Decisive action is needed to support Europe’s wind industry.

Never before has the development of wind energy in Europe been so dynamic. Never before have so many projects been put out to tender. Despite this, European wind turbine manufacturers are facing a huge challenge. Cost pressures, high prices for steel, and ever-faster development cycles are creating a perfect storm for the wind industry. And this, despite the fact that the wind industry plays an essential role in reducing dependence on natural gas. It should therefore be regarded as a strategic industry for ensuring Europe’s energy resilience.

This is important, as Energy resilience is THE defining challenge of our time. Its absence has profound economic and geopolitical implications. Because the energy crisis is not over – energy costs remain high, putting Europe at a global competitive disadvantage and making it vulnerable to price volatility and economic constraints. Old dependencies are being replaced by new ones. As Europe moves away from fossil fuels, new dependencies on raw materials and clean tech supply chains must emerge.

This is particularly true for the wind industry. The wind sector, which promises an economy based on renewable energies, is particularly dependent on affordable raw materials and seamless supply chains. Only with a healthy wind industry can Europe achieve its climate targets. It is now a matter of taking decisive action. Five points are crucial:

1. Speed up permitting procedures for renewable projects: 80 GW of wind projects await approval. It is now in the hands of the member states to adopt, as soon as possible, streamlined permitting procedures for renewable energy projects and the necessary grid infrastructure across Europe. Accelerating the approval of the existing pipeline of projects will boost economic activity, strengthen supply chains, and provide a solid foundation for investment in new manufacturing facilities that are consistent with climate goals. And speedy procedures will ultimately help achieve the necessary 30 GW per year increase, rather than the originally planned 16 GW.

2. Recognize and actively support the value of European wind manufacturers: Wind technology combats climate change, creates wealth, and increases energy security. Much more attention must be given to these benefits in auctions, as proposed in the Net Zero Industry Act. By the end of 2023, mandatory non-price criteria should be the norm in every auction.

3. Remove additional burdens on the industry, avoid race-to-the-bottom competition: Inflation adjustment mechanisms and a clear end to negative bidding are urgently needed. The high level of inflation in prices of raw materials, logistics, and other costs have increased the price of wind turbines by up to 40 percent over the past two years. As a result, the auctions urgently need an inflation adjustment. Indexing the prices paid for wind energy – as some member states are doing – is a good approach, but it is not enough. We therefore call for a clear end of negative biddings in auctions.

4. Secure funding and financing for robust supply chains: This is essential for Europe's competitiveness and for the success of the energy transition. The European wind industry is not financially strong enough to build the capacity required to meet our climate targets. That is why we urgently need more flexibility in government support. This includes significantly higher co-financing rates for activities like expanding existing plants. In addition, neither industrial champions nor small or medium-sized enterprises have sufficient access to financial guarantees and programs e.g. by the European Investment Bank (EIB) will be required if we want to scale the number of projects up fast.

5. Ensure fair competition and trade agreements to lead the global climate agenda and secure strategic interests: It is important to defend fair competition on the basis of three pillars: First, enable the full use of European trade defense instruments to ensure a level playing field in the market and access to key sources. Second, enhance the European Bank for Reconstruction and Development toolbox by tying aid to EU industrial policy objectives. Third, enter into targeted bilateral trade partnerships to accelerate the uptake of clean technologies and strengthen the resilience of their supply chains.

Since Russia invaded Ukraine, there have been many declarations of new targets. Since then, the legal and regulatory framework has been improved to strengthen the wind industry. But this is not yet reflected in the balance sheets of European manufacturers. The framework needs to be developed further according to these five points, and this needs to be pushed by those EU and national politicians who truly understand the threat facing the European wind industry.

This week’s discussions with various policymakers, members of the Munich Security Conference Innovation Board, Breakthrough Energy and the Energy Resilience Leadership Group left me hopeful that while things might appear dark for the wind industry right now, dawn may be just around the corner.