Evaluating the Need for a Truce in the Wind Turbine Size Race

Wind turbine manufacturers, engaged in a longstanding competition to produce increasingly larger machines, are facing challenges that may necessitate a pause in this size battle. Denmark’s Vestas recently announced plans to construct a factory in Poland dedicated to manufacturing offshore turbine blades taller than the Statue of Liberty, underscoring the intensity of the competition among turbine makers. However, constraints on cash flows and the imperative to enhance profit margins are prompting industry experts to consider the importance of a truce in the relentless pursuit of larger machines.

The race to build more powerful turbines has been driven, in part, by demands from wind farm developers seeking more efficient devices to reduce costs. Over the years, turbines have evolved from having a capacity of 0.5MW at the world’s first offshore wind farm to the 15MW capacity of the machines to which Vestas’ blades will be fitted. Onshore devices have experienced a similar evolution, albeit with more limited capacities.

Despite the race to build larger turbines, the sector is encountering reliability issues. Siemens Energy, for example, issued a profit warning last summer due to repairs needed on some of its onshore wind turbines, ultimately seeking a €15 billion rescue from the German government.

Wind engineers argue that the trend of increasing turbine size is yielding diminishing returns. The need for substantial investments in new factories, ships, extended testing, and design hours for larger components contributes to rising research and development costs, often amounting to hundreds of millions of euros.

Given the industry’s current challenges, including a recovery from elevated commodity prices and supply chain costs since the pandemic, the unaffordability of extensive investments becomes apparent. Vestas, for instance, reported a negative free cash flow of minus €874 million in 2022, with analysts predicting a recovery to €791 million in 2023.

Some European developers have expressed support for a potential capacity cap on turbines, although this approach risks hindering Europe’s innovation efforts. International competitors like GE and China’s Mingyang are already working on machines with capacities around 18MW. Siemens, with a 14MW capacity for its largest device, is planning a prototype for what it claims will be the world’s most powerful wind turbine in Denmark, with a decision on commercialization pending careful testing.

While the race to build larger turbines is ongoing, industry experts suggest that, for the sector’s long-term sustainability, a more measured and strategic approach may be necessary, particularly considering the current economic and operational challenges.

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