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.”
From the ashes of Elon Musk’s decision to fire the whole Supercharger team last year, a new company has risen: Hubber, which will take its founders’ expertise at setting up Tesla Superchargers and apply that to addressing the lack of high-speed urban charging for taxis and other commercial vehicles.
Last year, Tesla CEO Elon Musk suddenly fired the entire charging department, in what is one of the more chaotic decisions he’s made yet.
In the immediate aftermath of this decision, a lot of questions were asked around the industry – and a lot of companies started snatching up talent from the best EV charging team in the world.
Or, alternately, some of that talent went to form their own companies. That’s the case for Harry Fox, Connor Selwood and Hugh Leckie, who met at Tesla and together oversaw the rollout of 100 Supercharger sites with 1,200 total chargers across the UK & Ireland. And after the shakeup of the Supercharger team, they set off to charge a new path of their own.
The three formed Hubber, which pitches itself as a new type of EV charging company, focused on solving “the urban charging gap.”
Hubber describes itself as “the UK’s leading specialist in urban high-powered EV charging, addressing one of the most urgent constraints in the energy transition: the shortage of fast, reliable charging in major cities.” It “acquires and develops prime urban sites into large-scale charging hubs, combining deep grid-connection know-how with a proven ability to deliver complex infrastructure at speed”.
A large amount of the traffic in UK cities is taken up by taxis and last-mile, and these vehicles tend to see higher utilization than commuter cars, so they need to charge more often. Hubber says that taxis charge five times as often as a private vehicle, which means they’ll need more access to fast EV charging.
This is further exacerbated in urban environments, where EVs might not park in a place they can charge. Lots of urban homes don’t have garages, and while there are street EV chargers available in London, they’re not everywhere yet. So convenient fast charging is essential.
And the needs for commercial drivers are different than those of other commuters. While nicely-appointed charging plazas (like Rove’s “full service” EV charger in Santa Ana, CA) are great for the average consumer, commercial EV drivers put more of a premium on speed and affordability, and don’t mind if a site is a little further off of a main thoroughfare, or not as close to food or shopping as other drivers might want.
So Hubber is looking at sites that other developers might pass over – like old warehouses or gas stations – and figuring out how to turn them into an ideal site for high-throughput charging.
With its cofounders’ experience at Tesla, Hubber will buy sites, transform them into a charger-ready location, and essentially provide the dream location that they would have liked to see during the site selection processes they went through in their previous jobs.
The charging hubs could still have some amenities, like restrooms and vending machines, of the type that would be useful for taxi or ride-hailing drivers to grab during a quick stop. But the main focus would be on getting people in and out and back on the road.
Here’s a rendering of what a potential site might look like. In this sample location, there would be room for light-duty vehicles up front, with an area for larger last-mile delivery vehicles with larger charging bays. A small covered area could provide restrooms and vending, and another portion of the site could be dedicated to transformers, batteries and the like.
Hubber is also thinking ahead to a possible autonomous future, where driverless ride-hailing vehicles like those from Waymo could have a place to charge. Although given that there aren’t currently great solutions for autonomous charging, an attendant might have to be involved for the foreseeable future.
The company would also like to expand beyond the UK and Ireland, but they’re sticking to home base for the time being. After all, things are just getting off the ground – but the £60 million (~$81m) investment that Hubber just secured is certainly a big boost towards getting the project moving.
Speaking of projects, Hubber’s first facility is opening this coming week, on August 20th. The site is at Forest Hill in South London, near Forest Hill Station. It will have 12 EV charging bays, with 3 150kW and 3 300kW dual-head chargers. The site will be operated by RAW charging, which will offer free fast charging for its first week of operation.
Electrek’s Take
As we said at the time, firing the whole Supercharger team was a dumb decision. It was immediately obvious to everyone in the industry that it was a dumb decision, and Tesla did eventually relent and rehire some of the fired workers, but the damage was done – and not just for the charging team, but morale was made low throughout the organization.
The silver lining, at least for the rest of the industry, is that it allowed this talent to be distributed around to other companies. This isn’t beneficial for Tesla and did cause chaos which has likely affected the rollout of NACS, slowed EV charging site development in the US, and so on, but it has been beneficial for other companies who managed to snatch up talent.
Or, for companies like Hubber, which were formed by that talent.
It’s an interesting idea, and I like the angle of focusing on taxis in order to increase utilization of the site. EV charging is potentially an interesting business long term, but currently a lot of chargers see low usage because it’s so easy for most of the people who own EVs to charge at home.
But we’re going to have to move beyond the market of people who can easily charge in a garage attached to a single family home, especially in cities. Getting an easy way for the cars that get used the most in a city to charge is a really important move, and we’re looking forward to seeing how Hubber can help with this. And having a leadership team consisting of people who formerly worked at the best charging team in the industry isn’t a bad start.
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Indian ag and automaker Mahindra has launched a limited-run Batman Edition of its BE 6 Electric Origin SUV, calling it, “a production car that brings to life a rare fusion of cinematic heritage and modern luxury, inspired by Christopher Nolan’s critically acclaimed The Dark Knight Trilogy from Warner Bros. Pictures.”
And, you guys – the new Mahindra BE 6 is. So. Serious.
Someone at Mahindra is very taken with American culture it seems. After launching the Willys MB Jeep-inspired Mahindra Roxor a few years ago, the company followed it up by building a credible line of EVs co-developed with VW. Now, they’re building a limited edition of one of those EVs inspired by another American cultural icon.
