners are in turning the vision of owning a battery-electric vehicle into a reality for fleets of all sizes.”
Saldivar’s Volvo VNR Electric features a six-battery configuration, with 565 kWh of storage capacity and a 250 kW charging capability. The zero-tailpipe emission truck can charge to 80% in 90 minutes to provide a range of up to 275 miles.
Those specs mean the Volvo electric semi is more than capable of meeting Saldivar’s operational needs, which include night shifts at California ports covering 175-200 miles per night, five nights a week. And, as he adds his VNR Electric miles to Volvo’s ever-growing tally, other owner-operators will see that it works for them, too.
“While large fleets often make headlines for their ambitious investments in battery-electric vehicles, nearly half of the 3.5 million professional truck drivers in the U.S. are owner-operators running their businesses with just one truck,” adds Voorhoeve. “These small operations face unique challenges, from the initial capital investment to securing adequate charging infrastructure … this collaboration is a perfect example of the important role to be played by truck dealers and why stakeholders need to work together to succeed in this new era of sustainable transportation.” We need solutions that work for different fleets of all sizes in the marketplace,” added Voorhoeve.”
Electrek’s Take
Electrifying America’s commercial trucking fleet can’t happen soon enough – for the health of the people who live and work near these vehicles, the health of the planet they drive on, and (thanks to their substantially lower operating costs) the health of the businesses that deploy them. TEC is doing a great job advancing the cause, and acting as true expert partners for their customers.
You love to see it.
SOURCE | IMAGES: Volvo Trucks, via ACT News.
FTC: We use income earning auto affiliate links. More.
Mercedes released a look at the powertrain technology of its upcoming electric CLA, and it includes tons of neat EV tech and some interesting options for battery technology and what looks to be the most flexible charging system we’ve seen yet.
We’ve already learned a fair amount about the CLA after first seeing the concept last year, and Mercedes released a few new specifics today regarding its powertrain.
In keeping with previous information we knew, the CLA is targeting extremely high efficiency of 12kWh/100km, which translates to just 193Wh/mi or 5.2mi/kWh. That’s more efficient than anything else on the road today – with Lucid’s Air Pure reaching 200Wh/mi, or 5mi/kWh. And just less than what Tesla is claiming the Cybercab will be capable of, at 5.5kWh/mi.
This is thanks to Mercedes’ new compact EDU 2.0 electric motor, which is part of its new Mercedes Modular Architecture (MMA) which will underpin its upcoming electric vehicles. The drive motor will be 200kW on the rear axle, though all-wheel drive models will be available with an additional 80kW unit on the front axle. A two-speed transmission will ensure efficiency at high speeds and low.
For more efficiency in cold weather, the CLA will use an air-to-air heat pump which is able to capture heat from the motor, battery, and ambient air to heat the cabin. While batteries and motors don’t make nearly as much waste heat as inefficient ICE engines, it’s still good to be able to channel heat to wherever you need it.
Mercedes says that the CLA will come equipped with a choice of two different batteries, each with different chemistries.
The larger 85kWh model will be capable of an unnecessarily-high 750km (466mi) of WLTP range – though WLTP numbers are always higher than EPA numbers, so expect something in the high-300s in EPA parlance. This battery will add silicon oxide to the anode for higher energy density, a technology that has been pioneered by Sila Nanotechnologies, a company which Mercedes is a lead investor in.
The smaller battery will be 58kWh, and will use lithium iron phosphate (LFP) chemistry. LFP is a cheaper but lower energy density technology, with higher long-term durability and simpler sourcing of minerals (it uses no cobalt, whereas Mercedes says cobalt has been “reduced” in the larger batteries). However, LFP generally has slower fast charging and cold weather performance.
On charging: the “premium” battery will have an 800V configuration capable of up to 320kW charging speeds. Mercedes says this can add 300km (186mi) of range in 10 minutes, and also says that the car will have a broad charging curve, which means you’ll get high charge rates even if the battery isn’t close to empty. It didn’t specify if the smaller LFP battery will have the same charge rate.
This high charging rate allowed Mercedes to set a record traveling 3,717km (2,309mi) in 24 hours at the Nardo test track in Italy in a pre-production CLA. That’s an average travel rate of 96mph – including time spent charging.
