Price pressures and increasingly extreme environments push wind turbine innovation

Competition is tough for Vestas, one of the leading suppliers of wind turbines. After years of public support, the industry is consolidating to better respond to the intense pressure put on turbine prices.

Part of that pressure comes from the developers of wind farm projects. To augment their chances of winning government licenses for new parks, developers often promise low prices on the electricity produced by wind farms. Developers then put the squeeze on turbine makers. Rising prices for raw materials further complicate turbine makers’ business.

At the same time, turbine makers invest heavily in research and development to improve the performance of their equipment and to enable developers to set up wind parks in increasingly extreme environments, offshore and onshore.

“The industry is facing extreme price pressure,” says Matteo Fusari, a senior engineer and principal advisor at the European Investment Bank (EIB), which is financing Vestas. “It is of utmost importance for European equipment makers to exploit synergies between product platforms, reduce product complexity and optimise global production, procurement processes and footprints to ensure their competitiveness.”

The Danish company Vestas leads the wind turbine market globally, with about 15% of the market. Close on its heels, however, are giants like China’s Xinjiang Goldwind Science & Technology with 13% and GE Renewable Energy with 12%. “Vestas is one of the champions,” says Delia Fornade, an EIB loan officer who worked on the project.

Offshore advances

The EIB has lent Vestas €475 million to support research, development and innovation activities for onshore and offshore wind power technologies and services carried out in the European Union from 2022 to 2025. The loan, which was signed in July and has already been disbursed, covers about half of the company’s budget of €952 million for research and development activities in that period.

The project focuses on several areas.

• The first is developing new rotor hubs and blades, designing equipment for cold climates or extreme weather conditions such as typhoons, and simplifying products to reduce the time it takes to get them to wind farms.
• The second is creating new designs for shared and modular platforms for onshore wind turbines, with the goal of making products more adaptable to different conditions.
• The third area focuses on new modular platforms for wind turbines offshore as well, which would allow the company to tap technological advancements and synergies of scale that already work for onshore wind turbines.

The Vestas loan comes a critical time in Europe’s energy transition. Europe’s desire to end its dependence on Russian oil and gas has reinvigorated support for renewable energy like solar and wind power, whose prices are increasingly competitive. “Support from European leaders for renewable energy will help companies like Vestas develop and to grow even more,” Fornade says.