Vestas welcoming in a wind of change

World’s biggest wind turbine company hails “turnaround” in its fortunes

Vestas is the world-leader in wind turbines. According to a report by the independent consultancy MAKE, the company installed 13.2 percent of all wind turbines worldwide in 2013 and produced 28 percent more power than its nearest competitor.

Anders Runevad, the group president and CEO of Vestas, in his comments accompanying the 2013 report described the year as marking the completion of a “turnaround” for the company, following crises in 2011 and 2012.

New geographical focus
But the turnaround comes at the same time as a shift in focus for the company. Vestas no longer sees Europe as its key market. “While still important, the European market is stagnating compared to other markets like North and Latin America, South Africa, and elsewhere,” Runevad said in the annual report.

Decreasing governmental support for wind power is cited as a contributing factor to the slowdown in Europe.

Denmark: historically key market
At the 2009 climate summit in Copenhagen, a huge wind turbine was erected directly outside the conference centre to demonstrate to the outside world Denmark’s commitment to clean energy production.

In 2012 a broad majority in parliament voted in favour of an energy agreement to map Denmark’s energy policy until 2020 and its direction until 2050. The agreement set an ambitious target: that by 2020 35 percent of the country’s energy would come from renewable sources – 5 percent higher than the common EU target.

Political opposition to climate plan
The future of the agreement was called into question recently by opposition parties Venstre, Konservative and Dansk Folkeparti.

The main issue precipitating the debate is the extent of support for renewable energy.

This support comes principally in the form of the so-called Public Service Obligation (PSO) levy, imposed on energy consumption and paid by business and domestic consumers.

Since 2012, the levy has increased dramatically (see Figure A), causing critics to question whether it is a hindrance to Danish competitiveness.

Further opposition to green goals
Last month, the environmental economic council, Miljøøkonomiske Råd, reported that Denmark’s climate goals are too optimistic. Rasmus Helveg Petersen, the minister for climate, energy and building rejected the findings of the council.

Came to a head
The issue came to a head last week when parliament voted on whether to renegotiate the agreement. A resounding majority voted in favour of keeping it.

Nevertheless, despite the government’s official position on renewable energy in principle, Petersen has expressed doubt about whether new wind farms will be built in the future unless the price can be reduced.

New dimension to the energy debate
The current political tensions with Russia resulting from the situation in Crimea have brought a new dimension to the energy debate in Europe.

The EU imports vast amounts of gas from Russia, accounting for a large proportion of its energy needs.

The minister for foreign affairs, Martin Lidegaard, spoke last week on Wednesday about the implications of the crisis at a press conference in Brussels ahead of an EU summit.

“I hope this is a wake-up call for the parties that are nervous about the Danish energy policy as it is now,” he said.

Continuing dependency on energy policy
Having quelled rising opposition to the green agenda on the home front, Danish ministers will lobby for continued focus on renewable energy in upcoming EU meetings in Brussels.