Remember how the wind and solar industries would create hundreds of thousands of highly-paid groovy ‘green’ jobs? No? Well, as it turns out, the few (highly subsidised) jobs created are disappearing like the sun over the horizon. Although, for the axed workers, there will be no reappearance the following day. Easy come, easy go.
Siemens Gamesa is a case in point. Orders have dried up; costs of producing anything in Germany are prohibitive – it suffers Europe’s highest power prices, thanks to Germany’s efforts to run on nothing but sunshine and breezes (and exorbitantly priced gas). Germany’s largest wind turbine manufacturer has been struggling for years to turn a profit.
12 months on, and Siemens is still on the ropes, sacking 4,100 workers in one fell swoop, as this lament from Reuters explains.
Siemens Energy’s Gamesa to cut 4,100 jobs, CEO says in staff letter Reuters 29 May 2024
Siemens Energy’s wind turbine division Siemens Gamesa is planning to cut 4,100 jobs, or around 15% of its workforce, the unit’s Chief Executive Jochen Eickholt said in an internal letter to staff seen by Reuters on Tuesday.
“Our current situation demands adjustments that go beyond organizational changes. We have to adapt to lower business volumes, reduced activity in non-core markets, and a streamlined portfolio,” Eickholt said in the letter.
A spokesperson for Siemens Energy said the company would announce the number of jobs affected once consultations with all stakeholders are completed, declining to comment further.
The job cuts plan, which was first reported by Spanish newspaper El Correo, comes shortly after Siemens Energy fleshed out major restructuring moves at Siemens Gamesa, also flagging that this would include staff reductions.
Eickholt said the goal was to keep Siemens Gamesa’s total workforce stable, via shifting jobs to and hiring more employees in other part of the division, confirming comments made by Siemens Energy CEO Christian Bruch earlier this month.
“The leadership team and I are aware that today’s announcement is difficult, especially considering the challenges you’ve been facing over this past year,” Eickholt, who will step down at the end of July, said in the letter. Reuters
The wind industry’s sudden implosion saw Siemens suffer a €5.8 billion ($6.3 billion) market value write-down in a single day in June, followed by another 40% write-down in October – slashing a further €3 billion ($3.16 billion) off its market value, following revelations by Siemens that it was demanding billions in government-backed guarantees from the German government.
At the heart of their woes is a machine that wears out much faster than promised, is naturally costly to maintain and, in marine environments, suffering catastrophic and often fatal mechanical failures, which requires the turbine to be removed and dragged back to shore for a complete overhaul. Needless to say the cost of all that is astronomical.
Because the failures are occurring so suddenly, ordinarily it’s the manufacturer who suffers the cost of repairs under the (exceedingly ambitious) warranties given by the likes of Siemens, and others. If the manufacturer’s warranty doesn’t cover those costs, the operators then call on their insurers to foot the bill.
However, as detailed in this piece from wind industry propagandist, Gareth Chetwynd, insurers are seeking to limit their exposure by carving out claims based on manufacturer’s defects using “serial defect clauses”. Those clauses mean that offshore turbine operators will have to carry the can, in the highly likely event that the salt-encrusted machines grind to a sudden and early halt. Precisely as happened with a fleet of 6MW Siemens monsters floating off the Scottish coastline.
World’s first floating wind farm Hywind Scotland faces shutdown for ‘heavy maintenance’ Recharg News Gareth Chetwynd 12 January 2024
Norwegian energy giant Equinor will temporarily remove all five floating wind turbines from the Hywind Scotland array later this year after discovering a need for “heavy maintenance” on the Siemens Gamesa machines deployed there, Recharge has learned.
The 6MW turbines will be towed back to Wergeland on the west coast of Norway as part of a maintenance programme that is likely to take around four months. All units will be reconnected back on the Hywind Scotland site when the maintenance is complete, a spokesman for the Norwegian company confirmed.
The work will involve changing some components on the turbines, as well as more routine maintenance. “What we see from operational data is that there is a need for… heavy maintenance on the turbines,” he told Recharge.
Equinor declined to specify exactly which components would need replacing, but industry insiders consulted by Recharge suggested that the issues must be significant to require intervention on such a scale.
While acknowledging that towing all the turbines to shore for maintenance after seven years of operation was not planned at the outset, the Equinor spokesman claimed such actions are not entirely unexpected.
“We will conduct a combination of exchanging some components, maintaining others and using the opportunity to do regular service as well. All of this is something we regularly do at our other offshore wind farms. What’s different here is that we will tow the turbines to shore,” he said.
He added that the need for heavy maintenance became apparent through “ordinary monitoring and inspections, in close collaboration with the manufacturer.”
Siemens Gamesa was asked to provide clarification of the nature of the problems on Hywind Scotland’s turbines, but a spokesperson said the company would not expand on the information provided by Equinor.
