Written by 8:40 am News, Opinion

Green Power Denmark: Europe must choose between a price race or jobs and security

Europe cannot both lower the price of new green energy and keep tens of thousands of good jobs in the wind turbine industry, according to a number of international experts. Prime Minister Mette Frederiksen recognizes that state aid is unfortunately the new global reality that Denmark has to navigate.

Europe has to choose between the cheapest possible electricity on the one hand and jobs and security on the other. Patrick Pouyanné, CEO of TotalEnergies, expressed himself so bluntly recently at a conference in France.

The announcement from the French oil and energy giant comes, among other things, after a co-ownership in a Chinese wind project has demonstrated how wind turbine manufacturers such as Goldwind and MingYang operate at a cost level that enables them to deliver turbines at 2/3 the price in Europe, partly thanks to generous help from the Chinese state.

There is a collective choice to be made in relation to whether we want to prioritize the price of electricity or having jobs in Europe, said Patrick Pouyanné according to industry media Recharge.

The European green energy industry recently warned of another serious consequence if Europe allows itself to face unequal competition, with Chinese manufacturers benefiting from both direct government subsidies, lenient financing schemes passed on to customers and a huge domestic market that is exclusively is reserved for Chinese players.

– There are 300 sensors in a modern wind turbine. As a European citizen, I want data from these sensors to be stored and analyzed exclusively in Europe. It is important to be aware of why renewable energy developers in Europe may be tempted to look at Chinese wind turbines. They are offered at lower prices and with deferred payment models, which European manufacturers in the OECD countries are not allowed to offer, said industry association WindEurope’s managing director Giles Dickson at a recent conference.

Mette Frederiksenm Prime Minister: State aid is back on the table

The statements from the two international heavyweights exactly frame the challenge that Green Power Denmark has also addressed in a Danish context. Namely, the need for a more active industrial policy in response both to China, but also to the USA, which entices companies and investments with huge tax deductions via the Inflation Reduction Act (IRA).

If Denmark and Europe do not follow suit and make sure to restore a fair playing field, European technology risks being completely wiped out – just as happened with the production of solar panels 10-15 years ago. And once the European companies and jobs in the entire value chain are gone, the opportunity to prioritize recyclable materials, green steel, the marine environment and decent working conditions has also evaporated.    

State aid is back on the table. It is not a Danish proposal that it should, but it is a new reality that we will have to deal with said Mette Frederiksen, Prime Minister

Green Power Denmark is not a supporter of state aid, but we have to follow suit and lead an active industrial policy if our green industry is to come out in one piece on the other side of the order valley we are seeing right now, and be able to supply the huge demand of the coming years. If we do nothing now, we risk losing our technological edge at a time when the whole world is tripping to phase out fossil energy in favor of wind, solar and new Power-to-X fuels. It will be unbearable, says managing director Kristian Jensen, who also emphasises the risk of becoming dependent on China. 

In addition to losing our second largest export product, we also risk that our dependence on oil and gas from the Middle East and Russia will turn into a dependence on Chinese technology in the same way as has happened with solar cells, says Kristian Jensen.      

Prime Minister Mette Frederiksen also acknowledges that the reality right now, unfortunately, is that state aid is back on the global agenda.

When the economic global center of gravity shifts, when the Americans really check in with the Inflation Reduction Act (IRA), then we as a European continent will also have to deal with our overall competitiveness. State aid is back on the table. It is not a Danish proposal that it should, but it is a new reality that we will have to deal with, the Prime Minister recently stated at the annual meeting of Danish Industry and added:  As a government, we naturally intend to navigate the landscape that exists – no matter why it is set as it is.

The world’s largest wind turbine manufacturer, Vestas, is one of those who have long tried to call out politicians about the need to protect a precious industry for a few crucial years, just before the world market explodes.

We need to talk about the value that offshore wind turbines represent. They do something for the climate, reduce consumers’ electricity bills, create jobs and energy independence. But there is no focus on that. It’s all about wringing as many kroner out of offshore wind as possible. And so we end up where we are now, Group Senior Vice President Morten Dyrholm told EnergiWatch, in the wake of a recent UK tender fiasco in which not a single offshore wind developer participated.

Source: Green Power Denmark