Wind Turbine Manufacturers Getting Greedy?

An article in the January 2006 Windpower Monthly corroborates the rumors heard over the past year in the wind industry: the installed price of wind turbines is rising. Since the installed cost of the turbine is the dominant factor in wind energy economics, this means that the cost of wind energy is rising.

Windpower Monthly Article on Wind Energy Economics

The article goes on to note that wind turbine costs have increased because of unavoidable factors such as higher materials costs and higher shipping costs. Fair enough. But, distressingly, the article points out only in passing two important factors that are well within in the control of the wind turbine manufacturers: tightness of supply and increased margins.

In other words, the wind turbine manufacturers — Vestas, Gamesa, GE, et al — are not expanding assembly capacity commensurate with the rate of demand growth, and are instead using the favorable situation to extract higher prices from project developers who purchase wind turbines.

As a capitalist, I generally have no problem with manufacturers taking advantage of a strong bargaining position to make good money. However, I don’t think the current pricing practices are a good situation for the still-maturing wind industry. Especially without subsidies, wind is still largely uncompetitive relative to other forms of electricity production (especially coal), and wind still faces considerable skepticism from utilities and many uninformed observers. In other words, wind energy is not yet on firm ground: now is not the time to get greedy.

It strikes me that the manufacturers are gouging a little bit while they can — maybe the first time that conditions have allowed them to do so — but at the risk of damaging their market, and thereby reducing the full magnitude of the growth potential open to wind energy. It is a risky strategy that could backfire.

I’d like to see a bit more manufacturing capacity expansion, especially here in the U.S. where little currently exists. Not so much as to create a glut and a subsequent bust — the industry definitely doesn’t need that — but enough so as to facilitate the growth potential of the sector and serve what currently seems to be unmet demand.

Of course, another interpretation of the current situation is that the improvement curve of the dominant 3-bladed upstream wind turbine is flattening out. If so, this would open up opportunities for alternative turbine designs to come into the market. I’ve seen some interesting designs (e.g., vertical axis) with potentially better economics, but these have largely been ignored as unviable against the tried-and-true conventional paradigm.

However, if the standard wind turbine has minimal further cost reduction potential, then perhaps it’s time for the innovators to get to work again on new wind turbine technologies. That would shake things up for the wind turbine manufacturers — and maybe make them regret the overly strong pricing tactics they seem to be using today.

10 replies
  1. David Anthony Harbou
    David Anthony Harbou says:

    I have invented an entirely new kind of verticle axis wind turbine (no resemblance to a Savonius Rotor)that will be capable of blade speeds equal to or exceeding any horizontal axis wind turbines, and furthermore, does not require articulated blades; the blades are presented at a nearly ideal angle of attack to the oncoming wind, and also the units can be stacked, so that there is a far larger capacity for kilowatts for installation area foot print than any other kind of wind turbine.I already have patented inventions to my credit. The wind turbine design has not been presented yet, nor has my very innovative new control system for STOL airplanes for 100% stall proof ailerons and vastly improved wing performance. Write to me at scarab2@cox.net or visit one of my web sites; preferably, a technical one, such as: http://www.atmsite.org/contrib/Harbour/index.htmlhttp://www.atm-workshop.com/foucault.htmlor :http://www.atmsite.org/contrib/Harbour/Foucault.htmlI would like to present my new concept for a new, superefficient but very simply engineered verticle axis wind turbine to interested parties.

  2. David Anthony Harbou
    David Anthony Harbou says:

    I have invented an entirely new kind of verticle axis wind turbine (no resemblance to a Savonius Rotor)that will be capable of blade speeds equal to or exceeding any horizontal axis wind turbines, and furthermore, does not require articulated blades; the blades are presented at a nearly ideal angle of attack to the oncoming wind, and also the units can be stacked, so that there is a far larger capacity for kilowatts for installation area foot print than any other kind of wind turbine.I already have patented inventions to my credit. The wind turbine design has not been presented yet, nor has my very innovative new control system for STOL airplanes for 100% stall proof ailerons and vastly improved wing performance. Write to me at scarab2@cox.net or visit one of my web sites; preferably, a technical one, such as: http://www.atmsite.org/contrib/Harbour/index.htmlhttp://www.atm-workshop.com/foucault.htmlor :http://www.atmsite.org/contrib/Harbour/Foucault.htmlI would like to present my new concept for a new, superefficient but very simply engineered verticle axis wind turbine to interested parties.

  3. David Anthony Harbour
    David Anthony Harbour says:

    I have invented an entirely new kind of verticle axis wind turbine (no resemblance to a Savonius Rotor)that will be capable of blade speeds equal to or exceeding any horizontal axis wind turbines, and furthermore, does not require articulated blades; the blades are presented at a nearly ideal angle of attack to the oncoming wind, and also the units can be stacked, so that there is a far larger capacity for kilowatts for installation area foot print than any other kind of wind turbine.I already have patented inventions to my credit. The wind turbine design has not been presented yet, nor has my very innovative new control system for STOL airplanes for 100% stall proof ailerons and vastly improved wing performance. Write to me at scarab2@cox.net or visit one of my web sites; preferably, a technical one, such as: http://www.atmsite.org/contrib/Harbour/index.htmlor: http://www.atm-workshop.com/foucault.htmlor:http://www.atmsite.org/contrib/Harbour/Foucault.htmlI would like to present my new concept for a new, superefficient but very simply engineered verticle axis wind turbine to interested parties.

  4. Anonymous
    Anonymous says:

    It's always funny to hear the conspiracy types who imagine dark motives behind price increases, but never seem to be glad when prices fall. In other words, they understand only one side of the supply/demand equation. High prices lead manufacturers to increase production – GE knows that if they don't , Vesta or Windjammer or Siemens or someone else will and garner the profits. I'm disgusted at how stupid this generation is when it comes to understanding the simple basics of the fre market system that they have lived under all their lives.Conspiracy theories are the product of a confused and simple mind that is out of touch with reality.

  5. Vertical Axis Wind T
    Vertical Axis Wind T says:

    vertical axis wind turbines is that the horizontal wind turbines have a tail rudder that always moves to face the turbine into the wind. Depending on how the wind is blowing, this can be distracting or downright annoying.

  6. Vertical Axis Wind Turbines
    Vertical Axis Wind Turbines says:

    vertical axis wind turbines is that the horizontal wind turbines have a tail rudder that always moves to face the turbine into the wind. Depending on how the wind is blowing, this can be distracting or downright annoying.

  7. windturbines
    windturbines says:

    The price of wind turbine is related withe needs and cost of material. For example, the fiber glass keep a rising in the past twelve month and lead the cost of blade rising. This situation also happen in the controller and inverter manufacturer.

  8. sindhu
    sindhu says:

    vertical wind turbine are both efficient and quiet, making them more suitable for energy production in residential areas than previous wind-based renewable energy technologies. Many current VAWT models resemble eggbeaters, with two blades attached to a central shaft, which is in turn anchored in a power generator. Others have a number of large, flat blades protruding from the central axis; and still others have a helix of extremely light plastic surrounding the axis. They typically stand between two and five feet in height and the best ones are able to attain 30 – 60% efficiency, depending on where they are located.

  9. jerry dycus
    jerry dycus says:

    I'm sorry but physics says VWT can't be eff, only around 10% for the best ones. I have designed built very eff, quiet HWT's that get in the 40% eff range. I also design VWT's in the form of very fast sailboats. But I can guaranty VWT's will never be anywhere near as eff, profitable as HWT's will be. I have no dog in this fight as I do kinetic hydro, EV's now.

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