“Absolutely unstoppable winds”. By IRINA SLAV
“Renewable energy giants appear relatively sanguine about U.S. President Trump’s anti-wind policies, describing process of replacing fossil fuels with electrically powered products as “absolute unstop
“Absolutely unstoppable winds”
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I apologise to everyone for spamming them with the shorter, free version of this story. It was not meant to be sent out but merely published here, as will be a greater number of short reports going forward. Anyway.
“Renewable energy giants appear relatively sanguine about U.S. President Donald Trump’s anti-wind policies, describing the process of replacing fossil fuels with electrically powered products as “absolutely unstoppable.””
The lead comes from a CNBC article from last week, in which the media outlet tried to convince its audience that despite Trump’s offensive against wind power, all was going well with the sector and never mind the share slump and the latest Ørsted impairment, and oh, look how well things are going for Siemens Energy.
Indeed, things are going well for Siemens Energy and not just. Because they don’t do “the wind thing,” as eloquently put by the U.S. president. In fact, they do a lot of other things that will indeed benefit from Trump’s energy policy agenda. Wind, meanwhile, will take a back seat, and it will happen really quickly. As in, reallyquickly. In fact, it’s already happening, as “renewable energy giants” salivate over data centre demand and Trump’s expected boost for gas.
“We need to see what’s behind all the executive orders and the policies. So far, I believe there are many areas where actually Siemens Energy benefits a lot,” Siemens Energy’s supervisory board chairman, Joe Kaeser, said at the latest WEF gathering in Davos. He even called Trump’s agenda “a slight plus” for the company because it’s time to take the masks off.
Another “renewable energy giant”, Spain’s Iberdrola, was also quite upbeat about Trump’s agenda, so much so, one might think it doesn’t do “the wind thing” at all.
“We are seeing that probably we are in the best moment for electrification,” Iberdrola’s executive chairman, Ignacio Galan, said in Davos, going on to mention data centres that are, per CNBC, “electrically powered”, along with “low-emission vehicles as well as cooling and heating applications.” Per Galan, electrification was “absolutely unstoppable.” One might be left with the impression that up until now, elrctrification was tortured, slow, and totally stoppable because we’re all using coal cookers.
Now, why might these unquestionable renewable energy giants be so happy about Trump’s energy policies given their giantness in renewable energy? Well, because it’s not their only business, of course. In fact, Trump has done these companies a favour by giving them an easy excuse for changing direction away from wind and solar without having to answer increasingly awkward questions about financial figures.
Let’s take Siemens Energy’s latest quarterly report. In it, the company boasted a 42.3% increase in orders to 15 billion euro in total. The drivers of that increase? Why, those were “large orders at Grid Technologies and Gas Services”. In the profit section of the report, however, things were negative, although the company called them a profit, which I always find charming. Anyway, Siemens Energy posted a “negative profit” of 115 million euro, admitting it was because of its wind business, whose losses were over 1 billion euro.
Ibedrola did a lot better but Iberdrola doesn’t have a money drain like Siemens Gamesa, and it’s basically the Gridmaster in Spain with little competition. For both, however, and all the rest of the electric utilities, Trump is a huge gift. Because of those data centres. Per Iberdrola’s Galan who’s not bothering to pretend, “All of those things require more electricity 24 hours a day. Our business in the United States is mostly in this area, which is networks … and the regulation depends on the state authority, so I think that is not really affected at all,” he told CNBC.
It is quite amazing to see that reliability is once again on the table as a priority for people who spent the last few years droning on about emissions and wind turbines. Surprising, however, it is not. This was bound to happen and it is happening. All they needed to drop the act was Trump and his anti-wind stance, which I’m sure both Galan and Kaeser took with a sigh of relief and a greedy spark in their eyes, as they visualised soaring electricity demand from data centres. Clearly, this will be the second Year of Data Centres, ushering in the Era of AI.
What’s good for the electric utilities, however, is the opposite of good for wind turbine developers. Poor Ørsted just got $1.7 billion poorer after its latest impairment on U.S. projects, all companies in the industry saw their shares tank after Trump took the helm, and the outlook is not good, even in Europe, where their subsidy revenues should be secure enough.
And they are, as recently evidenced by a UK story about surplus wind generation that saw a surge in exports (brilliant!) and the country’s grid regulator paying several operators to turn off their turbines (not so brilliant). Wind — and wind subsidies — works the same way in continental Europe as it does in the UK. But the money is running out, as I will not tire of repeating, so none of you can say “How surprising!” a couple of years from now, even though I know you wouldn’t.
The thing that a lot of people seem to be forgetting is the same thing that Tom Haverford and Jean-Ralphio Saperstein forgot in Parks and Recreation when they set up their company. As Parks and Rec wiki puts it — and I can’t put it better — “Entertainment 720 goes bankrupt after quickly blowing through their funding while doing little actual work.”
This is exactly what Europe is doing: pouring billions into wind power, only to have to pour even more to either balance the grid with those dreaded fossil fuels when the wind is low or to protect wind operators from bankruptcy when the winds are too high. Trump is really a gift to electric utilities. Let’s hear it from Siemens Energy’s Kaeser.
“Think about the data centers, artificial intelligence, we have waiting times now on large gas turbines. Actually, customers are coming and saying, hey can I make a reservation and I’ll pay you for a reservation? Just think about that. It hasn’t happened for a long time,” he told CNBC and you can practically hear the mwahaha.
“I believe the electrification age has just begun. Whether that’s gas turbines or wind or solar or something else, we’ve got everything, and the customers decide in the end. And one thing I believe one should not underestimate, the White House is not buying much [but] the customer does,” Kaeser also said, no doubt including wind and solar for the sake of politeness. And never mind that the electrification age began over a century ago.
Wind is over. European governments just haven’t processed it yet — even as transition poster girl Germany faces coal-for-longer scenario while it builds 14 GW of new wind capacity, and fellow poster boy Britain is currently bracing for its next named storm that will bring strong winds that will require turning off turbines and paying their operators just days after sub-par winds brought the share of wind power to less than 1% of total generation. Meanwhile in Brussels:
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As they say, follow the money.... Whilst the UK and Europe are spaffing huge amounts on wind and solar, strangely all the suppliers are saying how wonderful wind and solar are....