The Climate Spectator has an interview with the CEO of wind power company Vestas - Which way will wind power blow?.
By nearly any metric, 2011 has not been a particularly good one for Vestas, the world’s biggest wind turbine marker. Lower than expected demand for wind turbines, and fierce competition from rivals, particularly in Asia, has pushed the company to a third quarter loss and forced it to abandon its long-term financial goals – its so called Triple15 plan of €15 billion in revenue and an EBIT margin of 15 per cent by 2015. The outlook – clouded by the sovereign debt crisis in Europe, a slowdown in wind turbine development in China, and the likely removal of a crucial tax credit in the US – has helped push its shares down 55 per cent in the year and nearly 90 per cent from their 2008 peak.
Vestas CEO Ditlev Engel, however, says that the best days of wind are not over. In an interview with Climate Spectator, Engel says the Danish company can match the Chinese (and says it already sells more turbines in China than the Chinese sell outside of their country), and will play a critical role in future energy needs.
Engel says Australia has a magnificent wind resource which is as valuable as the resources that lie in the ground. But it is unlikely that Vestas will consider reopening the wind place and nacelle assembly plants it closed a few years ago.
He also says gives his views about technology development, and how the youth of today will have a different approach to energy than the current generation. ...
GP: You also face immense competition from Asia, particularly from Chinese wind companies. I guess to guarantee your long-term future you’ve also got to make certain of your short-term future as well. Are you confident you can match the Chinese?
DE: We have to remember that Vestas has 3000 colleagues in China and we went into China in 2006 and we built a number of plants there. That means that if the rules of the game going forward, for instance, are that everything should be used in China and shipped around the world, Vestas can definitely do that as well. Now, because of the magnitude of the products, but also, of course, the transportation costs, etc, etc, we don’t think that’s really going to happen. But actually, if you add up the numbers, if you look at 2010, Vestas sold more megawatts in China than all of the Chinese combined sold outside China.
GP: If you can’t beat them, join them, as it were.
DE: Well, China is of course the world’s largest wind market, but if you look just here in 2011, I think we have already seen that the Chinese market has not grown to the level that it had done in the previous year, so I would say it’s getting into a more a normal stride now going forward than the very steep road that we saw just over the last few years. ...
GP: Where do you think growth in the wind market is going to be? Is it going to be in onshore or is it going to be in offshore?
DE: In Australia, you guys have so much land, so since it is much cheaper to install them onshore instead of offshore, then I’m sure that onshore is going to be the name of the game in Australia. And you also have to remember that the onshore wind resources you have in Australia are phenomenal. I mean, again, a lot of people know that you have a lot of resources in mining and so on and so forth. Having fantastic wind resources onshore as you have in Australia is as good for the future economic security as having a lot of resources in the ground and you just have them up in the air as well, but people don’t think about it this way.
GP: Sure. Can you tell us about the size of the turbines of the future? Will they continue to just get bigger and bigger or will there be…?
DE: I don’t think so. From a transportation, cost efficiency point of view, I think we are at the peak now. The turbines we are sending for Macarthur are called the V112 which is I think sort of the largest we are going to see. And for practical reasons, shipping reasons, transportation, I think we are at the edge, now, onshore. I think we’re going to get bigger and we have for offshore; we have a launch that’s a seven megawatt turbine, but that is so large that it has to be manufactured at a port very close for installation, so if you’re going up in that scale, you need to have a significant offshore market just around the corner like, for instance, we have in the UK.
So, I think we are at the peak now, and because of the cost of materials, the lighter you can make the design, the smarter you can make the design and thereby reduce the consumption of materials, the more you can lower the cost of energy. So, in the old days it was about, you know, making them just bigger and bigger. I would say going forward it’s about keeping them at this size and then keeping making them lighter, because that will keep on checking out the total cost of the manufacturing.