RWE: Supply chain problems driving up offshore wind development costs may persist until the end of the decade

The wind industry will face major challenges in the coming years, according to RWE CEO Markus Krebber. Rising costs of building wind farms and supply chain problems could threaten the economics and delivery of many projects, potentially leading to climate targets being missed.

The challenges of rapidly growing ambitions

According to Krebber, supply chains in the wind industry are currently under considerable strain. One reason is rapidly growing climate ambitions, accompanied by higher investment in renewable energy sources. But the wind industry is struggling to keep pace with the rapid growth in ambitions, further amplified by the war in Ukraine.

In addition to rising costs for investors and limited capacity among turbine suppliers, problems can also be found with the technology itself. Siemens Energy AG recently announced technical problems with turbines made by Gamesa. The company's shares subsequently fell by more than 40%.

The problems are linked in particular to the rapidly increasing capacity of wind turbines in recent years, as suppliers competed to bring higher-capacity turbines to market. Their design or quality shortcomings are now beginning to emerge.