The 30MW Hywind Scotland array was fêted as the world’s first commercial floating wind farm when it became operational in 2017, moving ahead of a number of demonstration projects.
Equinor and 25% project partner Masdar invested the equivalent of $194m in the project and celebrated achieving a 60-70% cost reduction, compared with the Hywind Demo project in Norway.
“Most offshore wind farms require heavy maintenance of turbines from time to time so this was always something that could happen. Towing the turbines to shore is currently the most safe, efficient and proven method to carry out such heavy maintenance of floating turbines,” the spokesman stated.
Insurability concerns Floating wind ambitions have indeed mushroomed since Hywind Scotland came online, including a potential 19GW of capacity in the pipeline as a result of the UK’s Scotwind tender.
But the problems apparently surfacing on Hywind Scotland go to the heart of challenges facing the floating sector.
Although any issues with the 6MW direct drive turbines are unwelcome for Siemens Gamesa, which has faced high-profile quality problems with its onshore platforms, many in the industry warn that the worry is more about a broader perception of risk that is posing a threat to the fledgling sector’s burgeoning plans.
This is felt particularly when it comes to underwriting costs in the insurance sector.
Michael Bullock, director of consultancy firm Renewable Risk Advisers, underlined this point during a recent industry conference in Lisbon where participants discussed the knock-on risks from equipment failure in relation to issues such as the availability of vessels, access to ports and reconnection challenges.
In addition to policy deductibles, insurers usually limit their exposure through serial defect clauses in policy wordings and in renewal negotiations, posing a risk of residual exposure to the project itself, to the extent that protection is not provided by OEM warranties and despite existing cover provided by insurers, Bullock noted.
“Serial defects happen in the offshore wind sector as elsewhere, even with the proper due diligence and certification in place (but) the risk is potentially aggravated by the frequency of new larger turbine designs with different loadings and fatigue rates, and other characteristics,” he told Recharge in a recent interview.
“The costs of an unscheduled maintenance campaign across multiple offshore units will invariably be considerable, in addition to the substantial loss of revenue arising from turbine downtime.”
Bullock added that project developers can mitigate the risks through scenario analysis and contingency planning, feeding into operation, maintenance and spare parts strategies, including pre-negotiated call-off agreements for suitable vessels.
Anchor handlers As one of the world’s leading companies in the offshore production of oil and gas, Equinor is better positioned than many to get its hands on anchor handling tug supply (AHTS) vessels.
The Norwegian offshore giant currently has two AHTS vessels under fixed-term charter, namely the Vega and Ferking but the operator has apparently been arranging extra cover for anchor handlers ahead of the Hywind Scotland operation, according to shipbrokers active in this segment of the market.
“[Equinor] came out with a term charter for an AHTS late last year. They haven’t concluded it yet, but essentially they have two AHTS on charter right now. Ferking goes offhire around October and Vega continues. So from April to October they will have three term-charter AHTS vessels,” a Norwegian shipbroker told Recharge.
Equinor is no stranger to risks emerging in the offshore wind sector, and is among those developers that have stepped back from deals struck for US projects made uneconomic by a surge in supply chain and capital costs.
But recent moves, such as the cancellation of the deal for New York’s fixed bottom 1.2GW Empire Wind 2 project were presaged by the decision, back in May 2023, to suspend the subsidy-free 1GW Trollvind floating wind project in Norway “based on several challenges facing the project, including technology availability, rising cost and a strained timetable to deliver on the original concept”.
A sector-wide need for operational and maintenance experience or “learning opportunities” was also flagged by Victoria Toft, head of data at Danish research consultancy Aegir Insights. She noted that concerns about operational requirements and the implication of repairs of large components raise serious questions for floating wind.
Some technology providers, such as Aker Solutions and Encomara, have come out with new products and solutions aiming, among other things, to facilitate the efficient connecting and re-connecting process with floating turbines.
But a silver bullet solution to the problem of serial defects or failures in large components has not yet emerged, Toft reckons.
“Units in need of larger repairs or major component exchange often need to go far to find suitable ports, due to dimensions of the foundations,” she added.
In the case of Hywind Scotland, Wergeland was identified as the closest yard that was suitable for heavy maintenance purposes, the Equinor spokesperson said. Recharge News
20.12.2023 14:46:10 CET | Ørsted A/S | Inside information
Ørsted has taken final investment decision (FID) on the world’s single largest offshore wind farm, Hornsea 3, which will have a capacity of 2.9 GW and is expected to be completed around the end of 2027. Hornsea 3 will be Ørsted’s third gigawatt-scale project in the Hornsea zone following Hornsea 1 (1.2 GW) and Hornsea 2 (1.3 GW), which are already being operated out of Ørsted’s operations and maintenance hub in Grimsby.
