Wind power industry in moment of reckoning as stocks fall and earnings crumble
A wind turbine installation taking place in Germany on July 14, 2023. The International Energy Agency is calling for a surge in renewable energy installations over the next few years.
Ina Fassbender | AFP | Getty Images
Renewable energy firms are mostly suffering a dire earnings season as struggling supply chains, manufacturing faults and rising production costs eat into profits.
With the world trying to transition at pace toward cleaner energy, equipment manufacturers are struggling to keep up with soaring global demand, leading to rising production costs and questions over the economic sustainability of large-scale projects from the industry’s major players.
Manufacturing faults, most notably at Siemens Energy‘s wind turbine subsidiary Siemens Gamesa, have emerged as companies race to build turbines at a greater pace and scale.
The problems at Gamesa led Siemens Energy to scrap its profit forecast earlier this year, and last month the company sought guarantees of up to 15 billion euros ($16 billion) from the German government.
Specialist wind energy firms are also often finding themselves outbid for seabed licenses by traditional oil and gas players. Should they win a contract, electricity prices are often too low to justify the manufacturing costs, leaving companies looking to their governments in Europe and the U.S. to deliver greater subsidies and restore balance to the market.
As a result, most wind energy stocks are down sharply since the turn of the year.
In a report published last week, Allianz Research noted that the eight largest renewable energy firms in the world reported a combined total $3 billion decrease in assets in the first half of the year, with wind projects in particular facing turbulent conditions. The firm’s economists said the past earnings season was a “learning moment” for the industry.
“The whole sector is grappling with rising construction and financing costs, quality-control problems and supply-chain issues. Inflation and global energy-price fluctuations have also led to increased costs for wind-power projects, casting doubt over the feasibility of many ventures,” Allianz Research economists said.
“Some projects in the U.S. but also in the U.K. are at risk of being abandoned if governments do not offer support. As these projects were initiated before the energy crisis, with guaranteed feed-in-tariffs that were low, they are now becoming more and more unprofitable.”
Although balance sheets remain solid, renewables companies have been writing down assets and cutting their earnings outlooks. Danish company Ørsted announced last week that it was scrapping the development of two offshore projects in the U.S., with related impairments totaling $5.6 billion.
However, compatriot Vestas offered a ray of hope. The company posted a third-quarter EBIT (earnings before interest and tax) before special items of 70 million euros ($74.73 million), well above the 31 million euros projected in a company-compiled consensus. However, it also warned that external factors clouded its near-term outlook, pulling back its full-year investment and margin guidance.
Its CEO Henrik Andersen told CNBC Wednesday that the sector was at an inflection point and that the market would eventually identify its “winners and losers” over time.
“We are very disciplined, we work with our customers and partners can rely on us, and governments can rely on us. That, I hope, creates the strong foundation for being one of the winners in the industry,” Andersen said.
“It’s not broken, but you can’t close your eyes and hope that any project you embark into discussions will always come through if the macroeconomic factors change.”
Political recalibration
Jacob Pedersen, senior analyst at Sydbank, agreed that Vestas in particular was well-positioned to move forward, but that both companies and policymakers needed to rethink their strategies if the transition to net zero was to be realistic.
“We know a huge part of the problem is related to the projects that were won back in 2019/20 and at low prices. Since then, inflation and interests have gone up, it’s become much more expensive to realize these projects, and that has left an order book of deficits, and that order book is now being smaller and smaller as time goes by,” Pedersen told CNBC’s “Street Signs Europe” on Wednesday.
Pedersen added that there is a “huge need for recalibration of the political vie” on the cost of the planned energy transition, given that wind turbines have increased in price by on average 20-30% since 2020.
“The transition to wind turbines, to a greener energy portfolio around the world is getting more expensive, and as such, I think also we have seen some indications — we know that the U.S. is a huge problem for the offshore industry at the moment because of the rise in interest rates,” Pedersen explained.
“But we have seen the newest projects being awarded on much, much better terms and terms that should be good for companies to generate a profit moving forward.”
The European Commission announced a new Wind Power Action Plan last month, aimed at significantly increasing wind installed capacity. Pedersen said this was evidence that the necessary recalibration is underway, but that it would not be achieved overnight.
“This is a process that takes time and in order for project developers to invest in new projects, in order for wind turbine producers to invest in the needed capacity to get us to where the politicians have their goals, much more is needed, and these companies simply haven’t got the cash to invest as much as is needed at the moment,” he said.
Germany’s largest offshore wind farm hit a big milestone: The first turbine at EnBW’s He Dreiht project has produced its first kilowatt-hour of electricity and sent it into the grid.
More turbines are expected to come online over the coming weeks. European energy provider EnBW has already installed 27 of the wind farm’s 64 turbines, all of which are scheduled to be commissioned by summer 2026.
Peter Heydecker, EnBW board member for Sustainable Generation Infrastructure, described the November 25 milestone as a “significant moment for EnBW.” With 960 megawatts (MW) of total capacity, He Dreiht is now Germany’s largest offshore wind farm.
Vestas supplied the 15 MW turbines, marking their world debut. Nils de Baar, president of Vestas Northern and Central Europe, said the giant turbine’s technology sets a new standard for offshore wind. “Its efficiency and performance enable a significant increase in energy yield per turbine.”
Just one rotation of the 15 MW turbine’s rotor can power the equivalent of four households for a day. The hub stands 142 meters (466 feet) tall, and the rotor’s 236-meter (774-foot) diameter sweeps a 43,742-square-meter (10.8-acre) area — roughly the size of six football fields. To put the scale into perspective, EnBW’s first offshore project, Baltic 1 in 2010, used 2.3 MW turbines.
EnBW wrapped up the wind farm’s internal cabling in August. Those lines connect all the turbines and feed into a converter platform operated by transmission system operator TenneT. That’s where the power is collected, converted from AC to DC, and sent to shore through two high-voltage DC cables.
Once complete, He Dreiht will generate enough electricity to power about 1.1 million households. The project is being built without state funding and sits roughly 85 kilometers (53 miles) northwest of Borkum and 110 kilometers (68 miles) west of Heligoland. EnBW’s offshore office in Hamburg is coordinating the build.
A partner group made up of Allianz Capital Partners, AIP, and Norges Bank Investment Management owns 49.9% of the project. Total investment comes in at around €2.4 billion.
Read more: China’s surge pushes global wind toward fastest growth ever
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Environment
BYD tried crushing its $180K luxury SUV with a 2-ton tree and it barely left a mark [Video]
![BYD tried crushing its $180K luxury SUV with a 2-ton tree and it barely left a mark [Video]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2025/07/BYD-ultra-luxury-EV-Europe.jpeg?resize=1200,628&quality=82&strip=all&ssl=1)
The Yangwang U8L is among the most expensive Chinese vehicles, starting at about $180,000. To prove it’s built for just about anything, BYD dropped a 2-ton tree on it, three times, and the ultra-luxury pretty much brushed it off.
BYD drops a tree on its ultra-luxury SUV during testing
BYD launched the Yangwang U8L in September, a long-wheelbase version of the U8 off-road SUV. The U8 was first introduced in September 2023 as the first vehicle from BYD’s ultra-luxury sub-brand, Yangwang.
Yangwang is a new energy vehicle (NEV) brand that sells high-end plug-in hybrids (PHEVs) and 100% battery electric (BEV) vehicles as BYD expands into new segments.
The U8L is Yangwang’s fourth vehicle, following the U8, U9, and U7. It’s available in China with a quad-motor extended-range electric vehicle (EREV) system, delivering a CLTC range of 200 km (124 miles) on battery power alone.
A 2.0-liter turbocharged gasoline engine serves as a generator, delivering a combined CLTC range of 1,160 km (720 miles).
Measuring 5,400 mm in length, 2,049 mm in width, and 1,921 mm in height, the Yangwang U8L is even bigger than the Rolls-Royce Cullinan and Range Rover Long Wheelbase.
