Europe: Building new wind turbines will cost more

The European wind industry is facing a new challenge. And this taking into account the objective of the European Union to strengthen its energy capacity from renewable sources and to free itself from Russian fossil fuels. Problems in the supply chain could, however, hamper the development of the wind sector, according to analysts.

Renewable energies, in particular wind energy, can play a crucial role in Europe’s energy security. However, the outbreak of the Russian-Ukrainian war led to disruptions in the supply chain. It has also led to an increase in the prices of raw materials. It is therefore utopian for the moment to be able to build new power stations in the short term. And this to produce energy from renewable sources. Thus the construction of new wind turbines

Skyrocketing prices

According to data provided by ‘London Metal Exchange‘, the price of certain raw materials used to build wind turbines, such as steel, aluminum and nickel, has soared in recent weeks. This is due to the conflict in Ukraine. And, for the moment, it is impossible to make forecasts on the evolution of prices. This means that it is impossible for companies in the supply chain to estimate the costs with the delivery of the product in four to five years. Russia and Ukraine are the main producers of steel in Europe, the material from which wind turbines are mainly made, but with the outbreak of war steel imports into the EU fell by a fifth, says the same source.

In addition, the price of hot rolled steel has increased by 40%. Spanish steelmakers, such as ArcelorMittal and stainless steel producer Acerinox, have cut production. While the German Lech Stahlwerke has completely stopped production. Aluminum is the least impacting component. And this for the wind industry. But it is still used for various components, such as rotors and cables. Russia is also the world’s largest producer of nickel, an essential component of wind turbines.

A new geopolitical reality

Even before the war in Ukraine, Western countries were concerned about the security of supply of raw materials needed for the energy transition. Indeed, the desire to move away from fossil fuels is global and has therefore led to a growing demand for resources such as nickel, cobalt, copper, lithium and rare earths, used for the production of technologies capable of produce energy from renewable sources, such as wind turbines and electric vehicles.

Due to the massive deployment of wind and solar technologies needed to meet future energy demands, the consumption of these materials is expected to increase significantly over the coming decades. Under current ‘decarbonisation’ scenarios, the EU’s transition, for example, to green energy technologies could be jeopardized by weak future security of supply of various materials.

The strong demand for raw materials marks a change in geopolitics, from a focus on hydrocarbons. And this leads to a focus on materials for the ecological transition. The world, from a geopolitical point of view, will be more and more divided. And this between those who have and those who do not have the materials necessary for the transition.

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Europe: Building new wind turbines will cost more