The UK is a core market for Ørsted and one of the world’s largest markets for offshore wind, building on strong political support and ambitious build-out targets. Ørsted currently operates 12 offshore wind farms in the UK.
In July 2022, Ørsted was awarded a contract for difference (CfD) for Hornsea 3 at an inflation-indexed strike price of GBP 37.35 per MWh in 2012 prices. The CfD framework permits a reduction of the awarded CfD capacity. Ørsted will use this flexibility to submit a share of Hornsea 3’s capacity into the UK’s upcoming allocation round 6.
Based on a well-established supply chain and synergies with Hornsea 1 and 2, Hornsea 3 has a robust risk-reward profile and a value creation around the bottom end of our targeted lifecycle project return range of 150-300 basis points on top of our weighted average cost of capital. This reflects part of the capacity being awarded a CfD in Allocation Round 6. The possible future addition of Hornsea 4 would create an offshore wind cluster in excess of 7 GW and unlock further cluster synergies.
We have all major contracts for Hornsea 3 in place, including an agreement with Siemens Gamesa for SG 14-236 DD offshore wind turbines, which have a capacity of 14 MW excluding power boost. Most of the capital expenditure for Hornsea 3 was contracted ahead of recent inflationary pressures, securing competitive prices from the supply chain and allowing time to work collaboratively on value creation opportunities. The larger wind turbines and the synergies with Hornsea 1 and 2 lead to lower operating costs than we have seen before in our portfolio.
In short, Orsted want to renege on part of their existing contract, in order to switch that capacity to double the prices in Allocation Round 6.
Given that they have already set up contracts for suppliers to Hornsea 3, they would have incurred huge write offs if they had simply cancelled the whole project.
The government needs to grow a backbone, and tell them they are excluded from Allocation Round 6.
BERLIN, Aug 23 (Reuters) – Siemens Energy’s (ENR1n.DE) problems at its onshore wind turbine business could cost the company up to 4.5 billion euros ($4.9 billion), Germany’s Manager Magazin reported on Wednesday citing unidentified sources.
Siemens Energy shocked markets in late June when it announced several problems at Siemens Gamesa, one of the world’s biggest wind turbine makers, just weeks after it fully acquired the business it had only partly owned.
Earlier this month, the company announced 2.2 billion euros in charges, including 1.6 billion euros to fix the onshore wind problems – short of analysts’ worst-case estimates but still casting doubt over whether it would keep the business.
According to Wednesday’s report, a special committee made up of CEO Christian Bruch and members of the board had conducted simulations showing the cost of the onshore problems could be almost three times as high as the amount set aside.
Shares in Siemens Energy briefly dropped in response to the report.
A spokesperson at Siemens Energy referred to the company’s Aug. 7 statement saying the cost of the onshore problems would amount to 1.6 billion euros.
When Siemens announced a deal to merge its wind power business with rival Gamesa in 2017, executives saw only upside.
Then Siemens chief executive Joe Kaeser said there was “a clear and compelling industrial logic” that would make “renewable energy more cost-effective”.
Siemens warned on Monday that it was facing a €4.5bn (£3.9bn) loss this year as a result of issues within its wind turbine division.
Wrinkles in rotor blades and faulty gears are among the problems uncovered, which have led to operating issues and warranty claims from buyers. Inflation has only added to headaches.
The admissions of failures wiped as much as €6bn off the value of Siemens on Monday.
The German industrial powerhouse has been in the wind power market for almost two decades and Gamesa, which was until last year a joint venture, traces its roots in the industry back to the 1970s.
Yet a rapid expansion of its manufacturing in recent years has left the combined business over-extended.
Jochen Eickholt, chief executive of Siemens Gamesa, admitted: “We sold turbines too quickly,” describing the company as a “victim of our own ambitions”.
Siemens Gamesa manufactures blades for wind turbines, which can measure over 100m in length and are made up of many layers of material.
The technology must be highly precise and testing uncovered flaws causing “abnormal vibrations”, which could lead to damages and other issues.
Jochen Eickholt, chief executive of Siemens Gamesa, has put the issues down to “wrinkles” within layers of the blades and has blamed suppliers. Some have been cut off in response.
Hiccups weren’t picked up earlier because the company was focused on the rapid introduction of new turbines and the ramping up of capacity, Siemens Energy chief executive Christian Bruch said.
Kathryn Porter, an independent analyst at energy consultancy Watt Logic, said: “There’s been pressure from the developers to have bigger turbines, because then obviously it’s easier to build, but there have been a lot of warranty problems.
“Now you’re getting people saying behind the scenes, maybe we need to have a pause on this bigger and bigger turbine thing because they just keep breaking.”
Profitability has been weak in the industry for a long time, she said….
