EU wind turbine orders drop 47% in 2022, WindEurope says

WindEurope on Tuesday sounded an alarm over a 47% drop in European orders for new wind turbines last year compared to 2021, reflecting a fall in wind farm investments.

The industry group said that there were only 9 GW of new turbine orders in the EU in 2022, while in the first 11 months of the year final investment decisions were announced for only 12 GW of new wind farms, with no investments in offshore wind except for a few small floating wind projects.

This is well behind the estimated 30 GW of annual wind installations the EU needs to meet its new energy and climate targets.

WindEurope says the problem is inflation as costs are rising faster than expected revenues. The price of wind turbines have increased by up to 40% over the last two years. At the same time, the available price indexations for wind energy are not enough and there is also a lag in time between auction bids by developers and the procurement of turbine components by their suppliers.

In addition, investors are being put off by market interventions. The ability of governments to deviate from the EU’s emergency EUR 180 per MWh revenue cap on generators has created uncertainty, the trade group said.

“Last year’s market interventions have made Europe less attractive for renewables investors than the US, Australia and elsewhere,” said WindEurope chief executive Giles Dickson.

“The figures for wind turbine orders in 2022 should ring an alarm bell: Europe’s energy and climate targets are at risk if the EU fails to ensure an attractive investment environment for renewables,” added Dickson.

According to WindEurope, the Net-Zero Industry Act that the EU is preparing to support clean energy supply chains is key and "can’t come soon enough." Investment tax credits, what is offered in the US Inflation Reduction Act, will help, it says.

“The EU needs to set up the mechanisms and get the money moving asap. Clean energy industries are debating now where they should invest and need clear signals now if it’s going to be Europe,” Dickson further commented.

WindEurope also said the EU electricity market design should leverage contracts for difference (CfDs) and power purchase agreements (PPAs) but leave room for investors to access some market revenue. The European Commission will present its proposal for reforming the market design in March.

WindEurope's full Finance and Investment Trends 2022 report is to be released also in March.

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