With Laurent's Segoland from London and Gerard Reed from Berlin. This is Redefining Energy Today. On Redefining Energy, we're going to talk about wind, the state of the wind industry.
And winners faced difficult yes recently, supply chain issues, technical issues, but despite that, it continues to grow. So it was probably time to get on the show. Ben Backwell, who is the head of the Global Wind Energy Council, and he really has a view on everything that's happening from China to Europe to America, and he was calling us from benn where he is preparing.
Cop Yeah, so why don't we bring him on the show?
Ben, Welcome to the show.
Good morning, Lauren, Marna Jareds.
First question.
You've been leading the Global World Energy cancial for about seven years. What is the Global Wind Energy Council.
So, the Global Wind Energy Council represents the private sector in the wind energy industry. So we represent the corporates which are manufacturers, developers, technology companies. We also represent the associations around the world, so the associations in Brazil, in Japan, in South Africa, in the US and so on. So we're the voice of the wind industry, and we essentially talk to governments around wind energy and its benefit and
why you should be doing wind. So that's what we're about, and we're really involved intensely in trying to develop new markets. I mean that's always been our things that we were involved in the very early days of India, China, South Africa, Brazil. More recently we've been working in places like Vietnam and the Philippines. We work a lot on offshore wind now over the last five ten years to develop that market
around the world. Yeah, we're out there telling the story for the wind industry and trying to develop the right regulation and policy around wind.
Can we sort of maybe just to talk a little bit about the stage of the industry as you see it now, right.
It's an interesting moment. So wind's been growing fast over twenty years, as you guys know, it's gone from being a very small, almost kind of hobby industry maybe thirty forty years ago to now a big global industry and it's still growing pretty fast. So we've reached one terrawa of wind energy around the world a couple of years ago. We're breaking records in terms of new installations and this
year twenty twenty four. We think we've probably reached about one hundred and twenty gigawatts of installations this year, probably a bit more, maybe one hundred and forty.
Sorry for our listeners. That's double what it was ten years ago. So it's remarkable because we hear our WIN is not working and no, guys, we've been doubling WIN. We've been doubling the past ten years. So this is a growing industry. And I want to go on the runt, but maybe I'll do the runt a bit later.
Just go on, Ben, I'm looking forward to the rank.
Lauren.
Well, yeah, we're on the trajectory i'd say of doubling, probably around twenty thirty twenty twenty thirty one mark. So that's the good news. You know, we're growing. I guess the not so good news is we're not growing fast enough, both in terms of meeting the energy climate targets that countries have, but also in terms of playing our role within the transition. And maybe we can dig into that
wind plays a really important role within the transition. It's not just about the giga what's installed, it's about the gigaw's produced by wind, and it's about the relatively high capacity factors that wind has compared to some of the other renewed energy sources. So wind is going to play a really important role in terms of the actually energy produced in the energy transition. And we're not going fast enough. I guess the other challenge is that we're not growing
in all the right places the right speed. If you look at maybe twenty twenty five that we're in at the moment, we could probably expect something maybe up to one hundred and fifty gigwatts of new installations, but probably even up to one hundred giga's is going to me in China, China being by far the biggest market now, and that's not a bad thing, that's a good thing. So the challenge for us is we need to be going much faster everywhere else in the world. So you've
got a few places are doing pretty well. You've got the kind of big markets China, the European Union, the US, up and down India.
You've got many.
Other places where the progress is just way too slow.
Can I ask you, if you're talking about the hundred giga, what's going to China? Right when you talk about that fifty Gigawa's that's not going to China, and just how the various markets there are performing. You said, the European market, the US market, and then by the way, anything else in terms of sort of you know new markets that are coming up that you think, oh my god, it could be really exciting.
For on shore.
What we're seeing now is India speeding up. Germany's doing really well now that they've reformed the planning laws, the UK is coming back, and there's also place like the Middle East now right which are completely new markets. And we're talking about places like Egypt. We're also talking about Saudi becoming a a pretty important market. You've also got places like Central Asia now that are doing big on
your wind projects. And then you've got offshore, which is growing faster than the average of wind as a whole. And there you've got, on top of the European Union, China, UK, you've also got these places now like Japan, Korea, Philippines, Vietnam, all of which now have big off your wind targets and are trying to implement. So there's good new areas of growth coming as well.
Okay, can I start my rant, guys.
Yeah, go go ahead of the rant.
Let's hear it.
Okay, So my rant is the following. If there was no wind industry, basically we would need.
Two more Qatar.
The number of attacks that this industry has been subject to were a victim of a cultural war from the extreme right. Those people who don't know nothing. We see them in the press in Europe. In the US, they're supported by the fascify industry, sometimes even the nuclear lobby. But at the end of the day, if you look at the name of those people, which I don't want to name because they don't deserve to be named, they are also supporting Russia. So an attack on the wind is an attack on freedom.
That's it. I finished my runt.
That was a very early round for you, you know sometimes.
Yeah, but Benni's in belems be so that's very early for him. And talk about the Cup because the wind industry has a very important role to play in the Cup.
So how is Bedam going.
Well, it's seven o'clock in the morning and it's pouring there with rain and it's hot, but it's a great place. It's beautiful and people are incredibly welcoming. You can see all the preparations going up all around the city and we're meeting with the state authorities today. We've been in Brazili at the last few days meeting with federal authorities around the Cup and the COP president and see team
in different ministries. So yeah, it's always exciting coming to Brazil and this year COP is pretty important both for renewables and for win. Why because it's what they call Global stock take Year, which is when countries have to come and put their numbers on the table and show what they're really doing in terms of carbon reduction. It's also a year where countries need to come and present their NDCs, which are their targets in terms of implementation
in terms of energy and climate. So these are them nationally determined contributions. So it's a pretty important year and maybe related to your rant Alaurum, we come at this at a time when renewables is being attacked and especially where wind has been attacked now for several years. There's a lot of disinformation out there, there's a lot of noise out there, a lot of it coming from the same place, and there's an attempt to undermine the international
frameworks around this and that can have its effects. Especially important this year that the world comes together that there's a sensible discussion that to the willing of countries and actors that are pushing forward the energy transition come together, and that we're really confident and firm in our commitment.
You know, we can't let.
This noise and disinformation on the mind of what we're doing.
Ben, and I just like to follow on from what you said, and also from Laurent's rant, which is, I mean I'd come at a slightly different angle, which is we can't block this energy transition anymore.
Right.
And when I hear people sort of say, oh, yeah, we need to build a nuclear because of AI, got good luck to you on that.
I'll take you fifteen.
Years to build a nuclear power station, doesn't help you with your AI. But actually I go and say, well, you want to build a CCGT, I go, good, look, you won't be able to get one of them till twenty thirty because you know, the order books are followed for g and Siemens and midsubci and.
By the way, the price is double and the prices.
So what this means is what a huge opportunity for the wind, the solar, the renewable industry going forward, because you've got a willing. Let's say buyer of Power and AI plus you've got man for electricity in the Western world going up for the first time in years.
I look at it a slightly different way.
I just got my god, economics is gonna win, energy security's going to win, and competition policy is going to win. So it's just about I don't say, ignoring the bullshit that we're hearing around, but just maybe going out with a different message, which is you can't resist renewables.
Yeah, I mean I tend to agree with you. We definitely shouldn't be panicking. We should definitely be keep calm and carry on, and we should be just going out there and walk in the walk and building. And I think it's really important that we don't get distracted just by all the noise, like you said, and we don't need to go out there and fight everything. We need to just show that what we're doing is effective and
the economics are compelling. As you say. Having said that, one of the things we've realized over the last few years is that sometimes the politics can disrupt massively in a way that's really unhelpful for the transition. And if there's one thing I think to go to win specifically, I mean, our economics are compelling, and the role we need to play within the energy transition means that we need to be really central. But it's really hard to get things done in many places, and this is probably
the main thing holding us back. It's not the economics in terms of price compared to other technologies, right, And it's not the economics in terms of us of the system impacts of wind. It's the fact that it takes way, way, way too long to get stuff done in many places. And there's many factors blocking us in many countries. And that's true even in the most favorable places like in the European Union or the UK. There's a lot of
factors that blockers all the time. And you see that all around the world, and there's a kind of inertia, you know, kind of government inertia where the complexity seems to kind of just increase, the bureaucracy seems to kind of increase. And that really hurts us because, as you say, in terms of actually going out and building projects, we can do it a lot quicker than certainly the nuclear
more than gas. As you say, this used waiting lists for many components for many other technologies, and so it absolutely makes sense. But what I see is this kind of idea that there's a silver bullet somewhere in the future that's going to solve all the energy problems, right, whether it's nuclear fusion or something or SMRs, and that's going to solve all the problems. In the meantime, it just kind of slow things down. And I think that's
the danger. That's slow and then people tell around and say, well, this doesn't work.
You've been listening a very popular episodes about Bill Gates, you know, and smell and all the click.
But the old the old world.
Was oh my god, yeah or your again.
I mean.
But also what I would like to pinpoint is that not only the industry is growing, but the technology is getting better. If you compare the type of turbines we put now on shore and offshore compared to say fifteen years ago, I mean, they have what triple size, so that they're bigger, there is less footprint, they are more productive. So this industry continues to innovate. I mean, I don't know, we're like we're talking about of shot to buying a twenty megawork.
I remember the first one. They were like four or fivelence.
So this is this is remarkable.
The technology is incredible. Also, the efficiency with which we can install turbines is completely different. I mean, you know it used to be you know, when we started doing offshore, you were lucky. If you can install one turbine a week on a offic wind farm. You can do now easily one a day.
And that's just.
How the technologies improved, the installation technology, but also the tech in terms of how we integrate with the grid, the sensors, all that. That's again, that's the good news. I guess, you know, I don't want to put a downer on it. And the bad news is that a lot of companies don't make money and there is an issue there with the way the market's set up. The returns for many years have been have been really bad for wind energy manufacturers. More part of this relates to
continually going to bigger and bigger turbines. Part of this is how do we just make everything massive in terms of manufacturing and standardize and just kind of push out what we've already built rather than continually being pushed to kind of go to bigger turbine.
Bright the way, could I just say it's this nice to cover this sector as an analyst.
I mean, the thing that I would reflect on now is that the market's in a totally different place than it was ten years ago, because ten years ago you had I've got to say, you have too many manufacturers, particularly on the onshore side, and you also had on the offshore side too many manufacturers. Now, looking from I'm talking from a western point of view, you've got two players left and then you've got this one or two
Chinese players, and that's sort of an Oligopoli situation. You would assume in that type of environment that margins will improve, and also in the onshore space, I would say the exact same thing. Now. The caveat and all that is whether the Chinese are really going to internationalize and compete with the Vestas and the Semens of this world and whatever going forward, it might bring another sort of factor and force of change into this industry.
Right.
This means it's all good for the customer at the end of the day, because it means competition is driving innovation and price reductions.
Now, for sure, we've been incredibly successful in bringing down the price and we are competitive pretty much ever in the world. The factor which is causing doubt in the industry or kind or limiting the ability to scale up really is the way that off take work. You know, we moved from feeding tariff to auctioning quite a few years ago, and then since then there's been this race to the bottom in terms of prices, which we totally get.
We want to provide value the consumer, we want to be competitive, but often some of those off take systems don't really allocate risk in a way which works for investing and manufacturing. And I'm talking about things like auctions that are kind of zero bids or negative bidding auctions, which are essentially mean you have to take risk on a kind of future power price. Some of those things are unhelpful, and then needs to do a better kind
of risk allocation. This is the energy transition, and there needs to be pretty clear signals to move on decisively when we're in that kind of middle period, and I do think in many places in framework the incentives are not there to do that effectively.