The German company is not alone in struggling: its competitors and its customers are also battling a more expensive landscape for the green energy industry.
Vestas, the world’s biggest wind turbine maker, lost €1.5bn last year after a surge in costs, particularly metal prices.
Chief executive Henrik Andersen said in May: “The wind industry remains challenged by political uncertainty, slow permitting processes and high inflation, which we expect to continue throughout 2023.”
In the absence of endless subsidies and guaranteed, fixed-price contracts (set at ludicrously high prices), the purported economic case for wind power never, ever stacks up. And the metrics are far worse out at sea.
Notwithstanding the $billions in subsidies – gouged from taxpayers and/or lumped on power consumers’ crushing power bills – proposed projects are floundering at sea, and the major turbine manufacturers are well and truly underwater.
As John Hinderaker outlines below, throwing money at offshore wind power projects makes a cocaine habit look like a canny investment.
Offshore Follies Powerline John Hinderaker 25 June 2023
There could be a worse way to generate electricity than by implanting giant windmills in the ocean, but it is hard to think what it might be. Not surprisingly, Britain is finding its plans for offshore wind to be illusive: How Britain’s offshore wind industry ran out of puff.
Championed by politicians as a controversy-free alternative to onshore wind and solar farms, the Government wants offshore wind capacity to surge from 13 gigawatts today to 50 gigawatts by 2030.
Why giant turbines in the ocean should be controversy-free is hard to understand. In any event, things are not going well.
A string of major projects are under threat from spiralling costs, sclerotic planning rules and shrinking subsidies. Industry sources warn that it risks tilting the economics into negative territory. “Things are very hard out there right now,” one source says.
“Negative territory” in this context means that government subsidies are not large enough, and need to be increased.
The malaise is triggering fresh questions about whether the Government’s 2030 target is still achievable – and if the long–assumed maxim that offshore wind costs will keep falling can hold.
There is no significant element of offshore wind’s costs that should be expected to decline, and increasing government-driven demand for the minerals of which wind turbines consume vast amounts will inevitably cause those prices to rise.
Britain’s offshore wind industry exploded over the past decade, with most development concentrated off the east coasts of Scotland and England. Capacity has grown tenfold since 2010, when it stood at just 1.3 gigawatts, with ever-bigger turbines boosting output.
One example is Dogger Bank, a phased development in the North Sea that will eventually generate enough power for 6 million homes.
It would be more accurate to say that if completed, it will occasionally generate enough power for 6 million homes. Wind turbines create electricity 35% to 40% of the time. Most of the time, another source will need to be found.
But rising supply chain costs globally – fueled by energy prices that jumped after the Ukraine war – have slammed the breaks on this progress.
But wait! The energy prices that “jumped after the Ukraine war” were those for natural gas and gasoline. Why would that impact the supply chain for wind turbines? Can’t you just use wind energy to run the factories that produce wind turbines?
Just kidding. You can’t run a factory on electricity that is AWOL 60% to 65% of the time. Reliable energy sources will always be needed to manufacture unreliable energy sources. Although why you would want to do that is anyone’s guess.
Apparently everyone is losing money on wind turbines:
General Electric’s renewables business, which makes the 260 metre-tall Haliade X turbines used at Dogger Bank, reported a $2.2bn (£1.7bn) loss in 2022. The division has been loss-making for eight straight quarters.
Rival manufacturers Siemens Gamesa, Vestas and Nordex also posted further cumulative losses of €3bn in the same year, notes Kathryn Porter, an independent analyst at energy consultancy Watt Logic.
“There has been this narrative, that wind farm costs are falling and will keep falling, but the reality is these prices are too low.
“Turbine manufacturers have effectively been selling at a loss – and those losses have become huge now.”
Wind energy is a sinkhole for money. The only solution is more government subsidies. In that regard, the Brits are jealous of us Americans, who are going deeper into debt to keep the “green” money machine going:
Many of these problems are not unique to the UK. But they are colliding with domestic issues, including the slow planning system and shrinking British subsidies – which now look even meaner when compared to those being showered on companies in the US through Joe Biden’s Inflation Reduction Act.
Thanks, Joe. Another problem is that giant wind turbines anchored in the seabed don’t actually work well, even when “working” is defined as 35% production:
The “bigger is better” approach to turbines is leading to more failures, costing manufacturers more in warranty claims, Porter says. ***
In an effort to cut costs, some developers are attaching the turbines using cheaper foundations on the sea floor, the executive adds.
“Offshore wind is not the Nirvana that everybody thinks it is,” they add. “The risks are enormous. And the rewards are not very good.
“Everyone is going for the biggest turbines, the cheapest foundations, and they’ve all gone for cabling solutions that mean if you get a failure, you could lose the wind farm.”
I think that in 25 years, offshore wind will be seen as one of the worst follies in the history of technology. Even now, a few are asking good questions:
[F]or some, these problems raise much bigger questions about subsidies for offshore wind generally.
“We are 20 years on from when we started subsidising offshore wind, yet we are still having to do it”, says Porter at Watt Logic.
“If you are meant to be supporting a nascent technology until it gets to maturity, then subsidies should eventually fall to zero over time. If that is not your goal, then what is the point of these subsidies now?”
The real point is the biggest transfer of wealth in world history, but don’t hold your breath waiting for anyone to say that out loud. Powerline
150 Windturbinen mit einer Leistung von je 4 Megawatt wird Siemens für das niederländische Windkraftwerk Gemini in der Nordsee liefern.
Siemens will deliver 150 wind turbines with a capacity of 4 megawatts each for the Dutch offshore wind power plant Gemini in the North Sea.
The world’s wind turbine makers are bleeding cash; none of them are capable of turning a profit and all of them are facing financial ruin.
General Electric’s renewables business blew a cool $2.2bn of shareholder value in 2022.
In this piece, Gordon Hughes focuses on Siemens Energy, which thanks to a perfect storm of collapsing subsidies and a thoroughly defective product has seen its share price slaughtered, with further details of the carnage in the pieces that follow.
Wind costs will remain high Net Zero Watch Gordon Hughes 26 June 2023
The crash in Siemens Energy’s share price on Friday has admirably highlighted an issue with wind costs that colleagues and I have been examining for more than a decade. The painful facts are that (i) wind generation, both onshore and offshore, is more expensive than we are being told and (ii) the performance of wind turbines tends to deteriorate with age, in significant part because of the kind of failures reported by Siemens Energy. There is strong evidence to support these conclusions, which has been presented in reports published by the Renewable Energy Foundation in 2012 and in 2020 for the UK and Denmark, with updates provided by the Global Warming Policy Foundation and Net Zero Watch.
The news about Siemens Energy brings a strong inclination to say ‘you were warned’. However, their travails are a symptom of a much more widespread disease, which affects all of us, either directly through the costs of electricity or indirectly as the owners of wind farms (via pension funds and other investment vehicles). The plunge in the share price of Siemens Energy is dramatic, but that may be written off as a temporary market response to disappointed expectations. We need to look beneath the immediate story to understand the reasons for the disappointment and their implications for the prospects for wind generation.
The announcement by Siemens Energy focused on higher-than-expected failure rates for their onshore turbines. These were ascribed to problems with key components, but newspaper reports suggest more systematic design faults in recent generations of large turbines. Previous announcements have referred to problems with offshore turbines, and the market reaction suggests few believe that the current problems are confined to onshore turbines. Further, while each of the major turbine manufacturers has its own specific problems, Siemens Energy is not unique in experiencing high warranty costs due to higher than anticipated failure rates.
In increasing order of importance, there are three aspects to note:
(a) Siemens Energy and other manufacturers have given warranties on performance that won’t be met because of higher failure rates. They will incur additional expenses, either to replace components or to compensate wind farm operators for any resulting underperformance. Those costs are the basis for the write-offs that Siemens Energy has had to take. Investors will be painfully aware that the company has been declaring profits when they sell wind turbines, but without making adequate provision for future warranty repair costs.
In accounting terms this is known as recognising future profits for new contracts. When it becomes clear that the contracts will be less profitable, the company must write down the value of previously reported profits and, thus, the value of the assets on its balance sheet. In effect, though perhaps entirely innocently, the company has been misleading investors about its past and current profitability. Senior managers should be feeling very uncomfortable about their positions since the problem was predictable (and predicted).
(b) Warranties have a limited period – often 5 to 8 years – but the higher failure rates will persist and affect performance over the remainder of the life of the wind farms where the turbines have been installed. Their future opex costs will be higher than expected, and their output will be significantly lower. This will reduce their operational lifetimes, which are determined by how the margin between revenues and costs changes as wind farms get older. Lower revenues and higher costs bring forward the date at which replacement or repowering is necessary. These changes will reduce, often quite substantially, the returns earned by the financial investors – pension funds and other – to whom operators sell the majority of the equity in wind farms after a few years of operation.
(c) Siemens Energy and other manufacturers may argue that they can – with time – fix the component and design problems which lead to high failure rates. They may well be correct. The history of power engineering is littered with examples of new generations of equipment which experienced major problems when first introduced but which were eventually sorted out. Many companies have found themselves in severe financial difficulties or even forced into bankruptcy by these “teething” problems. The error in this case has been to pretend that wind turbines were immune to such failures.
