Wind is on hype and manufacturers are on losses?

In Opinion



In recent weeks, major players in the wind energy sector have reported financial results for the first half of the year. Siemens Gamesa Renewable Energy has reported a loss of more than 600 million euros, while Vestas has exceeded this figure, reporting a loss of almost 900 million euros in the first four months of the year alone. The renewable energy sector in general, and wind energy in particular, is one of the sectors with the highest projected growth rates for the coming years. Moreover, it is one of the pillars on which the future of energy policy in Western countries is based, thus receiving major institutional support and funding. What is happening, therefore, for us to find that large companies in the sector are losing significant sums of money?

Wind power generation depends on the Levelized Cost of Energy (LCOE), which measures the average cost for a generator to produce electricity over its lifetime. In the case of wind turbines, this cost decreases as the wind turbine increases in size. Thus, the larger a wind turbine is, the more energy it will produce at a lower cost. This fact has driven manufacturers to design larger and larger generators. However, due to inflation, we have reached a point where the cost of raw materials is causing the size of generators to increase and, rather than improve profitability, decreasing it. This is one of the reasons for the huge losses of companies such as Siemens Gamesa Renewable or Vestas.

In a situation where the LCOE is at a highly competitive point and where larger size does not allow you to be more profitable, wind turbine manufacturers must focus on other aspects. Consolidating product portfolios, investing in Research & Development and increasing the efficiency and flexibility of wind turbine generators is what the major players in the sector should be thinking about.

Apart from that, extending the life expectancy of the equipment is another parameter that reduces the LCOE of the wind turbine generators and that can be a key factor in the sector. On average, the life expectancy of the WTG is estimated in around 20 or 25 years, but, with strategic investments in software that reduce the fatigue of the generators, it can be extended to 30 o 35 years. This extension would make the wind power plant more efficient and profitable.

Windmills row - ADEX

In this context, ADEX, thanks to its self-tuning AI technology, directly becomes a solution for the industry by improving the performance of both the efficiency and flexibility of wind turbines, thus extending the life expectancy of the WTG, and making the power plant more profitable. The ADEX Controller allows an overall improvement in the wind power generation process focusing on three parameters:

  • ADEX Self-tuning AI control improves on real time the performance of the wind turbine.
  • Operational wind range is extended, enabling a higher generation of electricity.
  • Increasing life expectancy of equipment.

The wind energy sector has undergone a major change, and only the players that are able to adapt will survive in such a competitive environment. Visit our website to learn more about ADEX‘s disruptive technology: