WEBVTT 1 00:00:00.560 --> 00:00:07.160 You are listening to Redefining Energy. Your co hosts from Berlin Gerard Read and 2 00:00:07.280 --> 00:00:11.720 from London Laurent Sege. Today on Redefining Energy, we're going to talk about 3 00:00:11.759 --> 00:00:17.600 the state of the wind industry. Oooo. That's going to be a spicy 4 00:00:17.679 --> 00:00:21.039 one because there's a lot of things happening. Yeah, yeah, there isn't 5 00:00:21.079 --> 00:00:25.719 it absolutely good bad change. It's all happening in wind. It's not a 6 00:00:25.800 --> 00:00:29.239 dud like solar. It's just one way up and there's a lot of bumps 7 00:00:29.280 --> 00:00:32.320 on the road that we need to discuss about. So mhich are short terms, 8 00:00:32.359 --> 00:00:35.960 so hich our long term. But first of what from my partner, 9 00:00:36.560 --> 00:00:41.880 this podcast is powered by Expo, an international leader in providing sustainable energy solutions 10 00:00:41.920 --> 00:00:47.159 for the future in an ordicx AXPO has been a pioneer within trading and origination 11 00:00:47.280 --> 00:00:51.640 services for the last twenty years and we're very happy to have a partnership on 12 00:00:51.679 --> 00:00:57.079 this episode with When Your Op, the Association of Win in Your Op and 13 00:00:57.240 --> 00:01:00.240 Ron. The big question I have to ask myself is have we seen peak 14 00:01:00.240 --> 00:01:04.439 woin Yeah, peakcoin. Yeah, that's an interesting proposal and if you look 15 00:01:04.439 --> 00:01:11.280 at the numbers in twenty twenty twenty twenty one, one hundred geek were installed 16 00:01:11.359 --> 00:01:15.200 in the world, and in two twenty two the market shrank down to seventy 17 00:01:15.319 --> 00:01:19.840 seven gig awards. Do I understand peakquin like it's not going to grow, 18 00:01:21.120 --> 00:01:23.640 say from one hundred gig to three hundred gig, and how do you see 19 00:01:23.640 --> 00:01:26.840 it? Exactly? That's what I mean by it. It's not to say 20 00:01:26.879 --> 00:01:33.239 that we're going to start sort of building wind. It's just there's going to 21 00:01:33.280 --> 00:01:37.879 be no growth in installations from ear to year. And that's the way I'm 22 00:01:37.920 --> 00:01:42.079 thinking about it. Anyway, I think we'll talk more in the conclusion part. 23 00:01:42.680 --> 00:01:45.000 If you look at the big pictures, it's all over the place. 24 00:01:45.760 --> 00:01:51.120 We have struggling O and ms Vesta shares the down twenty five percent of to 25 00:01:51.239 --> 00:01:55.239 date, Siemens energy down thirty percent of to date, with problem with local 26 00:01:55.319 --> 00:02:00.760 population, with slow reconnection, we get supply chain inflation and guys like Osted 27 00:02:00.840 --> 00:02:06.480 get squeeze or the Hostedia to date is minus forty percent, boat shouctions right 28 00:02:06.640 --> 00:02:09.280 downs, rising interest rates, and on and on and on and on and 29 00:02:09.319 --> 00:02:13.400 on. Yeah, well, listen, I think we need to bring an 30 00:02:13.400 --> 00:02:15.639 expert on to talk about this. Yeah, and the expert we have. 31 00:02:15.759 --> 00:02:23.800 We're very happy to have Rose Marie Barnes Rosie and she's an Australian engineer with 32 00:02:23.879 --> 00:02:29.560 a PhD in composite materials, two decades of experience in the winning energy and 33 00:02:29.639 --> 00:02:35.039 now she's quite known because she has a very famous YouTube channel called Engineering with 34 00:02:35.199 --> 00:02:38.919 Rosie. She's a good friend of ours and she knows everything that needs to 35 00:02:38.960 --> 00:02:45.000 be known in wind energy. Let's bring around the show Rosie. Finally, 36 00:02:45.199 --> 00:02:47.280 welcome to the show. Thanks so much for having me on. Good to 37 00:02:47.280 --> 00:02:51.120 see you. Let me just kick off, but we really want to talk 38 00:02:51.159 --> 00:02:54.599 about the wind industry and we've seen a lot of negativity this year. And 39 00:02:54.759 --> 00:02:59.120 listen, you've been in the industry longer than we have. You know better 40 00:02:59.199 --> 00:03:00.960 than anyone what's you're thinking, what's going on on wind and how do you 41 00:03:00.960 --> 00:03:06.199 see the future. Where we're at now is probably the result of a squeeze 42 00:03:06.240 --> 00:03:10.599 that actually happened maybe about five years ago. For most of the history of 43 00:03:10.719 --> 00:03:15.639 the wind industry, we've been gradually increasing the length of wind turbines, blades, 44 00:03:15.800 --> 00:03:20.639 you know, size of wind turbines, heart of towers, and for 45 00:03:20.759 --> 00:03:24.080 decades we just saw every year there would be a slightly longer fiberglass blade than 46 00:03:24.120 --> 00:03:27.240 there was a year before. It basically just looked like, you know, 47 00:03:27.280 --> 00:03:30.080 just scaled up the same blade over and over again for decades, and that's 48 00:03:30.120 --> 00:03:34.960 a really nice way to develop an industry with you know, you learn a 49 00:03:34.960 --> 00:03:38.520 lot, you don't change too much from turbine to turbine. And then we 50 00:03:38.599 --> 00:03:44.199 got to a point where blade lengths started getting longer faster, for one thing. 51 00:03:44.240 --> 00:03:46.439 And secondly, we kind of reached a point where it was pretty hard 52 00:03:46.439 --> 00:03:50.800 to just keep on making blades in the exact same way as they were. 53 00:03:51.159 --> 00:03:55.319 And that happened at the same time that prices really started squeezing down, and 54 00:03:55.360 --> 00:04:00.560 it definitely felt like a squeeze when you're working in a gineering department of winter 55 00:04:00.599 --> 00:04:03.240 By manufacturer. Yeah, so all of that happening at once meant that there's 56 00:04:03.240 --> 00:04:08.879 a lot of pressure to bring out new technologies fast to enable longer blade lengths 57 00:04:08.919 --> 00:04:13.639 and a few other enabling technologies. And then it takes a little while for 58 00:04:14.120 --> 00:04:19.319 too fast development to play out in terms of increased warranty claims. And it's 59 00:04:19.360 --> 00:04:24.879 not so unusual everybody that's worked for a winter By manufacturer for a long time 60 00:04:25.120 --> 00:04:28.720 will tell you that you go through these cycles every manufacturer, you have a 61 00:04:28.800 --> 00:04:33.199 period of innovation, feeling amongst engineers that you're moving too fast, and you 62 00:04:33.240 --> 00:04:38.600 know, there's this conflict always between the business functions and the engineering functions, 63 00:04:38.680 --> 00:04:42.040 or engineers want you to slow down and business guys like, no, we 64 00:04:42.079 --> 00:04:45.199 need to speed up, otherwise we won't make any sales, and then get 65 00:04:45.240 --> 00:04:48.319 some warranty claims. Sometimes they're big and company might not be able to weather 66 00:04:48.399 --> 00:04:53.040 it, but usually come back from it, tighten down on quality, slow 67 00:04:53.079 --> 00:04:56.959 down a little bit, and you eventually you're stronger for it because you've got 68 00:04:56.959 --> 00:05:00.279 this the results of this innovation, and the technology has become reliable. But 69 00:05:00.319 --> 00:05:03.480 what's different this time is that we see all of the manufacturers went through this 70 00:05:03.680 --> 00:05:08.959 at the same time, and so we do see a whole lot of innovation 71 00:05:09.360 --> 00:05:13.439 in wind over the last decade, but we are right now at the point 72 00:05:13.480 --> 00:05:16.959 where we're also seeing a whole lot of defects and some of them are proving 73 00:05:17.000 --> 00:05:20.079 to be really costly. Can I just have a quick follow on question. 74 00:05:20.120 --> 00:05:27.560 There is this because all the turbine manufacturers are was sourced to basically the same 75 00:05:27.759 --> 00:05:30.839 manufacturers of you know, whether it's blades or whatever it is. Is that 76 00:05:30.920 --> 00:05:33.560 what happened? Why do they all have the same issue. It's not exactly 77 00:05:33.560 --> 00:05:38.120 the same issues, And I don't think it's from more outsourcing. Most manufacturers 78 00:05:38.120 --> 00:05:42.879 will both make their own blade components and have a second source from a supplier 79 00:05:42.920 --> 00:05:46.399 like LM Windpower, who I used to work for. And it's not the 80 00:05:46.519 --> 00:05:50.480 exact same problem that all the manufacturers experience, but it's the same kinds of 81 00:05:50.519 --> 00:05:55.480 problems because they all face the same kinds of challenges and so came up with 82 00:05:55.519 --> 00:06:00.959 similar solutions to them. As you make a blade longer than there's changes that 83 00:06:00.000 --> 00:06:04.040 you need to make to the structure and the materials and the manufacturing process. 84 00:06:04.240 --> 00:06:09.439 Lightning protection systems, that's a big one they had to change to accommodate these 85 00:06:09.519 --> 00:06:13.879 longer lengths that developers were demanding. Yeah, when you have a new technology, 86 00:06:14.319 --> 00:06:17.000 the early years of its rollout is the time when you see problems with 87 00:06:17.160 --> 00:06:23.240 it. You can't really have innovation without that. The ideal weighted it from 88 00:06:23.279 --> 00:06:26.160 an engineering point of view, would be to go so slowly that you would 89 00:06:26.199 --> 00:06:29.800 only have a few turbines out there with this technology by the time you notice 90 00:06:29.800 --> 00:06:33.920 the problems but yeah, I mean the sales process and business constraints mean that 91 00:06:33.959 --> 00:06:38.360 people actually want to move a lot faster than that. Well, I think 92 00:06:38.399 --> 00:06:42.439 you're a bit too kind, because the way I see it is the winddustry 93 00:06:42.560 --> 00:06:48.319 got engulfed in the narrative of the solar industry where ATI going down ten percent 94 00:06:48.360 --> 00:06:54.759 Parana, and I guess the developers who are doing wind and solar were enjoying 95 00:06:54.839 --> 00:06:58.639 a wonderful ride with solar and basically coming back to the wind and say, 96 00:06:58.680 --> 00:07:03.240 guys, you need to puning up, except that moslow applies to semiconnectors and 97 00:07:03.480 --> 00:07:09.879 to solar, but it doesn't apply to wind, which is mechanical Or am 98 00:07:09.959 --> 00:07:15.319 I seeing it wrong? It's probably part of it. Definitely. People maybe 99 00:07:15.360 --> 00:07:18.439 still today, but a lot more my decade ago, everybody was talking about 100 00:07:18.600 --> 00:07:21.639 the l cooe of solar versus wind, because you know, in the early 101 00:07:21.720 --> 00:07:26.399 history of wind, wind was just way cheaper, and then solar started off 102 00:07:26.399 --> 00:07:29.600 more expensive, but you know, its price was just reducing so fast, 103 00:07:29.800 --> 00:07:31.399 and there used to be a lot of talk about, you know, who's 104 00:07:31.439 --> 00:07:34.800 going to win out of wind and solar. But I do think that that's 105 00:07:35.040 --> 00:07:41.560 really that kind of comparison belongs in the past it's the first phase of the 106 00:07:41.680 --> 00:07:46.120 energy transition, and I think it's that relevant now because you're not comparing if 107 00:07:46.120 --> 00:07:49.480 you've got a high level of renewables in your grid, you can't just keep 108 00:07:49.519 --> 00:07:54.639 on adding solar until you get to one hundred percent of your electricity supply. 