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Higher raw material prices and logistics delays have prevented the world’s biggest wind turbine makers from posting bumper profits this year despite booming wind power installations and the global drive for clean energy supply.
Earlier this month, one of the world’s largest wind turbine makers, Vestas, revised down its 2021 guidance “to reflect the current environment characterised by supply chain constraints, cost inflation, and restrictions in key markets caused by COVID-19, and the impacts this is likely to continue to have in the second half of the year.”
GE reported 16-percent growth in revenues in its renewable energy segment, but the division booked losses for the second quarter and the half-year, although they were smaller than last year’s.
Another major manufacturer, Siemens Gamesa, lowered at the end of July its 2021 revenues guidance to the low end of the previous range to reflect the “sharp increase of raw material prices,” as well as “increased estimates of ramp-up costs for the Siemens Gamesa 5.X platform, especially in Brazil.”
This quarter, Siemens Gamesa began to introduce clauses into its onshore contracts to protect against commodity price volatility, mainly for steel towers.
“We are operating in what is currently a very difficult environment and have taken additional steps to balance our risk profile as we focus on delivering long-term sustainable profitability,” Siemens Gamesa’s CEO Andreas Nauen said in a statement.
Vestas CEO Henrik Andersen told The Wall Street Journal:
“There is a logistics challenge in major harbors in the world due to Covid lockdowns.”
Higher transportation costs are expected to last until the beginning of 2022, Andersen told the Journal.
Higher commodity prices, logistics costs, and COVID-related challenges are expected to raise wind turbine prices by up to 10 percent over the next year to year and a half, Wood Mackenzie said in an analysis this month.
Meanwhile, the financial performance of some of the largest offshore wind developers in the world was hit in the first half of 2021 by significantly low wind speeds and other weather-related events.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.