I agree with you, because if you look at the conditions that are given to new coal plants in Asia, they get PPAs which are like insane at prices which are like double because let's say it, because of corruption. The coal industry is a corrupt industry. And if we have the same condition as the coal industry, I mean, we would put three times more wind. So I'm sorry, I mean that's my second rant of the episode. But
I guess this is wrong day. We are not treated properly by all those guys that they're going to come and smile at cop and yeah, yeah, yeah yeah, And you know behind some of those people are nefarious. They are nefarious. They prefer their personal interest to the interests of the people. But okay, me saying, let's move to probably a bit more positive territory, which is the new report that you're going to put out in a few days, so kind of explain what it is.
So the Global Wind Report is the report from a bottom up perspective, details all the projects in the world where the wind industry is growing, what we've installed, but also every year kind of has a theme around the challenge is where the new markets are. So that report's coming out soon. It's going to show from the data, pretty good year, but not as good a year as we expected. Probably around another record year, but again not going as fast as we'd like. And there's a few
things to note. Maybe one is the US, where it's been a little bit disappointing compared to what we're expecting. But in generally it will show a pretty strong year and with some growth areas in new markets, but also will show a few places where they really getting their act together and speeding up. Germany being one to mention. It shows where government has really gone and reformed planning law for instance, really gone and put in the right
measures and say we're serious about speeding up. It can be done. Yeah, that's what the report's about. Be a pretty good year for US.
You talk about the US, so let's talk about the US. The politicization offshore win especially has been in my personal opinion, despicable. And if I look at the right offs, I mean that poor hosted how much did they had to write off like five billion on the various project and also
ILIEV got a billion shelled billion and so on. So that industry, our industry honestly believed that there was a case and they started putting the supply chain and do the analysis and everything has been just torn down following a no full campaign. Really, those people who are beyind should not be proud. I mean, like, what a.
Way is dying? Yeah, ten years before they shot, they'll byar rise.
I mean this is absolutely ridiculous. Yeah, that's my third round. Sorry, I thought the last round.
I'm gonna give an answer to that round because I have a completely different view. Okay, I've used very simple United States. They're blessed with incredible natural resources, incredible onshore resources in terms of wind, incredible resources in terms of solar and also gas. So why the hell should they pay you know, treble digit prices per mega water for offshore wind when they can do it unshore and through
all the other sources for cheaper. So for me, I would actually go and say, stupid Europeans for going over there and banking on the American government going and putting.
Massive subsidies in for off show win when they don't need it.
Yeah, I hear you, misters a week. You'll be reinvited next year. But let me tell you. Try to take a cable from Kansas or Clubat to New England, you know, and cross twelve states and I don't know how many counties and so on. So, yes, there is a resource, fantastic resource in the center of the US, but we were talking about the northeast where they don't have the gas. So in fact, the gas they paid as much as in Europe because there's no pipeline, there's no wires. There
are big load centers between Boston and New York. So it made a lot of sense if you consider the global price to the system, not just the three digits.
Okay, it's what.
I'm fine to have a win at a twenty dollars o MAGA what hour in Oklahoma. But if you need it in Boston, I'd rather put my offshore wind across Boston.
And Ben, I'd like to hear your thoughts that it's a little bit like if I'm seeing what's going on in Germany with off show wind. You've had the CEO of r wa ade on the two biggest utilities basically go out say off show wind makes no sense whatsoever, they say from an economics point of view. Now they're not talking, by the way, necessarily about the turbine cost.
They're talking about the grid course. So I would just say that where I'm trying to point out is Derek is concerned about the economics of offshore wind compared to other alters.
There's two things.
First of all, US on shore wind is extremely competitive, right, and it was very powerful in developing the wind's industry as a whole. In the arguments for winds. We've got to remember that when we started really winning the arguments was where when we could do win in Texas and those kind of places are just hugely competitive prices and those economics are really compelling, and utilities and customers prefer win for that reason because you can install it quickly
and it's great economics. So that should continue and you know, and we're seeing a lot of projects continuing and repowering and those economics will not go away. And especially, I mean, given what you guys have said about nuclear and gas, that just is going to make sense to the US economy. When the Inflation Reluction Acts was announced, we were really expecting a real boom in onshore wind mainly but also
in off us offshore wind industry to start developing. Unfortunately, the deployment of that wind in the US was slower than it should have been, and that's mainly because of permitting, but also because of complexity around releasing IRA credits, and so the boom I think that people were expecting has only half happened. And then, of course then you get a new government coming in that has had from what I can see, a kind of chilling effect on project development.
