The installed capacity of scenery has dropped sharply! Europe's Energy Development Is Not Capable

Rising costs and supply chain shortages are eroding Europe's renewable energy targets

After the Russian-Ukrainian war broke out, the energy crisis in Europe intensified. In order to get rid of the smog of the crisis as soon as possible, Europe hopes to vigorously develop renewable energy in the short term.

European Commission President Ursula von der Leyen recently highlighted this need, telling a conference that the deployment of renewable energy is "not only good for the climate, but also good for our independence". She explicitly added that the use of "fossil fuels as weapons" by Russian President Vladimir Putin must be opposed.

But disorganized supply chains and rising costs of key raw materials are slowing the deployment of wind and solar power, which is most needed across Europe - threatening the continent's ability to meet ambitious growth targets for its renewable energy sector.

Cost inflation, supply chain disruptions and Covid-related lockdowns" are undermining the sector's growth, even as the energy crisis has highlighted the importance of wind energy both in addressing electricity demand and securing energy supplies.

Costs for key components in the wind and solar industries have risen sharply this year - part of a broader rise in commodity costs following Russia's invasion of Ukraine. For example, the price of polysilicon, a key input for solar panels, has tripled since 2021, according to the International Energy Agency, largely because of a slowdown in production in China, which remains in place with strict Covid-19 restrictions. limit.

Prices of steel and aluminum, also crucial to renewable energy projects, have risen by 70% and 40%, respectively, the International Energy Agency said.

Those soaring material prices, along with more expensive shipping and financing, have pushed up the cost of wind turbines and solar panels by10% to 20% this year, according to the IEA. The downward cost trend driving the rapid growth of renewable energy has come to an abrupt end

Siemens Gamesa was the world's third largest manufacturer of newly installed wind power last year. However, the report shows that it lost 1.2 billion euros in Q3 as of June this year, 233% higher than the loss in the same period last year. It also announced it would cut 2,900 jobs, or 10% of its global workforce.

GE Renewable Energy also recently announced job cuts, while Vestas warned that its revenue would be significantly lower than previously expected.

However, European policymakers have been raising their renewable energy targets as part of a broader reflection on energy security in the region in the wake of the Russo-Ukrainian war. Russia subsequently cut gas deliveries to the continent as EU member states imposed economic sanctions on Russia, exposing Europe's heavy reliance on Russian fossil fuels.

The European Union's Restarting the European Union (REPowerEU), launched in May following the outbreak of the Russo-Ukraine war, raised the target for renewable energy in the electricity mix from 32% of total electricity generation to 45% by 2030. This will require a rapid ramp-up of wind and solar projects.

But instead of accelerating, new orders for wind capacity fell sharply, leading trade body WindEurope to warn of a possible slowdown in deployment.

It found that new wind turbine orders totaled just 2GW in the third quarter of this year, down 36% compared to the same period last year.

The two full quarters since February saw the slowest growth in new turbine orders since 2017, according to an analysis of WindEurope data.

This year's total orders accounted for just 7.7GW of electricity, well below the 39GW of annual new wind capacity needed to meet the EU's 2030 target of 510GW. WindEurope said this was "a far cry from what Europe needs to achieve its energy and climate goals".

As well as keeping growth targets out of reach, supply chain and financial issues have raised concerns that Europe's renewable energy sector could become overly reliant on Chinese manufacturers and suppliers - a reflection of the continent's attempt to break its reliance on Russian fossil fuels .

A report this summer by the International Energy Agency found that the world relies on China for the supply of more than 80 percent of its solar panel needs, and warned that dependence could rise to 95 percent by 2025 for some components.

The wind industry in Europe could end up in the same situation, and the government should provide more support to the industry, including quotas for European manufacturing supplies.

Chinese manufacturers accounted for 53.5 percent of new global wind power installations last year, up from 36.6 percent in 2018, according to the Global Wind Energy Council. Eickholt believes that the wind turbine industry is now "definitely at risk" like the solar panel industry, with Chinese manufacturers dominating the market and supply chain.

Soaring electricity costs due to the Russia-Ukraine war could increase the risk of dependence on China - further undermining Europe's efforts to build an indigenous clean energy supply chain.

Not only do high electricity prices pose a major threat to Europe's decarbonization efforts, but they could also lead to increased reliance on overseas manufacturing

“Creating reliable domestic low-carbon supply chains is vital if the continent is to stick to its goals. However, as things stand, this is in serious jeopardy.