109 00:07:54.879 --> 00:08:00.759 That way, you need to add wind storage. So in the the mid 110 00:08:00.800 --> 00:08:05.199 part of the energy transition, wind is really competing against solar plus a short 111 00:08:05.279 --> 00:08:11.160 duration battery, and then in the later stages of the energy transition, it's 112 00:08:11.279 --> 00:08:15.959 going to be competing against some of the really hard, difficult technologies like long 113 00:08:16.040 --> 00:08:20.519 duration energy storage or energy imports as well. Because you think about like floating 114 00:08:20.519 --> 00:08:26.319 offshore wind, it's way more expensive than onshore wind. It's way more expensive 115 00:08:26.360 --> 00:08:28.639 than solar. Why would you install it. But if you look at anybody 116 00:08:28.680 --> 00:08:33.200 who's actually considering floating off your wind, they don't have the option to have 117 00:08:33.240 --> 00:08:37.360 a whole lot of solar power to run their electricity grid. Places like Japan 118 00:08:37.480 --> 00:08:41.320 who don't have the option even for a whole lot of onshore wind, they 119 00:08:41.399 --> 00:08:46.840 might have floating off your wind, or they might have geothermal, or they 120 00:08:46.919 --> 00:08:50.720 might have to import liquid hydrogen like they are actually doing, so I think 121 00:08:50.759 --> 00:08:54.759 that that's the comparison that is the right comparison to make with wind. At 122 00:08:54.759 --> 00:09:01.120 some point, Rosie, if we go a bit deeper into the technical problem 123 00:09:01.240 --> 00:09:07.080 that you've depicted, there was a few weeks ago the announcement that Siemens would 124 00:09:07.120 --> 00:09:11.759 pass four billion or something right offone to our buying. So have you been 125 00:09:11.759 --> 00:09:16.799 able to analyze a bit what they have announced and what's the issue here and 126 00:09:16.960 --> 00:09:20.799 do you foresee that other or and them would face the same type of problems. 127 00:09:22.320 --> 00:09:26.559 We've been following this issue in the wind energy podcast that I co host 128 00:09:26.639 --> 00:09:31.440 with a couple of other guys, Uptime Wind Energy Podcast, And when it 129 00:09:31.519 --> 00:09:33.639 started out, they said, you know, I've got a little bit of 130 00:09:33.679 --> 00:09:37.799 an issue. It's going to cost about a billion, and everyone's like, 131 00:09:37.840 --> 00:09:41.039 WHOA a billion, that's a lot. And we've seen it grow and grow 132 00:09:41.039 --> 00:09:43.399 and grow, and I think it's about five billion they're talking about now. 133 00:09:43.840 --> 00:09:50.240 And I've seen up to thirty percent of the blades affected in the recent on 134 00:09:50.320 --> 00:09:56.000 shore sales. Basically, they've identified two different technical problems. One is with 135 00:09:56.080 --> 00:09:58.720 the blades and then yeah, in the bearings as well. They've seen particles 136 00:09:58.720 --> 00:10:05.159 in the beings. That's the explanations that they've given. Maybe I can bring 137 00:10:05.200 --> 00:10:09.519 it back to more generally about like what kinds of defects that we see in 138 00:10:09.519 --> 00:10:13.159 in wind turbines and how they have gotten there from this trend that I was 139 00:10:13.200 --> 00:10:18.200 talking about, blades getting longer and getting longer fast, and kind of also, 140 00:10:18.480 --> 00:10:22.039 we've reached a point where it was pretty hard to just stretch out a 141 00:10:22.039 --> 00:10:26.159 fiberglass blade. Even further, some of the consequences of the changes in blade 142 00:10:26.159 --> 00:10:31.919 designs. As blades have gotten longer, you need to make the fiberglass thicker. 143 00:10:31.279 --> 00:10:37.240 So composite materials when they cure, they generate heat, and so you 144 00:10:37.360 --> 00:10:41.039 generally like to keep your laminatees nice and thin. But as they have gotten 145 00:10:41.039 --> 00:10:43.639 really big, then they've gotten quite thick in the root region of the blade, 146 00:10:43.679 --> 00:10:46.559 the part that attaches to the hub. That can cause a lot of 147 00:10:46.600 --> 00:10:52.159 problems with stresses and things like that. They also they're very flexible wind turbine 148 00:10:52.159 --> 00:10:54.840 blades. They can bend up to ten percent of their length towards the tower. 149 00:10:54.960 --> 00:10:58.120 And so as the blades get longer, you need to take more care 150 00:10:58.159 --> 00:11:03.840 to make them stiffer. So people have started adding carbon fiber often and that 151 00:11:03.919 --> 00:11:09.759 introduces several problems manufacturing challenges that need to be overcome. So one of those 152 00:11:09.879 --> 00:11:11.759 challenges is just you know, any time that you introduce a new material, 153 00:11:13.120 --> 00:11:16.080 and it's got very different structural properties to fiberglass, so it behaves in a 154 00:11:16.080 --> 00:11:20.759 different way. So you've got decades of history of how fiberglass blades behave and 155 00:11:20.840 --> 00:11:24.120 know exactly you know what to look out for when you're designing a new one. 156 00:11:24.279 --> 00:11:28.240 But we didn't have those decades of history when we introduced carbon fiber. 157 00:11:28.679 --> 00:11:31.600 There were new manufacturing processes needed as well, and every time you change a 158 00:11:31.639 --> 00:11:35.919 manufacturing process, it's a new chance for someone to do it wrong. The 159 00:11:35.039 --> 00:11:41.559 wind turbine blade manufacturing is still really really manual, so you need to design 160 00:11:41.559 --> 00:11:45.799 your manufacturing process so that any way that a human could get it wrong, 161 00:11:46.080 --> 00:11:48.440 you need to have thought about that and made sure that they can't or that 162 00:11:48.480 --> 00:11:52.840 it won't have a big effect. And then the other big thing that adding 163 00:11:52.000 --> 00:11:56.039 that longer blades and the need to add carbon fiber has done is changed a 164 00:11:56.080 --> 00:12:01.080 lot the way that lightning will damage your blade when it strikes, and so 165 00:12:01.240 --> 00:12:05.799 lightning protection systems have had to be totally redesigned. It used to be really 166 00:12:05.799 --> 00:12:09.080 similar to the way that you would put lightning protection on a building. You 167 00:12:09.200 --> 00:12:11.480 just kind of put a big hunk of metal at the end of the blade, 168 00:12:11.879 --> 00:12:15.960 make it really attractive place for the lightning to hit, and then it's 169 00:12:15.960 --> 00:12:18.600 attached by a big thick cable all the way down the turbine into the ground 170 00:12:18.720 --> 00:12:24.320 or into the ocean. But when you add carbon fiber, that's obviously conductive 171 00:12:24.399 --> 00:12:26.639 and so lightning tends to want to strike that as well, So you need 172 00:12:26.679 --> 00:12:31.840 to put all these extra receptors over the blade, maybe add some copper mash 173 00:12:31.879 --> 00:12:35.320 to protect the carbon fiber, and all of these things just new ways to 174 00:12:35.360 --> 00:12:39.559 fail, and we have seen a lot of those failures. Do you forcee 175 00:12:39.639 --> 00:12:46.000 similar problems with other nms or is it's just a Semens problem. I've seen 176 00:12:46.120 --> 00:12:50.919 other ones. TPI, who is a manufacturer, they do build to print 177 00:12:50.000 --> 00:12:54.879 for a lot of different manufacturers, so you don't see any TPI turbines out 178 00:12:54.919 --> 00:12:58.080 there, but a lot of other manufacturers have TPI blades on their turbines. 179 00:12:58.080 --> 00:13:03.639 They've got some issues as well. I haven't seen details about that. But 180 00:13:03.679 --> 00:13:07.919 the interesting thing about these issues is before it got announced, you know, 181 00:13:07.960 --> 00:13:11.360 a lot of the work that I do in Australia is helping win farm owners 182 00:13:11.639 --> 00:13:16.360 who experiencing blade defects on their blades, and you know, I work with 183 00:13:16.399 --> 00:13:18.639 them and with the manufacturer to get to the bottom of why and make sure 184 00:13:18.679 --> 00:13:22.440 that there's a good solution and they can be confident that there's not going to 185 00:13:22.440 --> 00:13:26.879 be more problems. And Siemens Gamesa did not stand out as a company that 186 00:13:26.000 --> 00:13:33.440 had particularly more problems than anybody else. I see it from every manufacturer basically, 187 00:13:33.600 --> 00:13:37.960 so personally, I'll be really surprised if Siemens Gamesa are the last company 188 00:13:37.000 --> 00:13:41.879 to experience a problem like this. In some ways, they're probably lucky that 189 00:13:41.000 --> 00:13:48.480 it's onshore turbines that are experiencing these problems, because when you imagine if you 190 00:13:48.519 --> 00:13:52.960 had the same number of turbines offshore with an issue like that, the cost 191 00:13:52.200 --> 00:13:56.840 to repair or replace components offshore is just so dramatically higher because of you know, 192 00:13:58.159 --> 00:14:01.519 access problems. Segue, I wanted to actually talk about offshore wind and 193 00:14:01.559 --> 00:14:05.399 I want to go back to one thing, which was always Varvint who was 194 00:14:05.399 --> 00:14:09.480 the founder of Nicron. He basically said fifteen years ago, he said, 195 00:14:09.480 --> 00:14:13.320 listen, fish don't fly, and that was his reason for not going into 196 00:14:13.360 --> 00:14:16.720 offshore wind because he didn't believe in it. I'd just love to hear your 197 00:14:18.000 --> 00:14:20.399 view because I've seen this Siemens comca issue and you just said it if there's 198 00:14:20.440 --> 00:14:24.279 a similar issue in offshore wind, I mean, the industry is in real 199 00:14:24.320 --> 00:14:28.799 trouble. So offshore wind is actually one technology that I have changed my mind 200 00:14:28.840 --> 00:14:33.360 on completely since earlier in my career, I thought it was just really expensive 201 00:14:33.559 --> 00:14:37.200 and pointless, and to be honest, I wondered whether it was just a 202 00:14:37.240 --> 00:14:41.879 bit of a scam from the offshore oil and gas industry to take research dollars. 203 00:14:41.200 --> 00:14:46.679 But now I can see that it has a lot of potential value moving 204 00:14:46.720 --> 00:14:50.919 into the future. You have to compare what is the alternative renewable energy source 205 00:14:52.000 --> 00:14:54.039 that would be used if it wasn't offshore wind, and look at the cost 206 00:14:54.039 --> 00:14:58.120 of that. Offshore wind is never competing against solar. The places that are 207 00:14:58.320 --> 00:15:03.399 rolling out offshore wind, it's either because their land constrained that they don't have 208 00:15:03.399 --> 00:15:05.480 space for more solar, or you know, don't have a good solar resource. 209 00:15:05.559 --> 00:15:09.240 They probably also don't have space for more onshore wind. And then the 210 00:15:09.360 --> 00:15:15.480 other factor is just the generation profile of offshore wind. A lot of cases 211 00:15:16.120 --> 00:15:22.080 you'll see or higher capacity factors for offshore wind, but also generation closer to 212 00:15:22.120 --> 00:15:24.159 the time when people want to use it. So I know in their projects 213 00:15:24.159 --> 00:15:28.679 that they're looking at developing in Australia, their wind speeds are faster in the 214 00:15:28.840 --> 00:15:33.759 afternoons and evenings, so as solar is winding down, people are coming home 215 00:15:33.799 --> 00:15:37.600 and cooking dinner, plugging in their electric cars. Probably that's when prices spike 216 00:15:37.759 --> 00:15:41.679 really high, and so in that sense they should get a lot higher value 217 00:15:41.679 --> 00:15:48.159 for those resources. What we've seen in the past months or so are offshore 218 00:15:48.600 --> 00:15:52.559 wind developers are struggling with the crisis that they are for greed, so they're 219 00:15:52.559 --> 00:15:56.240 wont auction a few years ago, and now they realized that the prices they 220 00:15:56.360 --> 00:16:02.360 signed in which is two law, actually when they figure out that those supply 221 00:16:02.440 --> 00:16:08.039 chain was getting more expensive and interest rates were getting higher. So we saw 222 00:16:08.360 --> 00:16:14.919 Ppa in New England or East of North America. In the UK, we 223 00:16:15.000 --> 00:16:18.320 saw Vaton Fund who just said, okay, you know those prices, which 224 00:16:18.559 --> 00:16:22.960 doesn't make sense to do it. So do you see those supply chain costs 225 00:16:23.279 --> 00:16:29.399 getting fixed or is the price of off show wind just come too low and 226 00:16:29.480 --> 00:16:33.399 we need to readjust to higher prices. I personally think that it has gone 227 00:16:33.440 --> 00:16:38.399 too low and that we should readjust, and I think most engineers working in 228 00:16:38.440 --> 00:16:41.879 the industry would also feel like that. But maybe it's just because it's a 229 00:16:41.919 --> 00:16:45.679 lot more fun working in an industry where you have money to actually do good 230 00:16:45.759 --> 00:16:52.399 engineering and it's not just constantly about cost out moving faster and cheaper. And 231 00:16:52.440 --> 00:16:56.120 then in terms of the increased costs, it's not just interest rates, it's 232 00:16:56.159 --> 00:17:00.720 also the cost of all of the materials winter Bine is made from. It's 233 00:17:00.759 --> 00:17:06.359 not so dissimilar to construction industry, I think is facing similar problems where they've 234 00:17:06.400 --> 00:17:10.799 sold projects and a fixed cost and then the cost of their materials has gone 235 00:17:10.839 --> 00:17:15.359 up so much in the meantime that they can't deliver on those projects anymore. 236 00:17:15.799 --> 00:17:19.440 Depends I guess on the details of the contracts for how they can get out 237 00:17:19.440 --> 00:17:25.240 of that, but in a lot of cases they're able to stop developing the 238 00:17:25.240 --> 00:17:29.759 project without too much of a penalty. There was a bit of a flurry 239 00:17:29.759 --> 00:17:33.480 of activity with those first New York auctions. Everyone was just stunned by what 240 00:17:33.559 --> 00:17:38.000 the prices that people were prepared to pay for the opportunity to develop those projects, 241 00:17:38.039 --> 00:17:42.279 were I personally think that they missed out on some technical risks as well. 242 00:17:42.279 --> 00:17:47.160 When you have so many wind farms in close proximity, then you are 243 00:17:47.160 --> 00:17:51.000 going to see, you know, the upwind wind farms stealing energy from the 244 00:17:51.000 --> 00:17:53.920 downwind ones, so to speak. And so I don't think that issues like 245 00:17:53.920 --> 00:17:57.640 that were fully understood when people bid for them. But I also wonder if 246 00:17:57.680 --> 00:18:02.960 it was a bit of a to try and get market share, So you 247 00:18:02.960 --> 00:18:07.440 know, maybe they didn't really expect those to be super profitable projects, but 248 00:18:07.680 --> 00:18:11.839 they just wanted the opportunity to get in early and have a track record so 249 00:18:11.880 --> 00:18:15.240 that they would win future auctions where I mean, they're just going to have 250 00:18:15.279 --> 00:18:19.680 to go up higher if we want to come close to meeting the targets that 251 00:18:19.680 --> 00:18:23.400 people have proposed. Rosie, I'd love to hear your view on the whole 252 00:18:23.640 --> 00:18:27.559 Chinese turbine manufacturers. I mean, how do you see their progress in the 253 00:18:27.640 --> 00:18:32.279 last years, how do you see their future? Yeah, so that's definitely 254 00:18:32.279 --> 00:18:36.160 loomed large. And when I was working for a European manufacturer, first of 255 00:18:36.160 --> 00:18:40.079 all, I think everyone saw China is a huge opportunity and then later on 256 00:18:40.200 --> 00:18:45.119 saw them as a huge threat. I don't think that any European manufacturers have 257 00:18:45.200 --> 00:18:48.079 really made a good job of getting into the Chinese market, and now we 258 00:18:48.160 --> 00:18:53.039 do see Chinese turbines a lot more installed in places that the European manufacturers would 259 00:18:53.079 --> 00:18:59.920 have expected to just automatically get those sales. A lot of people would eschew 260 00:19:00.359 --> 00:19:06.319 that Chinese turbines are a lower quality than European or American ones, and I 261 00:19:06.359 --> 00:19:11.920 think that there is still that interpretation from financing and insurance. Probably that is 262 00:19:11.920 --> 00:19:17.240 something that is having a real effect on projects, but when you look at 263 00:19:17.240 --> 00:19:19.640 the data, you don't really see it. I know that you know, 264 00:19:19.720 --> 00:19:25.279 all of the big European American manufacturers all have factories in China, and I 265 00:19:25.359 --> 00:19:29.839 know the manufacturer I was working from. Certainly there was no lower quality coming 266 00:19:29.839 --> 00:19:33.559 out of those factories compared to the other ones. And if you look at 267 00:19:33.599 --> 00:19:40.599 the availability of the turbines from Chinese manufacturers, they're definitely as good as the 268 00:19:40.680 --> 00:19:45.440 industry standard. Usually you'd expect to see in a contract ninety eight percent ish 269 00:19:45.640 --> 00:19:49.160 availability. So don't see big differences there. But what we do see a 270 00:19:49.160 --> 00:19:55.920 big difference is cost and it doesn't quite make sense when you look at it. 271 00:19:56.000 --> 00:20:00.640 So when you develop a new technology, and I have led several projects 272 00:20:00.680 --> 00:20:03.279 to develop new subsystems for wind turbine blades, and part of the process is 273 00:20:03.319 --> 00:20:08.079 that you get together with someone from business development and figure out how much it's 274 00:20:08.119 --> 00:20:11.160 going to cost and how many are going to sell, you know, to 275 00:20:11.160 --> 00:20:14.680 see if you've got a good business case for it. You design your system 276 00:20:14.799 --> 00:20:18.680 and you know how much it's going to cost, and then you will learn 277 00:20:18.920 --> 00:20:23.640 that a Chinese competitor is selling that same product for half or a third of 278 00:20:23.759 --> 00:20:27.640 what you've put it together for. And then you've got to go do the 279 00:20:27.680 --> 00:20:32.720 sourcing department and they'll make a should cost model where they take every single component 280 00:20:32.799 --> 00:20:37.319 in your design and come up with what would this cost if we manufactured it 281 00:20:37.359 --> 00:20:41.599 in China and with the lowest possible price for everything, no brand names, 282 00:20:41.640 --> 00:20:45.680 you know, everything is just spark and basement, and you'll still always see 283 00:20:45.720 --> 00:20:48.680 a huge, a huge delta in what the lowest possible price that you could 284 00:20:48.720 --> 00:20:52.400 expect to pay, even if you just take it for the amount of I 285 00:20:52.400 --> 00:20:55.200 don't know, steel and copper that in a design, you see cheaper prices 286 00:20:55.240 --> 00:20:59.200 out of China. So I guess the assumption is that there's some sort of 287 00:20:59.200 --> 00:21:03.759 subsidy there. But I don't know anybody that really has a good insight for 288 00:21:04.039 --> 00:21:11.279 exactly why Chinese turbines can be so much cheaper than anybody else can manage well 289 00:21:11.359 --> 00:21:15.359 Charles view and Charles's always good with these visions, which is not my case. 290 00:21:15.759 --> 00:21:21.759 Things we reach peak win and probably there are certain regions where you will 291 00:21:21.799 --> 00:21:26.839 reach Peaquin I think of short wind that's definitely more on shore. Is very 292 00:21:26.880 --> 00:21:33.720 difficult in relation to just the logistics and the size of the turbines in relation 293 00:21:33.880 --> 00:21:37.680 to the local population. But that's finished on a positive note. And as 294 00:21:37.720 --> 00:21:45.160 you said, what is very interesting in the wind resources is that the antique 295 00:21:45.160 --> 00:21:48.440 correlation with solar, whether it's on a daily basis, because you find that 296 00:21:48.599 --> 00:21:53.359 in Australia you said, but in Texas as well, and also the seasonal 297 00:21:53.480 --> 00:22:02.079 part because it's mostly sunny in summer and mostly in winter. So how do 298 00:22:02.160 --> 00:22:07.160 you see the future of the wind industry in the next three to five years, 299 00:22:07.759 --> 00:22:12.039 knowing that the industry has kind of dig itself in a crisis where all 300 00:22:12.160 --> 00:22:17.559 your nn are using money, are we going to see a consolidation. Are 301 00:22:17.559 --> 00:22:21.920 we going to see a slow down in technological development? How do you see 302 00:22:22.119 --> 00:22:26.079 the next three years? So I definitely don't think that we're saying pike wind, 303 00:22:26.200 --> 00:22:32.519 and I really think that it would be a real tragedy if we did. 304 00:22:32.599 --> 00:22:36.039 I think we need to not just the wind industry way, but you 305 00:22:36.079 --> 00:22:37.759 know, the planet way, need to make sure that doesn't happen. I 306 00:22:37.759 --> 00:22:42.200 mean, if you look at scenarios for one hundred percent renewable electricity grids, 307 00:22:42.519 --> 00:22:45.480 they always have a lot more wind than solar in them. And even if 308 00:22:45.559 --> 00:22:49.039 you increased the price of wind by a lot, you would still see that. 309 00:22:49.200 --> 00:22:53.279 Because I've said a couple of times now, at the point the end 310 00:22:53.279 --> 00:22:59.440 of the energy transition, wind isn't competing against solar panels, winds competing against 311 00:22:59.440 --> 00:23:04.559 eventually real storage and other really expensive kinds of technologies like that. But on 312 00:23:04.599 --> 00:23:10.640 the other hand, the major manufacturers have not been investing in the manufacturing capacity 313 00:23:10.640 --> 00:23:15.319 that you would need to see the twenty thirty targets and beyond, and why 314 00:23:15.319 --> 00:23:18.759 haven't they been investing. To me, it's obvious that they don't believe these 315 00:23:18.920 --> 00:23:22.400 targets, So that we need to decide if we are actually serious about the 316 00:23:22.519 --> 00:23:26.200 energy transition, and if we are, you need to give people a reason 317 00:23:26.440 --> 00:23:30.839 to invest. You don't build a winter by manufacturing factory only to shut it 318 00:23:30.880 --> 00:23:37.079 down in six months because your sales didn't eventuate. So the manufacturers really need 319 00:23:37.119 --> 00:23:40.960 to see certainty if they're going to keep on building out more turbines, and 320 00:23:41.000 --> 00:23:44.559 I think it is just really time for a shift. If governments want to 321 00:23:44.559 --> 00:23:49.119 meet their targets, then they can't only look for the cheapest megawatt hour. 322 00:23:49.400 --> 00:23:53.680 They need to plan out what kinds of technology they're going to need, not 323 00:23:53.960 --> 00:23:59.759 just next year but into the future, and help support the industries that would 324 00:23:59.759 --> 00:24:03.440 be need to supply that. So there will be some consolidation. I won't 325 00:24:03.440 --> 00:24:08.279 be surprised to see some of the major manufacturers cease to exist. But I 326 00:24:08.319 --> 00:24:14.599 think also we've got more of a global appetite now for countries to consider energy 327 00:24:14.680 --> 00:24:18.680 security as well as just the cheapest price we're seeing. You know, a 328 00:24:18.720 --> 00:24:22.599 lot of countries now have plans to make sure that they have their own secure 329 00:24:22.680 --> 00:24:26.920 battery supply chain, and that's going to be the same for the wind industry 330 00:24:27.160 --> 00:24:33.720 and probably eventually solar as well. Otherwise you'll miss out if you haven't secured 331 00:24:33.759 --> 00:24:38.920 those those suppliers for your country's projects. Sure, I can tell you my 332 00:24:40.000 --> 00:24:44.839 opinion. But my opinion is the wind industry has to stop crying and stop 333 00:24:44.880 --> 00:24:48.720 looking for subsidies, and they need to go on innovation and stop going and 334 00:24:48.720 --> 00:24:52.039 thinking that bigger is better, because bigger is not better. I do not 335 00:24:52.160 --> 00:24:56.119 want to have an armshore wind turbine that is one hundred and fifty meters long 336 00:24:56.160 --> 00:24:59.119 in terms of play hit. Nobody does. That's the reality of it. 337 00:24:59.200 --> 00:25:00.920 So that's why you've got p wind in Europe. Now you have it. 338 00:25:02.079 --> 00:25:04.519 That's why we've got restructuring in the industry. So you might say, okay, 339 00:25:04.559 --> 00:25:07.039 offshore wind, but you know you're not going to hit the targets. 340 00:25:07.039 --> 00:25:11.839 And it's not because of the targets. It's because of the fact that it's 341 00:25:11.880 --> 00:25:15.599 difficult to go on that get these turbines out in the north Sea or whatever 342 00:25:15.640 --> 00:25:19.160 it is in a short period of time. That's part of the issue. 343 00:25:19.680 --> 00:25:23.880 Okay, So we end up on a disagreement, which is yeah, funny, 344 00:25:23.960 --> 00:25:26.759 no, no, it's fine. Look, it's it's rare because generally 345 00:25:27.039 --> 00:25:33.839 everybody agrees and we are a very kumbaya style or EPISERD, but somehow it 346 00:25:33.960 --> 00:25:37.440 reflects the state of this industry, in my opinion, needs to reset. 347 00:25:38.599 --> 00:25:41.799 Set agree. I agree on that every set it's the renewable industry needs to 348 00:25:41.839 --> 00:25:45.640 reset. Actually it's not just a windiness. I agree with your ard that 349 00:25:45.799 --> 00:25:49.960 wind turbines don't need to get bigger either. It's not necessarily cheaper to make. 350 00:25:51.240 --> 00:25:52.319 A lot of people think that, you know, the laws of scaling 351 00:25:52.400 --> 00:25:56.160 mean that bigger is cheaper for wind turbines, and that's not true. Some 352 00:25:56.759 --> 00:26:00.480 factors that make a wind turbine cheaper as it gets bigger, and some factors 353 00:26:00.480 --> 00:26:04.799 that make it cheaper as it stays smaller. So I don't think that we 354 00:26:04.960 --> 00:26:07.920 need to keep on pushing to bigger and bigger turbines, and I don't think 355 00:26:07.920 --> 00:26:11.319 we should. I think we have a good point now where we can just 356 00:26:11.359 --> 00:26:18.880 focus on rolling out rapidly, and the surviving NMS needs to make money because 357 00:26:18.960 --> 00:26:26.240 you can't build an industry based on the manufacturers or losing money. It's not 358 00:26:26.440 --> 00:26:32.640 studid. So the NM needs to focus on making money, which means longer 359 00:26:32.759 --> 00:26:37.279 series, which means fine, we're not going to change those design for three 360 00:26:37.359 --> 00:26:41.200 years. We need to stabilize the design of longer series and have a real 361 00:26:41.359 --> 00:26:45.799 conversation with the developer. Answer, guys, this is the model and we're 362 00:26:45.799 --> 00:26:49.000 not going to touch it for three years. That's the way to reduce the 363 00:26:49.039 --> 00:26:55.319 costs while increasing the margins. I agree with that. Okay, so if 364 00:26:55.319 --> 00:26:59.240 we will agree, we can't tell Rosie. Thank you so much for coming 365 00:26:59.279 --> 00:27:03.200 on the show. That's a great pleasure. We love your YouTube channel, 366 00:27:03.279 --> 00:27:07.759 and we put over this is a real links so the wind industry see it 367 00:27:07.799 --> 00:27:11.839 as a future. Of course it does. Bye, Thanks so much for 368 00:27:11.880 --> 00:27:17.599 having me. But Rosie is a bit more bullish on the wind industry than 369 00:27:17.640 --> 00:27:19.839 you are. But bizarrely, I think I'm with you on this one. 370 00:27:21.240 --> 00:27:23.680 She is, but she is because she's part of the industry. That's what 371 