The whole justification for the falling costs of wind generation rested on the assumption that much bigger turbines would produce more output at lower capex cost per megawatt, without the large costs of generational change. Now we have confirmation that such optimism is entirely unjustified – the whole development process has been a case of too far, too fast. Again, this was both predictable and predicted. The idea that wind turbines are immune to the factors that affect other types of power engineering was always absurd. The consequence is that both capital and operating costs for wind farms will not fall as rapidly as claimed and may not fall significantly at all. It follows that current energy policies in the UK, Europe and the United States are based on foundations of sand – naïve optimism reinforced by enthusiastic lobbying divorced from engineering reality.
In the longer term it is (b) and (c) that are the big story. With respect to (a), serious analysts have long since recognised that claims made about future wind costs and performance by the wind industry should not be taken seriously. It has been obvious that they were kidding themselves and their investors ever since the last 2010s. Unfortunately, we have now been tied into a high energy-cost future, with all the implications that has for the economy and standards of living. Net Zero Watch
Still Waiting For The Magical Future Of Free Wind Power Manhattan Contrarian Francis Menton 26 June 2023
Wind power: It’s clean. It’s free. It’s renewable. Google the subject, and you will quickly find fifty articles claiming that electricity from wind is now cheaper than electricity from those evil, dirty fossil fuels. So why doesn’t some country somewhere get all of its electricity from wind?
In fact, despite now several decades of breakneck building of wind turbines, no country seems to be able to get even half of its electricity from wind when averaged over the course of a year, and no country has really even begun to solve the problem of needing full backup when the wind doesn’t blow.
Germany is the current world champion at trying to get its electricity from wind. (It also gets a small contribution from solar panels, but since it is the world’s cloudiest country, those don’t help much.). According to Clean Energy Wire, December 2022, in 2020 Germany got 45.2% of its electricity from wind and sun. Then that declined to 41% in 2021, due to lack of wind. In 2022 they appear to have bounced back to 46%. Germany has enough wind turbines that they produce big surpluses of electricity when the wind blows at full strength. But they still haven’t cracked the threshold of meeting 50% of electricity demand with wind and sun over the course of a year.
It’s no better over in the territory of co-climate crusader UK. Despite a crash program to build wind turbines (also accompanied by a smidgeon of solar panels), the UK’s percent of power from wind in 2022 was 26.8%, according to the BBC on January 6, 2023. Solar added a paltry 4.4%.
Well, maybe this project isn’t as easy as the central planners thought it would be. News of the past week brings to light a few more speed bumps on the road to energy utopia.
At the website Not A Lot Of People Know That, Paul Homewood on June 21 presents a calculation for the UK of how much wind turbine capacity would be necessary to supply the country with all its electricity needs by building extra wind capacity and using it to electrolyze water into hydrogen. The calculation was initially prepared by a guy named John Brown, and provided to Paul. For those interested in reviewing the calculation, it is available by emailing Mr. Brown at jbxcagwnz@gmail.com.
For starters, Homewood notes that average demand in the UK was 29 GW in 2022, and it has 28 GW of wind turbine capacity already. As you can immediately see, the fact that 28 GW of “capacity” only supplied 26.8% of average demand of 29 GW indicates an average capacity factor of under 30% for the wind turbines. The total demand for the year came to 262 TWh, but the wind turbines only produced 62 TWh.
Brown then calculates how much wind turbine capacity would be needed to generate enough electricity to supply all of the demand, either directly, or by electrolyzing water to make hydrogen and burning the hydrogen. He comes up with 370 TWh of total production needed from the wind turbines — 262 TWh to supply existing demand, and another 108 TWh for the various losses in the processes of electrolysis and then burning the hydrogen. The 370 TWh is about 6 times the current wind turbine capacity of the UK. Homewood:
The reason why the total generation needed, 370 TWh, is so much higher than demand is the hopelessly inefficiency of the hydrogen process. John has assumed that electrolysers work at 52% efficiency, and that burning hydrogen in a thermal generator works at 40% efficiency. Both assumptions seem reasonable. In other words, the efficiency rate for the full cycle is 20.8%. In simple terms, you need 5 units of wind power to make 1 unit of power from hydrogen.
Brown and Homewood do not go into detail on the costs of this project, other than to note that the cost of the wind turbines alone for the UK would be about 1 trillion pounds (or $1.3 trillion). Since the U.S. is more than five times the population, that would mean more than $6.5 trillion for us. And that’s before you get to the cost of building the electrolyzers for the hydrogen, the costs of transporting and storing the stuff, and so forth. Let alone dealing with doubling the demands on the grid by electrifying all home heating, automobiles, transportation, etc. A multiplying of costs of electricity by around a factor of 5 to 10 would be a good rough estimate.
In other words, this is never going to happen. The only question is how far down the road we get before the plug gets pulled. As I wrote in my energy storage report, the only thing to be said for hydrogen as the means of backup for a decarbonized economy is that it is less stupid than using batteries as the backup.
