Europe’s wind and solar industries are on the ropes, thanks to the sudden embrace of ever-reliable nuclear power across the Continent.
Producing machines that can never produce power on demand was always going to end in tears. But moves to amp up construction of nuclear power plants – initiated by the French and followed by the Nordics, Italy and others – appear to be the final straw.
Siemens suffered a €5.8 billion ($6.3 billion) market value write-down in a single day in June last year, followed by another 40% write-down in October – slashing a further €3 billion ($3.16 billion) off its market value, following revelations by Siemens that it was demanding billions in government-backed guarantees from the German government.
12 months on, and Siemens is still on the ropes, recently sacking 4,100 workers in one fell swoop.
In the first piece, Andrew Montford pieces notices some wishful thinking from the UK’s offshore wind industry, while in the second, Pierre Gosselin brings us firmly back to earth.
Labour’s wind expansion will be ‘astonishingly wasteful’
Net Zero Watch
Press Release
9 July 2024
Net Zero Watch says that Labour’s plans for a vast expansion of the wind fleet will be highly wasteful. This is because, at times when the wind is blowing strongly, too much power will be produced, and windfarms will be forced to switch off. They will therefore need to earn their income at other times, and will have to increase their prices to cover their costs.
The UK wholesale market is seeing a rapidly rising number of periods of overproduction, and this is thought to be the main reason that offshore windfarms demanded, and received, a 60% price increase in the renewables auctions.
Net Zero Watch director Andrew Montford said:
We have no economic means to store surplus electricity on the necessary scale, so Labour’s plans will simply drive up costs. Millions of megawatt hours of potential production are going to be thrown away. It’s astonishingly wasteful and will add billions of pounds to consumer bills.
- Net Zero Watch has estimated that a fourfold expansion of wind power would lead to overproduction of around 30 terawatt hours of electricity each year.
- Windfarms’ annual costs are almost all incurred regardless of their output, so a reduction in output means a higher price must be charged on each unit. The overproduction that Labour’s expansion of wind power would cause would mean that windfarms would have to switch off much more often. The unit cost of wind power would therefore rise, from around £100 to around £150 per megawatt hour.
Europe’s Green Energy Plans Stall As Leading Companies Reduce Expansion Plans
No Tricks Zone
Pierre Gosselin
3 July 2024
- Green energies in turmoil…projects being postponed, scaled back…
- Europe’s largest green energy producer drastically reduces expansion plans for wind and solar energy
Europe’s leading green energy producer, Statkraft, is drastically scaling back its plans for new wind and solar power plants – due to falling returns and rising costs, so reports Germany’s online Blackout News, a leading site for independent German energy news.
According to company CEO, Birgitte Vartdal, market conditions have become more difficult as the company’s ambitious targets for wind energy and solar power are now being called into question.
The new Statkraft target is two to two and a half GW instead of an originally planned 4 gigawatts annually.
“In the offshore wind energy sector, the Group is now planning a total output of six to eight GW. The original target was ten GW,” Blackout News adds.
The scaleback follows other Europeans countries’ plans to reduce expansion, including Danish energy company Orsted, which “has lowered its targets by more than ten GW” and has also “canceled two offshore wind projects in the USA and reported impairments amounting to 28.4 billion Danish kroner (approx. 3.8 billion euros).”
Portugal’s largest energy supplier, Energias de Portugal (EDP), has also reduced its investment plans – due to the “deterioration in market conditions.” Moreover, French energy supplier Engie earlier had postponed developing hydrogen projects.
Leading officials blame projects having become “much more challenging” and offering “no relative returns.”
As a result, solar and wind equipment manufacturers have seen their values plummeting and ESG equity funds have “recently suffered outflows of 38 billion dollars,” reports Blackout News.
Blackout News is operated by an independent and non-partisan small group of engineers with experience in energy management.
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