We also learned something about Mercedes’ NACS adoption plans. While just about everyone has committed to transitioning cars to NACS, it has taken longer than expected (largely due to Tesla’s chaotic CEO firing the whole supercharger team for little reason), and few cars have native NACS inlets yet. Some brands can already charge at Superchargers with adapters, but Mercedes is still on Tesla’s “coming soon” page.
As a result of delays in onbaording automakers, some seem to have pulled back on their plans, pushing NACS ports to later model years. But Mercedes has a new and unique solution – it will just put both CCS and NACS ports on the CLA, right on top of each other.
Mercedes says “in the future, new entry-level models will be capable of bidirectional charging,” but isn’t clear whether this model will be capable of that.
Electrek’s Take
While this is short of a full release of specs, we’re excited by what we see here. Mercedes seems to confirm that they’re meeting the efficiency goals they set out, and we like that they’re offering a variety of options and taking advantage of some newer EV tech like 800V charging infrastructure.
The inclusion of both NACS and CCS is very interesting, again offering options to owners during the transition. That seems to be the big message from Mercedes here – we’re not going to just pick one tool, we’re going to use all of them.
But pricing and availability are obviously big questions, as is design.
The concept looks fantastic, but concepts always change on their way into production. The shape of the camouflaged test vehicle is very different – but looks to have some shrouding on the front and back to hide its shape, so we’ll have to wait until we see this thing unveiled for more.
And as for pricing – Mercedes says the CLA will be an “entry-level” car, but who knows what that means anymore these days. The base ICE CLA starts at around $44k currently, so lets see if they can hit that number.
Charge your electric vehicle at home using rooftop solar panels. Find a reliable and competitively priced solar installer near you on EnergySage, for free. They have pre-vetted installers competing for your business, ensuring high-quality solutions and 20-30% savings. It’s free, with no sales calls until you choose an installer. Compare personalized solar quotes online and receive guidance from unbiased Energy Advisers. Get started here. – ad*
FTC: We use income earning auto affiliate links. More.
Daimler Truck North America has helped alcohol distributor Reyes Beverage Group deploy fully 29 zero-emission Freightliner eCascadia Class 8 electric semi trucks in its California delivery fleet.
Reyes Beverage Group (RGB) plans to deploy the first twenty Freightliner electric semi trucks at its Golden Brands – East Bay and Harbor Distributing – Huntington Beach warehouses, marking the first phase in the company’s transition to a fully zero emission truck fleet by 2039. An additional nine eCascadia Class 8 HDEVs are scheduled for delivery to RBG’s Gate City Beverage – San Bernardino warehouse before the end of 2024.
RBG’s decision to adopt the Freightliner eCascadia builds on its recent transition to renewable diesel and its ongoing idle-time reduction program. These electric vehicles (EVs) “go electric” will contribute significantly toward the company’s stated goal of reducing its carbon emissions 60 percent by 2030. These 2 trucks will save some 98,000 gallons of diesel fuel annually, and avoid putting nearly 700 metric tons of carbon dioxide and other harmful emissions into California’s air each year.
“We are excited to be among the first in our industry to adopt these electric vehicles,” explains Tom Reyes, President of RBG West. “This is a significant step toward our sustainability goals and ensuring compliance with state regulation as we transition our fleet to EV.”
Freightliner’s eCascadia electric semi trucks offer a number of battery and drive axle configurations with ranges between 155 and 230 miles, depending on the truck specification, to perfectly match customers’ needs without compromising on performance and load capacity. RBG’s Freightliner eCascadia tractors will rely on electric charging stations installed at each facility, allowing them to recharge to 80% capacity in as little as 90 minutes for RGB’s trucks, which feature a typical driving range of 220 miles as equipped.
Electrek’s Take
Food and beverage trucks operate everywhere – not just at the ports but in urban population centers, too. That means they’re pumping out harmful emissions right where a lot of people live and work, and that’s no bueno, making the electrification of these vehicles a no brainer for anyone who cares about the quality of life of the people who live and work near them.
SOURCE | IMAGES: Daimler Trucks.
FTC: We use income earning auto affiliate links. More.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports8 months agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Environment1 year agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway