The Wind is Being Taken Out of the Sails of Big Wind Companies

by Trevor Machmer on November 10, 2017 - 3:18pm

The Wind is Being Taken Out of the Sails of Big Wind Companies

 

Wind energy has often been thought of as a logical and sustainable green energy source with the power to mitigate humanities current reliance on fossil fuels. However, Anna Hirtenstein form Bloomberg Businessweek has found that recently global market shares for some of the world’s biggest suppliers of wind farms have been taking serious losses in the stock market. Vestas Wind Systems A/S is a Danish company which is the world’s largest provider of wind turbine blades. Vestas has seen a loss of approximately 1/5th of its market value over the last year and this has been attributed to increased competition in the industry.

 As profits from sales decrease, skeptics in the energy industry continue to question the profitability of renewable. The formerly niche industry can no longer control market prices as incoming Chinese companies are driving the cost of building wind turbines down with mass production and cheaper labour costs. The growing push for countries to meet their Paris agreement goals with a growing number of wind farms being implemented. Although, this doesn’t result in booming profits for wind energy producers as completion for contracts continue to sky rocket while making fewer returns per turbine.

Vestas has been making wind turbines since 1979 which is the same approximate time Shell and Exxon Mobil started to dip their toes into green energy. The margin of profits have been so tight for these big businesses at such a scale they do not see for the oil industry so naturally they focus on the oil industry while supporting green skeptics to promote their profits. Vestas is joined by Siemens who had to cut 6000 jobs and General Electric whose shares have dropped 36% this year. With the Republican government openly criticizing wind energy, the future of wind turbine production is up in the air.

            The market for wind turbines are a strong example of neoliberalism environmental management. Although there are some incentives and subsidies for the production of green energy, as the systems are more and more adopted these incentives are being decreased and fewer and far between in many countries, especially the U.S. This demonstrates the retreatment of state policies as they take themselves more out of the equation of wind turbine management and hand over responsibilities to the markets and companies.

                That leads further into the second reason that this represents neoliberalism environmental management which is the belief that market based solutions will be the central basis for management. Although at first the government played a large role in the governance of wind turbine systems, their role is continually diminished as the market has become the main organization of social, economic and political decisions in regards to wind energy adaptation.

            Lastly, this represents neoliberalism environmental management based on companies looking to take wind and harvest it for its economic benefits. Wind is a part of nature, ecosystems and the environment and big wind are trying to use this source as a commodity to create profits to sustain a business. This article provides an example of what can happen as neoliberalism continues under increased competition. The commodity that big companies are looking to exploit can become less and less profitable until equilibrium is reached where only companies with the lowest amount of costs can sustain their business and maintain worthwhile profits.

https://www.bloomberg.com/news/articles/2017-11-09/wind-energy-feels-the...