The State of the European Wind Energy Supply Chain A «what-would-it-take» analysis of the European supply chain’s ability to support ambitious capacity targets towards 2030 A Rystad Energy report in cooperation with WindEurope April 2023 Appendix About this report Contacts This report has been produced by Rystad Energy in cooperation with WindEurope. It is focused on Europe’s wind supply chain and its ability to support ambitious capacity targets for 2030. The outset of the report is based on WindEurope’s capacity outlook for wind power in Europe in itsAlexander “2030 Targets Dobrowen Fløtre Scenario” presented in the “Wind energy in Europe 2022 – VP & Head of Offshore Statistics and the outlook for 2023-2027” report published in Wind Research, Rystad Energy February 2023. alexander.flotre@rystadenergy.com Philip Cole Director of Industrial Affairs Phil.Cole@windeurope.org Using this capacity outlook as an exogenous factor, Rystad Energy has applied its models and industry knowledge to estimate the resulting demand for components, services and materials along the value chain towards 2030. Through extensive research on the current and announced supply capacities, Rystad Energy aims to identify potential supply chain risks and bottlenecks as well as assess the Glenn Buchan urgency of the necessary expansions. As such, all analysis in Partnerif & Commercial this report has been done by Rystad Energy, not explicitly Director EMEA, Rystad Energy mentioned otherwise. glenn.buchan@rystadenergy.com Rystad Energy has also contributed to the background material in this report, describing the current status of the European wind market and its supply chain, in addition to describing the components and materials that are essential for the wind industry. Based on the findings in this report, WindEurope has provided its policy recommendations. Joachim Kjendlie VP & Head of Copenhagen Office, Rystad Energy joachim.kjendlie@rystadenergy.com 2 2 55 Rystad Rystad EnergyEnergy – The State the European Wind Energy SupplySupply Chain –Chain April –2023 – TheofState of the European Wind Energy April 2023 d Energy d Energy rgy Foreword Europe’s energy mix is set to see a significant However, focus has now been shifted towards the transformation towards 2030 as the climate emergency supply chain’s ability to support such a rapid ramp-up in and the energy crisis in the wake of Russia’s invasion of activity levels. Moreover, European energy Ukraine are pressuring the region’s ability to secure independence has broadened to include the supply reliable, affordable, and clean energy supply – a chain and critical raw materials, which adds to the challenge set to continue for the years to come. challenge – not only will activity levels spike to new Philip Cole heights, but the growing demand should primarily be The energy transition initiatives in Europe were met by domestic supply, and not an increase in imports. Director of Industrial Affairs accelerated during the Covid-19 pandemic, as means of rebooting economies while simultaneouslyPhil.Cole@windeurope.org taking steps For the European wind supply chain, the challenge may towards reaching climate targets. As the markets seem too large to handle. Wind turbine manufacturers gradually recovered post-pandemic from high have reported low margins and poor financial results for inflationary pressure, Russia’s invasion of Ukraine in several years, along with many other companies along February 2022 shifted the focus of European policy the value chain. Also, the more established onshore makers from energy transition to energy security. wind market in Europe needs to grow to reach European ambitions, while the younger offshore wind Policy makers responded to the need to reduce industry will see activity accelerate this decade. dependency on Russian gas by increasing domestic supply, building new import terminals for LNG to shift For offshore wind, cost reductions observed over the import routes, and significantly lifting renewable past 5-10 years have been driven by the rapid targets. For the latter, wind energy in Europe was development in turbine sizes. Larger turbines improve identified as a key energy source required to reach total lifecycle economics, and developers’ natural European renewable capacity ambitions. The affinity towards the largest models in the market led to REPowerEU plan was laid out last year, which a race between OEMs to provide the biggest and most WindEurope co