“Batman is more than a pop-culture icon — he represents innovation, resilience, and an unyielding drive to push boundaries,” says Vikram Sharma, Senior Vice President, Warner Bros. Discovery Global Consumer Products, APAC. “This collaboration brings that spirit to the road in a bold, electric way. With this limited-edition range, fans in India can now experience the thrill of Batman every time they drive. It’s a collector’s statement on wheels.”
To separate the Batman Edition from the other Mahindra SUVs, its makers have festooned their EV with Dark Knight logos and branding, inside and out.
Batman Edition features
Exterior
- Custom Satin Black Colour premieres on the Batman Edition
- Custom Batman Decal on front doors
- R20 alloy wheels for an aggressive, athletic stance
- Alchemy Gold-painted suspension and brake callipers a bold, premium contrast to the Satin black body
- “BE 6 × The Dark Knight”, limited edition, rear badging
- The Bat emblem, as seen in The Dark Knight Trilogy, uniquely placed on:
- Hub caps
- Front quarter panels
- Rear bumper
- Windows & Rear Windshield
- Infinity Roof featuring The Dark Knight Trilogy Bat emblem
- Night Trail – Carpet lamps with The Dark Knight Trilogy Bat emblem logo projection
- ‘Batman Edition’ signature sticker on rear door cladding
Interior
- Brushed Alchemy Gold Batman Edition plaque on the dashboard with numbering
- Charcoal leather instrument panel (IP) with brushed gold halo around driver cockpit
- Suede and leather upholstery with gold sepia accent stitching and integrated The Dark Knight Trilogy Bat emblem for a rich, tactile experience
- Gold-accented steering wheel, In-Touch Controller, Electronic Parking Brake, custom key fob with Alchemy gold detailing
- The Dark Knight Trilogy Bat emblem embossed on:
- The “Boost” button
- Seats
- Interior labels
- Pinstripe graphic and The Dark Knight Trilogy Bat Emblem across the passenger dashboard panel
- Race car inspired open straps with Batman Edition Branding Batman Edition welcome animation on the infotainment display
- Custom Batman inspired exterior engine sounds
Despite all the Batman branding, the end result is almost tasteful. I could do without the custom Batman decal on the front quarter panels, but the rest of the mods are far less offensive. I even like the little “Bat Signal” puddle lights on the wing mirrors.
Mahindra Batman BE 6
As a car, the special edition Batman Mahindra is based on the top-shelf version of the BE 6, fitted with a 79 kWh battery good for 550 km (about 340 miles) of range according to its WLTP rating. That battery sends power to a rear-mounted 282 hp (210 kW / 286 PS) electric motor generating and 380 Nm (about 280 lb-ft) of torque that sends power to the rear wheels.
The BE6 also features a modern Level 2 ADAS tech and screens everywhere, including in the steering wheel hub – which seems like it might get particularly nasty in an airbag deployment (but no one asked me).
Pricing starts at ₹27.79 lakh (a little under $27,500, as I type this), and production will be limited to just 300 units. Order books are set to open 23AUG.
SOURCE | IMAGES: Mahindra.
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Electric bike and scooter safety is now part of the curriculum in some schools – and surprisingly, it’s happening in Florida.
Yes, Florida. The state that’s better known for keeping education out of schools, banning everything from books to the word “gay.” But now, a Central Florida nonprofit is stepping in to make sure students are at least learning how to ride responsibly.
The group Best Foot Forward for Pedestrian Safety has partnered with local police departments and Orange County Public Schools to bring e-bike and e-scooter safety programs directly into middle schools and high schools. The initiative is focused on addressing the growing number of crashes and injuries involving students riding electric two-wheelers.
The safety course covers basics like wearing helmets, obeying traffic laws, and making yourself visible to drivers — skills that are important for the many young riders who are increasingly taking to electric bikes as a form of independent transportation around their cities and neighborhoods. One of the main topics of the program is said to be speed management. The program addresses the importance of keeping speeds reasonable and the impacts of faster riding.
Like much of the US, Florida has seen a surge in e-bike and e-scooter popularity among kids and teens, especially in suburban and coastal areas. While many embrace them as a fun and fast way to get around, the sudden rise has also come with a worrying spike in injuries and deaths, prompting calls for improvements in both infrastructure and education.
With e-bike usage exploding across the US, more schools and communities are exploring steps to increase rider education. It’s a sign that America’s transportation habits are changing – and our education systems are beginning to catch up.
Electrek’s Take
I think programs like this are great because they teach kids things that they’d otherwise have to learn through trial and error. We don’t just hand cars to sixteen-year-olds and say, “figure it out.” So it follows that some form of organized rider education would be important as more youths take to e-bikes than ever before.
In cycling-intensive cities in Europe, all schools teach kids to ride bikes, often giving the kids some form of cute little cycling diploma to demonstrate that they’ve passed the course and can safely ride a bike.
But at the same time, this makes me wonder if we’re still missing the point. Responding to an increase in e-bike rider deaths with lessons about bicycle speed management is a bit like responding to mass shootings by lecturing innocent passersby about why they shouldn’t run into bullets.
Educating riders is always great and I’ll always support it. But in parallel, perhaps we should also be addressing the root cause of all of these tragics deaths. At the end of the day, most electric bike-related deaths aren’t a result of an e-bike rider doing too much fast riding; they’re a result of a car driver doing too much running over a cyclist.
via: Fox13
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