The head of Siemens Gamesa warned on Wednesday that a decade-long race to bring down the cost of generating wind power could not continue, as it would reduce the financial muscle of turbine producers to continue investing in new technologies.
A model of a wind turbine with the Siemens Gamesa logo is displayed outside the annual general shareholders meeting in Zamudio, Spain, June 20, 2017. REUTERS/Vincent West/File Photowarned on Wednesday that a decade-long race to bring down the cost of generating wind power could not continue, as it would reduce the financial muscle of turbine producers to continue investing in new technologies.
"What we've clearly achieved is that wind power is now cheaper than anything else. But I believe we shouldn't make it too cheap," Chief Executive Andreas Nauen told Reuters.In Europe, wind and solar currently are significantly cheaper than coal, natural gas and nuclear power, according to Bernstein research.
"We have probably driven it too far," Nauen said. The industry's ability to keep investing in new technologies and factories will be reduced if the drive to cut the cost wind power continues at the same rate, he added. Earlier this month Vestas slashed its 2021 outlook for a second time this year, and now expects an operating profit margin of 4% versus 5-7% previously - a far cry from its long-term target of a 10% margin.
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