Wind power could become too cheap, trimming the profit margins of component manufacturers too much, said
Wind and solar power are often cheaper than their fossil fuel rivals, a boon as the world transitions to renewable energy and away from sources with high
"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," Nauen told Reuters.
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"We have probably driven it too far," Nauen said. But continuing to cut costs at the same rate will hurt wind manufacturers’ ability to invest in new factories, and in research and development of new technologies, he said.
Competition is high as countries move from subsidising wind projects to competitive auctions or sales. Margins have been further squeezed by supply chain delays and escalating prices of commodities such as steel and resin.
"We need to change auction systems in the future," Nauen said. He suggested job creation should be considered as a criterion in awarding contracts instead of just a low electricity price.
Earlier in November, Vestas cut its 2021 outlook for a second time in less than 12 months, and now predicts an operating profit margin of 4% instead of 5%-7% – and in sharp contrast to its long-term target of a 10% margin, said Reuters.
For its part,
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