An optimistic perspective on the wind energy market and the Copenhagen Climate Change Conference
Peter Brun Senior Vice-President Government Relations, Vestas Wind Systems
From a modest blacksmith shop set up in Lem, Denmark by H. S. Hansen in 1898, Vestijysk Stalteknit has matured through many growing pains to become the largest Aeolian – windmill – manufacture in the world.
Vestas Wind Systems A/S, as the company is now known, has over 20,000 employees worldwide and boasts sales of over US$ 8.5 billion. Its sales growth in 2008 was 18% and its income of over 720 million dollars represented a 68.2% increase over the preceding period. Vestas has over 30,000 installations throughout Europe, the United States, Australia and China, among many other locations.
This is impressive navigating for a company that had to declare bankruptcy at the end of 1986 because of fickle legislation in the US that completely cut out subsidies and tax benefits of renewably generated electricity.
New management repositioned Vestas as a wind turbine specialist. It is hard to imagine that this world leader had to cut the company payroll to only 60 employees.
Peter Brun, Senior Vice-President Government Relations for Vestas Wind Systems and the Vestas representative at the recent United Nations 15th Conference on Climate Change held in Copenhagen, discussed his perspective on the industry and the meeting of 192 countries with Swiss Style.
A practical approach
“Renewable energy, and wind specifically, is very much a practical approach, a good return on investment,” Brun says. “It is about a government’s future energy mix and strategy and taking the right path. They receive a sustainable and reliable energy source for the next twenty years. This industry will generate green jobs and is a contribution to its total energy supplies and security. Renewable energy is not just a one-off, it’s a win-win-win situation.”
With regard to the Copenhagen Conference, he comments that, “We had hoped for a stronger outcome in Copenhagen. On the other hand, we were very realistic before coming to Copenhagen and that the prospect for a conclusive agreement coming out of that particular meeting looked pretty bad.”
Brun goes on to note, however, that what they had expected at the “international” level from this meeting was confirmation that the positive development of what Vestas was experiencing at the national level, such as in places like the United States, Europe, China, Australia and other markets throughout the world, would be continued “despite the fact that we do not have a multinational agreement.”
An optimistic view
He adds that, “I see a shift of emphasis, as a matter of fact, maybe a little away from the global level to the national or regional level in the next stage to come. I would expect governments and politicians throughout the world would be very keen to let their populations know that they were doing the right things, putting in place the right mechanisms, investments and technologies. That is the reason why I take a rather optimistic view in the developments that we will be seeing in the wind power industry over the next year or so. I’m also hoping we’ll be seeing strong multilateral agreements in the longer term; next year or maybe in one and a half year’s time.”
When asked why he thought it was so difficult for the world to come to general agreement about such a basic issue as clean energy, Brun responds, “I think the world is basically in a pretty difficult situation on many accounts caused by the global financial crisis and recession in some parts of the world. One approach would have been to enact new stimulus into the world economy with a green stimulus on national level with strong peer guidance from the international level. But of course there is always a discussion of who pays the bill, discussion between the North and the South and the UN system. I think this meeting was a replay of those classic issues again but with an interesting East-West dimension between China and the United States, which played into the negotiations in a way one would not have hoped. There is a need to come back to the negotiation table to find the right solutions because these global challenges on climate change cannot only be found on a unilateral national level but need international agreement.”
In Brun’s opinion, “Of course from our perspective it should not be that difficult to do the right thing about climate change because we believe we do have available clean technologies and the challenge is simply a question of securing a fast and stable scaling of those modern energy solutions. However, we realize that we are now talking big politics and therefore I think we try to stay pretty realistic with the challenges that we are facing today. Of course it is a complex political issue but one should not overestimate the complexity. If we do, we will not see the forest for the trees.”
According to the website Answer.com, “Despite a downturn in the global wind turbine market and a generalized economic slowdown, Vestas’ long-standing expertise and market-leading position enabled it to solidify its international standing.”
“Today, wind accounts for 1.5% of global electricity consumption, a minor share of the overall picture. However, if wind power generation grows at the most conservative estimates of 14–16% per year, then our industry will account for 10% of global electricity production by 2020.”
Asked how Vestas is positioned as a global energy producer, specifically as concerns wind power generation, Brun comfortably answered with firm facts and figures: “Today, wind accounts for 1.5% of global electricity consumption, a minor share of the overall picture. However, if wind power generation grows at the most conservative estimates of 14–16% per year, then our industry will account for 10% of global electricity production by 2020,” he comments.
“China is coming on very rapidly. They have a growth rate of over 100% every year in terms of installed wind capacity and have taken a very strong consistent regulatory approach toward growing the clean energy industry. The United States and Canada have barely started their consistent regulatory approach but the new US Administration is trying hard to improve the situation. There is huge potential in Latin America, Africa and other parts of Asia as well. Wind for green power generation is mostly developed in the European Union, especially in three countries: Denmark, Germany and Spain. All the rest is basically unexploited and is waiting for being captured,” Brun states.
The potential is there
And how does Brun see the potential? “The potential is huge. I could cite many numbers in terms of the percentage of global electricity consumption but these are theoretical academic numbers. Wind power fully exploited could deliver the world’s power needs many times. There is, however, general agreement about the potential of wind power, especially in North America, Latin America, parts of Africa and Asia, regions where wind has only started growing and there is great potential. Partly why the Chinese are driving this industry so strategically forward these days is because they can see, apart from solving their own energy problems, the possibility of a lot of export to the rest of the world in the coming years. The latest figure is that there are over 70 competitors coming out of China and the number is growing every year,” he says.
However, he adds confidently, “But we are used to strong competition.”
Article by T. R. Priest
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