German wind industry wants 'clarification' on state aid and says red tape must ease too

Sector and manufacturers' groups welcome vice chancellor's proposals but say other measures such as faster permits and clearer tendering rules needed

German vice chancellor Robert Habeck talks to workers while visiting the Siemens Gamesa wind turbine factory in Cuxhaven, Germany.
German vice chancellor Robert Habeck talks to workers while visiting the Siemens Gamesa wind turbine factory in Cuxhaven, Germany.Foto: Getty/Getty Images

Germany’s wind industry welcomed proposals by vice chancellor Robert Habeck to grant state subsidies to the embattled sector to guarantee a faster expansion of renewables, but called for clarification on the nature of envisaged state aid and urged faster permitting and clearer tendering rules.

Habeck after a summit with representatives from the renewables sector tabled a range of subsidies, including temporary operating grants to manufacturers, Capex and Opex support geared towards expanding or building new manufacturing plants, and EU-backed support for innovation.
The initiative for potentially massive German subsidies came in the wake of a recent proposal by the European Commission to loosen EU state aid rules in a reaction to the US Inflation Reduction Act that introduces very generous tax brakes for renewable technologies, triggering fears European manufacturers could shift production to the US.

“From our point of view, the fact that the BMWK [Federal Economics and Climate Ministry] now also wants to support the industrial ramp-up economically is the right measure at the right time,” said Hermann Albers, president of Germany’s wind energy federation (BWE), which supports the wider wind sector.

“Far too much time still elapses from the application for approval to the actual commissioning of the plants.

“However, the government's expansion goals make a rapid increase in production capacities necessary. The fact that the federal government now wants to support manufacturers in building up these capacities is an important signal for planning and investment security in the industry.”

The government of German Chancellor Olaf Scholz targets to boost renewable power consumption to 80% by 2030, up from nearly 50% last year. To reach that goal, the onshore wind expansion alone would need to reach 10GW per year this decade, but only 2.4GW (gross) were added last year.
To speed up permitting and make more areas available for wind energy, the BWE said Germany should make full use of a recent EU emergency ordinance. The measure allows member states to give renewables the status of being in the ‘overriding public interest’ to fast-track approval processes, for example regarding environmental assessments – and apply a population-based approach to biodiversity instead of case-by-case decisions that have been blocking projects in many countries.

Germany should use the 18-months-period of the emergency measures also to boost repowering.

“It must be the target for 2023 to permit at least 10GW in new [wind power] capacity,” Albers demanded.

VDMA Power Systems, which represents wind turbine manufacturers, said it was positive that Habeck included the stakeholders in a dialogue on industrial capacities of the renewables sector, and stressed that businesses need a reliable market, in which more projects are approved and built.

“In some places, however, improvements still need to be made. There is still a need for further clarification, especially with regard to the measures to secure the production capacities of manufacturers and suppliers in the wind industry,” VDMA Power Systems managing director Dennis Rendschmidt said, however.

“This applies to the questions of guarantees and the design of the qualitative criteria in tenders.

“In addition, the development of infrastructure and logistics capacities as well as skilled workers must be supported more closely.”

Nordex starts 6MW serial production

While Habeck has realised the need for subsidies to aid the troubled wind sector, the industry is moving ahead with necessary production upgrades.

German wind turbine manufacturer Nordex despite financial difficulties yesterday pressed the start button for series production of nacelles of its new 6MW model at its Rostock assembly plant.

Nordex starts serial production of 6MW onshore turbine.Foto: Nordex

"In the long-term annual output of these large turbines alone is to amount to approx. 1GW here,” Nordex chief executive José Luis Blanco said during the celebration of the series start.

"We have invested some two million euros in redesigning the production system in Rostock."

The OEM already has received 1.1GW for the supply and installation of its new N163/6.X turbines, with orders coming from Germany, the Netherlands, Finland, Turkey and Estonia.

But while the market clearly is demanding more turbines and with it more output capacity, Nordex only last year had to close its blade production at the Rostock site amid financial woes – a fact illustrating the argument for state aid.

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Published 22 February 2023, 11:12Updated 22 February 2023, 11:42
EuropeGermanyVDMA Power SystemsBWE