Are Wind Power Subsidies Really Worth It?

The wind energy industry has been facing difficulties in recent years, thanks to both unfavorable economic conditions and unreliable technology. This is resulting in major losses and even cancellations of big offshore wind projects in some cases. The major manufacturers aren’t getting orders the way they once did. Critics say that more subsidies to the industry are not the solution, as subsidies have in fact encouraged the development of immature technology that is still not viable.

Major Companies Facing Losses

Siemens Gamesa, a huge German electrical equipment manufacturer, reported a staggering loss of $967 million during the last quarter of 2022. The company said that governments would need to continue subsidizing the industry to ensure positive future growth. “The negative development in our service business underscores that we have much work ahead of us to stabilize our business and return to profitability,” said Siemens Gamesa CEO Jochen Eickholt.

General Electric (GE) is also facing losses due to supply chain pressures and inflation. The wind unit of the business reported a loss of $2.2 billion in 2022 – and they’re reducing the global headcount in their onshore wind unit by about 20% as part of a restructuring plan.

Here in the U.S., at least one major project is being abandoned. Avangrid has told the state of New Hampshire that they can’t afford to move forward with an offshore wind farm (the state says otherwise).

Why the Equipment Trouble?

One of the main difficulties inherent in wind energy is that wind is variable. It can change in intensity and direction unpredictably. When this happens, stresses are placed on wind turbines’ generators, blades, and transmissions. And because turbine blades have to be very large in order to generate a meaningful amount of power, the materials of the blades face even more stress.

What’s the Future of Wind Subsidies?

Critics of wind subsidies say that they should end, especially as atmospheric CO2 has risen without serious consequence, proving the “doomsday” models wrong. They also contend that subsidies encourage technology that isn’t fully developed and may never be fully viable. What does the future hold for these kinds of subsidies and wind power in general? We’ll have to wait and see.

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