Should governments cap wind turbine sizes?

Wind industry experts are calling on governments to cap turbine sizes to help reduce pressure on the supply chain and force turbine makers to focus on the reliability of their machines. But recent financial results suggest that western turbine makers are already taking a more conservative approach.


May 14, 2024

  • Turbine makers face calls to end the turbine size ‘arms race’
  • Critics claim a cap on size would ease supply chain pressure
  • But western turbine makers are already being more cautious


Should governments limit how large wind turbines can get?

The so-called ‘arms race’ for ever-larger onshore and offshore turbines has helped to bring down the levelised cost of energy from wind farms, and enabled wind to compete in an era of auctions.

But this growth has brought challenges too. Developing larger machines is an expensive endeavour for turbine makers. Adding 20% to a turbine’s headline capacity isn’t a case of simply making its existing design 20% bigger. These larger machines need time, investment, and technical innovations – and they can bring with them problems too. Manufacturers often need to invest in bigger factories to take these giant machines into production, while larger installation vehicles and vessels are needed too.

This has led to calls from industry onlookers that governments should bring in limits for the size of turbines that can be installed.

In February, Wood Mackenzie argued for a ten-year cap of 25MW on the headline capacity of offshore wind turbines, so that the supply chain can develop and standardise to cope with bigger models.

But is this the best way? The financial results of Europe’s largest turbine makers this year suggests they are already slowing the arms race due to commercial pressures, which means there will be an unofficial cap of sorts on the size of turbines that will be sold in the market.

Developers can be influential too. They need to think carefully about the turbines they plan to use when they are developing viable projects. Will they be available and reliable when it becomes time to install?

And we may see government agencies taking into account the prevailing trends in turbine technology in tenders, as they seek to prioritise realistic projects. Judging solely on price can lead to over-optimistic assumptions about the performance of turbines with the largest headline capacities.

However, our concerns about government-mandated caps include whether they will stifle innovation in the sector. On Tuesday (14th May), we heard that the UK’s Offshore Renewable Energy Catapult is has secured investment of £85.6m to expand a test facility in Blyth, Northumberland, to support the development of turbines of up to 28MW, for example.

We are also concerned about how easily such caps could be removed when the industry feels they are no longer needed.

The counter-argument to turbine size caps is that the market is best-placed to decide – and we see evidence that manufacturers are being sensible about their sizing strategies in recent results announcements.


Siemens shifts

Last Wednesday (8th May), Siemens Gamesa revealed strategic changes that it said would put it on track to break even by 2026, and then achieve a double-digit operating margin after that.

The Siemens Energy subsidiary has spent the last 12 months grappling with quality problems in its two newest onshore turbine models – the 4.X and 5.X – because it said they were not “sufficiently tested” before sale. This highlights one of the key concerns if new turbine models are raced into the market. But Siemens Gamesa announced last week that it plans to resume sales of the machines in late 2024.

The company’s plan to get on a more stable economic footing includes a focus on core markets with stable regulatory regimes, notably in Europe and the US; ramping up production capacity at key sites in Denmark, France and Germany; and cutting its headcount, with consultation on job cuts due to start soon. It did not commit there to bigger turbine sizes.

But, this year, Siemens Gamesa has also shown little willingness to step out of the arms race. In offshore wind, it is testing a prototype of a 15MW turbine in Denmark, which is equivalent with the largest planned models of its key western rivals. And yet it also said in January that it is set to start testing “the world’s most powerful offshore wind turbine prototype”, reportedly of 21MW. It has said little else about this prototype and that may be a well-intentioned attempt to dampen industry excitement, so developers don’t start factoring 20MW-plus machines into current plans.

Of course, some may question the wisdom of working on an up-to-21MW offshore turbine platform while the firms is grappling with wider issues in its wind business. However, it is worth noting that its well-publicised technology problems weren’t in the offshore technology division.

There is also a huge difference between starting testing on a prototype and launching a turbine platform for sale in the market. And, in any case, a cap of 25MW would not stop work on this prototype.

This also highlights the bind western turbine makers find themselves in.

On one hand, they want to be profitable and build their reputation for reliability. On the other, they are concerned that manufacturers from China are working on offshore turbines of between 18MW and 20MW headline capacity each, which may offer formidable competition in the years ahead – even though critics focus on the quality and reliability of Chinese-made machines.

The fact Siemens Gamesa is even hinting publicly about larger offshore models contrasts with the approaches of its two biggest western offshore wind rivals.

In February, GE Vernova announced it would focus its offshore efforts on a “workhorse” 15MW version of its Haliade-X turbine platform, rather than the larger 18MW models. The company is using a similar strategy onshore by focusing on 3MW-6MW models.

Meanwhile, on 2nd May, Vestas reiterated in its interim first quarter results for 2024 that it would continue to be selective about the work it takes on. The Danish firm has previously said it would take a break from developing larger turbines, and will instead focus on fixing challenges it faces with mass production and standardisation. Its largest offshore turbine measures 15MW, with first installations due this year.

Turbines will keep getting bigger and more powerful until they can no longer improve the economics of projects; until companies in the supply chain cannot cope with them; or until the backlash they face from locals concerned about their size and visual impact are too large. These provide important checks and balances away from government mandates.

We also note that companies are being more circumspect about project viability in their upcoming tenders, and this affects the technology they use. We will get a better sense of this as we see 2o24 auction results.

But we’re aware of human nature too. Offshore wind’s current challenges cannot be compared with the 2008 financial crash or 2020 pandemic in most senses, but one parallel we do see that those crises led to immediate promises to reset global finance and society respectively.  However, those commitments quickly faded as people moved on to thinking about other things and, at least in the financial sector, irrational exuberance returned.

Companies in the wind industry currently appear to be taking a sensible approach to turbine sizes, but we’re well aware that may not last. If that happens then the case for size caps may become stronger.