So that's on one side, and then on offshore wind I kind of go with Laurent. The economics makes sense on the East Coast and some other places because of the way the US system works, and you know, you're looking at building an industry which can then deliver very very competitive prices with very large scale projects, right, and you know you've got to go through that early deployment phase.
We went through that in the UK, we went through that in Europe, and we got to a place where off your wind could deliver very compelling prices for power. So the US was just starting that journey, and a lot of the supply chain development was predicated on getting IRA credits that proved to be more complex than people
have expected. There's also issues around local supply chain difficult part of the IRA was it was also predicated again on basically doing things in the US and doing all the supply chain in the US, and that supply chain wasn't there, so that caused issues as well. And now of course, we have a suspension of permitting in federal lands for offshore, which is federal, So that essentially means that if you're not if you don't already have a
license and you're not already building, it looks difficult. And that's politics, that's not the economics. So I think a lot of people were expecting the kind of ira ifuel boom to happen that hasn't really happened. I mean, for a market that's as important as the US for US, it matters. It's not the biggest market, not more than five percent of the global market, but I think it was one where a lot of people were expecting it to continue to grow strongly, especially right now.
Ben.
Maybe just as the last question, can we talk a little bit about this whole concept of wind reset.
What do you mean by this?
We kind of coined this term because we could see that the industry had grown steadily over many years. But I feel like we're a bit of a pivotal moment where we're obviously going to keep growing, but we need
to grow at this kind of accelerated pace. And it's like we've come up against some structural issues around the world and they're kind of common issues in many many markets, and so we started talking with our members about in this kind of reset where we can get on a kind of accelerated path, where we can get on track with the climate and energy targets move towards more of
a tripling trajectory rather than a doubling trajectory. So we did a lot of work around this with partners like Bloomberg manif and we've come up with these kind of areas where we want to look at and we're bringing the industry together around these and a number of forums. There's a number of work streams. You know, there's some really clear fixes that together with governments, we can come up with which can get us on an even faster track.
Well, Ben from Brazil, it was a great pleasure to have you on the show. And I like to tell our listeners we the wind industry were the Jedi Knights of the energy transition and we'll defeat the evil Empire.
Child quite could just laugh at that. Thanks for cop of that machine.
Thanks guys being fun saying well job.
I like those conversations a bit tough.
Some runs.
I love to do some runs with bull that around and you know my conclusion is sonar has to go with batteries and win as to go with skyboards. It's as simple as that.
I like that.
That's a very good way pulling it very good. You're absolutely right.
I never thought of that that form, but it makes sense because what you want to do is you want to move WIN from areas where there's lots of wind to where there's no wind, where there's no correlation, and that requires just with some it's much easier because what you do is you just put in the battery and use it when the song goes down.
It's pretty simple. Yeah, exactly, Yeah, I like that.
Pretty good. Good conclusion. The good conclusion.
Look, the second conclusion, and this is something I also said directly to the Solar Association, is guys, there's so much solar now. There are really countries where it's almost uncontrollable with capture price, and so that please don't push governments for solar auctions. If you really want auctions, you pair solar and batteries. But you know, solar unconstrained or uncontrolled, is detrimental to the stability of the system. So what
was good fifteen years ago is not relevant anymore. Plus it's gonna spare some taxpayers money.
I like it.
We need firm green power firm. Absolutely absolutely. We thank Ben for on the show. We are a big supporter of the winning energy.
Thank you very much. Ben, it's great having you on. It took us a long time to get you on, but who's worth it.
And jeorb I'll talk to you next week, loocome.
Forward to it.
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