And in other news relating to the future utopia of wind power, we have a piece in the Wall Street Journal of June 23 with the headline, “Clean Energy’s Latest Problem Is Creaky Wind Turbines.” The first sentence is “The ill wind blowing for clean-energy windmills just got stronger.” The article reports that shares of German wind turbine giant Siemens Energy fell 36% on Friday after the company withdrew profit guidance for the rest of the year and stated that components of its installed turbines are wearing out much faster than previously anticipated. Thus costs of fulfilling warranties will greatly increase; but also, the expected replacement cycle for the turbines needs to be shortened. The writer (Carol Ryan) comments,
“The news isn’t just a blow for the company’s shareholders, but for all investors and policy makers betting on the rapid rollout of renewable power.”
Barron’s on the same date (June 23) quotes the CEO of Siemens wind turbine subsidiary Siemens Gamesa as follows:
In a call with reporters, Siemens Gamesa CEO Jochen Eickholt said “the quality problems go well beyond what had been known hitherto. . . . The result of the current review will be much worse than even what I would have thought possible,” he added.
And then there’s the comment from parent company CEO Christian Bruch:
In the call with reporters, Siemens Energy CEO Christian Bruch called the developments “bitter” and “a huge setback.”
Those are by no means the usual types of words uttered by ever-optimistic public company CEOs.
In the short run, don’t expect the climate doom cult to walk away from any of their grand plans. The immediate answer will be more, and still more government subsidies to keep the wind power dream alive. But at some point this becomes, as they say, unsustainable. Manhattan Contrarian
Siemens Energy shares fall amid quality problems at wind turbine business National News Reuters 23 June 2023
Siemens Energy had €5.8 billion ($6.3 billion) wiped off its market capitalisation on Friday after warning that the impact of quality problems at its Siemens Gamesa wind turbine business would be felt for years.
The group scrapped its 2023 profit outlook late on Thursday after a review of its wind turbine division exposed deeper-than-expected problems that could cost more than €1 billion.
“This is a disappointing and severe setback,” Jochen Eickholt, chief executive of Siemens Gamesa, told journalists on a call.
“I have said several times that there is actually nothing visible at Siemens Gamesa that I have not seen elsewhere. But I have to tell you that I would not say that again today.”
Siemens Energy’s share price plunge on Friday was the biggest since the group, which supplies equipment and services to the power sector, was spun off from Siemens and separately listed in 2020.
Shares were down 31.5 per cent at 0842 GMT, with traders and analysts pointing out that the extent of the company’s latest problems was still uncertain.
“Even though it should be clear to everyone, I would like to emphasise again how bitter this is for all of us,” Christian Bruch, chief executive of Siemens Energy, told journalists in a call.
The company’s finance chief Maria Ferraro earlier told analysts that the majority of the hit would be over the next five years.
“Given the history and nature of the wind industry, the profit warning was not a complete surprise, but what surprised us was the magnitude,” analysts at JP Morgan said.
Siemens aims for more smart building and infrastructure deals in the UAE Issues at Siemens Gamesa have been a drag on the parent for a long time, prompting Siemens Energy to take full control of the business after only partially owning it for several years.
The discovery of faulty components at Siemens Gamesa in January had already caused a charge of nearly half a billion euros.
Mr Eickholt said that while rotor blades and bearings were partly to blame for the turbine problems, it could not be ruled out that design issues also played a role.
Mr Bruch also blamed the corporate culture at Siemens Gamesa, the result of a merger of the wind turbine division of Siemens and Spain’s Gamesa, saying: “Too much has been swept under the carpet”.
He said that the setback from the quality problems was “more severe than I thought possible”. At the same time, he said he did not believe that the full takeover of Siemens Gamesa had been a mistake.
Mr Bruch said that the company would be able to provide a more accurate estimate of the costs from the latest problems by the time it publishes its third-quarter results on August 7, after a full analysis of the situation. National News
Wind power: It’s clean. It’s free. It’s renewable. Google the subject, and you will quickly find fifty articles claiming that electricity from wind is now cheaper than electricity from those evil, dirty fossil fuels. So why doesn’t some country somewhere get all of its electricity from wind?
In fact, despite now several decades of breakneck building of wind turbines, no country seems to be able to get even half of its electricity from wind when averaged over the course of a year, and no country has really even begun to solve the problem of needing full backup when the wind doesn’t blow.
Germany is the current world champion at trying to get its electricity from wind. (It also gets a small contribution from solar panels, but since it is the world’s cloudiest country, those don’t help much.). According to Clean Energy Wire, December 2022, in 2020 Germany got 45.2% of its electricity from wind and sun. Then that declined to 41% in 2021, due to lack of wind. In 2022 they appear to have bounced back to 46%. Germany has enough wind turbines that they produce big surpluses of electricity when the wind blows at full strength. But they still haven’t cracked the threshold of meeting 50% of electricity demand with wind and sun over the course of a year.