00:27:23.720 --> 00:27:29.000 I would say. And sometimes it's when you're in the industry itself, you're 372 00:27:29.240 --> 00:27:33.200 you don't really see what's going on. Because I take something from what she 373 00:27:33.319 --> 00:27:37.039 said, which is I thought it was brilliant to hear her explaining really what 374 00:27:37.119 --> 00:27:41.440 was going on with the blades and the fact that you know, it's a 375 00:27:41.480 --> 00:27:47.440 move from glass fiber to mixing in carbon fiber and there's just probably pushing things 376 00:27:47.480 --> 00:27:49.200 a little bit too quick to market. But I'll tell you what I took 377 00:27:49.200 --> 00:27:53.400 out of it. This is an industry wide problem. So the blade issue 378 00:27:55.000 --> 00:27:59.880 is not just a Semen's gomesso. And I think it's across the industry that's 379 00:28:00.240 --> 00:28:04.200 concerning. And I think if it goes offshore, wow, that's a disaster. 380 00:28:04.480 --> 00:28:08.319 So so let's hope it doesn't. But I do fear that the technical 381 00:28:08.359 --> 00:28:12.759 issues and the unshore blades are probably much worse. We think. That's what 382 00:28:12.799 --> 00:28:15.359 I take of it. And that's not even talking about the market. That's 383 00:28:15.400 --> 00:28:18.880 really talking from a technical level. That thereshes with some of the terribines out 384 00:28:18.920 --> 00:28:26.000 there. It's really critical because until two or three years ago, any developers 385 00:28:26.079 --> 00:28:27.839 okay Wind, you know, okay, you know fine, I can sleep 386 00:28:27.880 --> 00:28:32.359 at night. Everything's going to be fine. And now if you start having 387 00:28:32.480 --> 00:28:38.519 some technical doubts inside the finance community, that's gonna slow the investment process. 388 00:28:40.279 --> 00:28:44.759 They're going to ask for additional check, additional test, more due diligence, 389 00:28:44.799 --> 00:28:48.240 and you're just gonna make the whole thing more costly. That's true, that's 390 00:28:48.240 --> 00:28:51.480 a good way of partner. I don't know if it's going to be peak 391 00:28:51.559 --> 00:28:56.720 wind, you know, we've been calling peak coal or peak gas or peak 392 00:28:56.759 --> 00:29:00.039 oil, and more times than not we've been proven wrong. But what I 393 00:29:00.079 --> 00:29:04.400 want to say is the valuation of the wind industry was the volution of a 394 00:29:04.680 --> 00:29:11.079 gross industry, and I think they need to be set and concentrate on being 395 00:29:11.119 --> 00:29:17.440 a value industry, meaning the Semens, the Vestas, the ge They need 396 00:29:17.519 --> 00:29:22.799 to make money. Everybody needs to make money, not talk about the future, 397 00:29:22.440 --> 00:29:26.359 make money every quarter. I agree with you totally on that, and 398 00:29:26.400 --> 00:29:29.839 in fact, if you look at the industry over the last twenty years, 399 00:29:30.119 --> 00:29:33.119 it's been boom and bust, boom and bust, boom and bust. There's 400 00:29:33.160 --> 00:29:37.039 no doubt that has to be sorted out. And I think there is another 401 00:29:37.079 --> 00:29:40.599 pressure here that is the Chinese. And it's not that the Chinese are going 402 00:29:40.599 --> 00:29:42.759 to necessarily go into Europe or the US. What they're going to do. 403 00:29:44.359 --> 00:29:48.640 They're going to go to all the other markets where Vestas and Semens, Camess 404 00:29:48.680 --> 00:29:51.880 and whatever we're selling, and they're going to be outbid. That's part of 405 00:29:51.880 --> 00:29:53.079 it. And I think the other thing that I want to say is the 406 00:29:53.119 --> 00:29:59.200 best wind sights have been taken in the Western world. So what you're going 407 00:29:59.240 --> 00:30:02.599 to do you're going to reap power and you repower a bigger urb and repowering 408 00:30:02.640 --> 00:30:06.599 is harder. That's why I'm cautious about the market. It's not to say 409 00:30:06.960 --> 00:30:10.119 pig win sounds to be really really negative. It's not. It's we're going 410 00:30:10.160 --> 00:30:14.319 to continue growing wind every year. So in other words, of a port 411 00:30:14.359 --> 00:30:18.000 of electricity that comes from wind, it's going to grow every year. We're 412 00:30:18.000 --> 00:30:21.440 gonna have more killer what's coming from wind. But it's not the rate of 413 00:30:21.440 --> 00:30:23.319 growth stopped, which means it's with you know, we're in a tough, 414 00:30:23.519 --> 00:30:30.279 tough situation for the industry. That normally means you have restructuring and consolidation all 415 00:30:30.319 --> 00:30:33.160 that. I think that's what's gonna happen. Yeah, the big reset, 416 00:30:33.839 --> 00:30:37.039 the big reset. Well well said, that's said. Okay. We like 417 00:30:37.079 --> 00:30:41.079 to thank Rosie for coming on the show. She's great and everybody should tune 418 00:30:41.079 --> 00:30:45.720 in on our YouTube channel. And she also participate to a wind podcast which 419 00:30:45.759 --> 00:30:51.799 is interesting called a Time. We thank our partners for the show, Win 420 00:30:51.839 --> 00:30:57.440 Your Hop, Love when You're Up Rate Association and of course Expo good Friends, 421 00:30:57.440 --> 00:31:03.359 excellent Swiss Utility and Trading business and trading business, great traders, good 422 00:31:03.400 --> 00:31:08.160 Lauren Well. I look forward to chatting two weeks time. Absolutely, thank 423 00:31:08.240 --> 00:31:14.440 you for listening to Redefining Energy. Don't forget to rate the show and subscribe 424 00:31:14.599 --> 00:31:18.160 on Apple Podcast, Spotify, or the platform of your choice.