How supply chain bottlenecks are ‘crippling’ wind power

Wind energy installations are expected to accelerate rapidly over the next few years, but a lack of supply chain investment and restrictive procurement practices could limit deployment.

A challenging economic environment, global supply chain disruption, and the energy crisis following the war in Ukraine contributed to 2022 installing the lowest levels of wind power for the last three years, according to a report by the Global Wind Energy Council.

If effort is not made to shore up wind energy supply chains for 2023, the report warned key 2030 climate targets, and therefore 2050 net zero targets, are in danger. Growing demand, a lack of investment and localised procurement practices are “limiting volumes to a crippling degree”.

The US and Europe are likely to see supply bottlenecks for turbines and components from 2025, as the US Inflation Reduction Act, increased ambition in Europe, continued expansion in China and large developing countries are speeding up their deployment. The report said spare capacity in the industry was limited in the face of growing demand, and likely to completely disappear by 2026.

China currently dominates global turbine manufacturing with 60% of the world’s capacity, the report said, meaning the majority of the world will have to rely on imported turbines. However, incentives to localise to Europe and the US – without accompanying buildout of capacity – will cause constraints and bottlenecks.

The report emphasised: “What we are witnessing now is a clear misalignment between government, industrial, trade and financial policies. It must be understood that without well functioning and competitive global wind supply chains, alongside equal access to raw materials and components, the energy transition will not materialise.

"There is a danger that the restrictive trade policies proposed by the EU and the US may risk delaying the global energy transition.”

The public sector should give manufacturers and the supply chain more flexibility to optimise their operations and incentivise scaling up, the report said. Policies to promote diversification of supply, increase industrial capacity and invest in the training and skills required are the only way to ensure climate targets are met, it added.

GWEC CEO Ben Backwell said: “Much more is needed, and fast. The wind industry will need to forge new partnerships with governments, cities, communities, investors and customers in order to enable the next era of growth. As a starting point, we need to leave the hesitancy of the past behind and adopt a new mindset in our industry.”

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