It’s no better over in the territory of co-climate crusader UK. Despite a crash program to build wind turbines (also accompanied by a smidgeon of solar panels), the UK’s percent of power from wind in 2022 was 26.8%, according to the BBC on January 6, 2023. Solar added a paltry 4.4%.
Well, maybe this project isn’t as easy as the central planners thought it would be. News of the past week brings to light a few more speed bumps on the road to energy utopia.
At the website Not A Lot Of People Know That, Paul Homewood on June 21 presents a calculation for the UK of how much wind turbine capacity would be necessary to supply the country with all its electricity needs by building extra wind capacity and using it to electrolyze water into hydrogen. The calculation was initially prepared by a guy named John Brown, and provided to Paul. For those interested in reviewing the calculation, it is available by emailing Mr. Brown at jbxcagwnz@gmail.com.
For starters, Homewood notes that average demand in the UK was 29 GW in 2022, and it has 28 GW of wind turbine capacity already. As you can immediately see, the fact that 28 GW of “capacity” only supplied 26.8% of average demand of 29 GW indicates an average capacity factor of under 30% for the wind turbines. The total demand for the year came to 262 TWh, but the wind turbines only produced 62 TWh.
Brown then calculates how much wind turbine capacity would be needed to generate enough electricity to supply all of the demand, either directly, or by electrolyzing water to make hydrogen and burning the hydrogen. He comes up with 370 TWh of total production needed from the wind turbines — 262 TWh to supply existing demand, and another 108 TWh for the various losses in the processes of electrolysis and then burning the hydrogen. The 370 TWh is about 6 times the current wind turbine capacity of the UK. Homewood:
The reason why the total generation needed, 370 TWh, is so much higher than demand is the hopelessly inefficiency of the hydrogen process. John has assumed that electrolysers work at 52% efficiency, and that burning hydrogen in a thermal generator works at 40% efficiency. Both assumptions seem reasonable. In other words, the efficiency rate for the full cycle is 20.8%. In simple terms, you need 5 units of wind power to make 1 unit of power from hydrogen.
Brown and Homewood do not go into detail on the costs of this project, other than to note that the cost of the wind turbines alone for the UK would be about 1 trillion pounds (or $1.3 trillion). Since the U.S. is more than five times the population, that would mean more than $6.5 trillion for us. And that’s before you get to the cost of building the electrolyzers for the hydrogen, the costs of transporting and storing the stuff, and so forth. Let alone dealing with doubling the demands on the grid by electrifying all home heating, automobiles, transportation, etc. A multiplying of costs of electricity by around a factor of 5 to 10 would be a good rough estimate.
In other words, this is never going to happen. The only question is how far down the road we get before the plug gets pulled. As I wrote in my energy storage report, the only thing to be said for hydrogen as the means of backup for a decarbonized economy is that it is less stupid than using batteries as the backup.
And in other news relating to the future utopia of wind power, we have a piece in the Wall Street Journal of June 23 with the headline, “Clean Energy’s Latest Problem Is Creaky Wind Turbines.”The first sentence is “The ill wind blowing for clean-energy windmills just got stronger.” The article reports that shares of German wind turbine giant Siemens Energy fell 36% on Friday after the company withdrew profit guidance for the rest of the year and stated that components of its installed turbines are wearing out much faster than previously anticipated. Thus costs of fulfilling warranties will greatly increase; but also, the expected replacement cycle for the turbines needs to be shortened. The writer (Carol Ryan) comments, “The news isn’t just a blow for the company’s shareholders, but for all investors and policy makers betting on the rapid rollout of renewable power.”
Barron’s on the same date (June 23) quotes the CEO of Siemens wind turbine subsidiary Siemens Gamesa as follows:
In a call with reporters, Siemens Gamesa CEO Jochen Eickholt said “the quality problems go well beyond what had been known hitherto. . . . The result of the current review will be much worse than even what I would have thought possible,” he added.
And then there’s the comment from parent company CEO Christian Bruch:
In the call with reporters, Siemens Energy CEO Christian Bruch called the developments “bitter” and “a huge setback.”
Those are by no means the usual types of words uttered by ever-optimistic public company CEOs.
In the short run, don’t expect the climate doom cult to walk away from any of their grand plans. The immediate answer will be more, and still more government subsidies to keep the wind power dream alive. But at some point this becomes, as they say, unsustainable.
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Global warming, climate change, all these things are just a dream come true for politicians. I deal with evidence and not with frightening computer models because the seeker after truth does not put his faith in any consensus. The road to the truth is long and hard, but this is the road we must follow. People who describe the unprecedented comfort and ease of modern life as a climate disaster, in my opinion have no idea what a real problem is.
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