BYD’s ultra-luxury SUV is priced from 1.28 million yuan ($180,000), making it one of the most expensive models from a Chinese brand.
It may look pretty, but the Yangwang U8L is built for far more than just good looks. Like the U8, the long-wheelbase version is equipped with advanced features such as emergency float mode, which allows it to float on water for up to 30 minutes, tank turns, crab walking, and more.
To prove its durability, BYD engineers put the luxury SUV through the paces, dropping a massive 2-ton tree on it, not once, but three times.
During the final drop, the company said the maximum impact energy reached 50.4 kJ, or about 37,200 lb-ft. After three consecutive drops, the Yangwang U8L barely even got a scratch. The body structure remained intact, the door still opened, the columns didn’t bend, and the vehicle could even drive like normal.
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The White House will formally announce its planned hike in US fuel costs by $23 billion tomorrow, according to Reuters.
Since the beginning of this year, the occupants of the White House have been on a mission to raise costs for Americans.
This mission has encompassed many different moves, most notably through unwise tariffs.
But another effort has focused on changing policy in a way that will raise fuel costs for Americans, adding to already-high energy prices.
The specific rollback tomorrow focuses on a rule passed under President Biden which would save Americans $23 billion in fuel costs by requiring higher fuel economy from auto manufacturers. By making cars use less fuel on average, Americans would not only save money on fuel, but reduce fuel demand which means that prices would go down overall.
The effort to roll back this rule was initially announced on the first day that Sean Duffy started squatting in the head office of the Department of Transportation. Duffy notably earned his transportation expertise by being a contestant on Road Rules: All Stars, a reality TV travel game show.
Then in June, Duffy formally reinterpreted the Corporate Average Fuel Economy (CAFE) standard, claiming falsely that his department does not have authority to regulate fuel economy.
Republicans in Congress even got into effort to raise your fuel costs, as part of their ~$4 trillion giveaway to wealthy elites included a measure to make CAFE rules irrelevant by setting penalties for violating them to $0. In addition, it eliminated a number of other energy efficiency and domestic advanced manufacturing incentives.
Duffy’s department then told automakers that they would not face any fines retroactively to 2022, which saved the automakers (mostly Stellantis) a few hundred million dollars and cost American consumers billions in fuel costs.
Tomorrow, Duffy is expected to make an announcement formally changing CAFE rules, lowering the required fuel economy for 2022-2031 model year vehicles, even despite all of the other changes in trying to make the rules unenforceable. The theory behind this would be to make it harder to later enforce the rules, and to allow automakers to get off with more pollution, and to increase fuel demand and fuel prices for longer until a real government returns to power and starts doing its job to regulate pollution.
We don’t know the specifics yet of what exactly the announcement will entail, but given the general trend of recent announcements, it will likely be a full rollback of the improvements to the rule made by President Biden.
Tomorrow’s announcement is expected to be attended by executives from the Big Three American automakers – GM, Ford, and Stellantis (formerly Chrysler).
Their presence on stage suggests that their prior commitments to energy efficiency and electrification were not serious, as they are now joining in an effort to increase your fuel costs, just to save themselves a few engineering dollars on having to provide something other than the disgusting, deadly land yachts that are a blight on the nation’s roads and are murdering pedestrians at a 50-year high.
Tomorrow’s announcement is just one many efforts currently being undertaken by executive departments to try to raise your fuel costs.
One of the largest is the EPA’s attempt to delete the “Endangerment Finding,” the government’s recognition of the scientific fact that climate change is dangerous to humans. The EPA is undertaking this effort so that it can then eliminate other rules intended to reduce pollution, with the goal of making you more beholden to fossil fuels.
Even the Energy Department’s own numbers, signed off on by oil shill Chris Wright, say that changes sought by the White House will increase gas prices by $.76/gal.
Like most other governmental changes, today’s change will likely go up for public comment, as required by the Administrative Procedures Act. We’ll let you know when they do.
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