European wind faces a host of challenges: slow eurozone growth, crashing oil prices, and uncertain political support are all worries.
Yet there was a boost for the sector from Sweden yesterday.
The utility Vattenfall revealed a new business and management structure that is set to come into force on 1 April. The change is a clear signal that the state-owned company has identified wind as one of its key strategic priorities for the rest of this decade.
The restructured Vattenfall will have a dedicated wind division as one of its six key business units, with the other five being heat, customers & solutions, distribution, generation and markets.
This is a clear indication that the firm wants to boost the proportion of wind in its portfolio, which accounted for just 2% of the firm’s total generation capacity in 2013. The portfolio is currently dominated by fossil fuels (48%), nuclear (29%) and hydro (20%).
With those numbers, it may look strange to establish a dedicated division for wind, but it actually makes a lot of sense. Wind will no longer be lumped into a renewables division with hydro, and will be the sole focus of Gunnar Groebler, who is set to become head of Vattenfall’s wind unit. Groebler is currently the company’s head of renewables in continental Europe and the UK.
The establishment of a dedicated wind division may look like a big shift, but is really a continuation of what Vattenfall has been doing in the last three years. Changes in the energy market in continental Europe have forced the firm to move away from fossil fuels.
In July 2012, Vattenfall was the first big European utility to make a significant write down on the value of its fossil fuel assets, which prompted the business to split into two regional units: one focused on Scandinavia and the other focused on continental Europe and the UK. The firm made a significant commitment to maintain its investments in renewables despite this upheaval.
The business has been true to its word and made significant investments in major wind projects, both onshore and onshore.
Its current projects including the 288MW Dan Tysk offshore wind farm in the German North Sea, with Stadtwerke Munchen; the 76-turbine Pen y Cymoedd onshore wind farm in south Wales; and the 63MW repowering of the 21MW Klim wind farm, which is set to become one of Denmark’s biggest wind farms.
The company has built on its position as a wind farm developer and operator with a major presence in Sweden, Denmark, Germany, the Netherlands and the UK.
Since then, the firm has been forced to make further write downs on traditional fossil fuel assets, and in October 2014 it revealed a plan to sell German lignite operations to raise up to €3bn. The German government has appealed to Sweden to keep these plants open, although there is little indication that Vattenfall will change.
And now, this restructuring further shows that the company plans to increase its investment in renewables, including wind, and this must be good news for the wind industry in the UK and Europe.
It’s an exciting early boost in the context of an uncertain 2015.
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