BWE Industry Report - Wind Industry in Germany 2018

TECHNOLOGY Low

TECHNOLOGY Low remuneration, large turbines The low prices for wind power, which have emerged as a result of the tenders in the German Renewable Energy Act (EEG), put pressure on wind turbine manufacturers. They have to construct turbines with higher yields at lower specific costs. In the off-­ shore sector, bidders are already calculating wind turbine capacities of 13 to 15 MW. In the fourth onshore auction in February 2018, reference prices ranged from 3.8 to 5.28 ct/kWh, with an average of 4.73 cents. This means that the remuneration level has almost halved compared to the EEG 2014. And with a price of 4.73 cents, the German Wind Energy Association (BWE) believes that a “reliable real market value” is emerging. An analysis by Agora Energiewende in May 2017 concludes that the full costs at good sites in Germany could drop to 3 to 4.5 cents/kWh. Competitive pressure is affecting manufacturer prices. According to information from manufacturer Vestas, the average turbine price for new orders at the end of 2017 was 740,000 euros per megawatt, i.e. 22 percent lower than a year earlier, according to an analysis by Overmöhle Consult. According to Agora, this development is made possible by further growth in installed capacity and rotor blade surfaces. The resulting additional yields would far exceed the additional costs. According to Agora, cost reductions are also possible with the lease prices and maintenance costs, which are significantly higher in Germany than the international average. ENERCON is developing two new turbines based on its 3 megawatt platform (EP3): The E-126 EP3 and the E-138 EP3 (shown here). 22 Wind Industry in Germany

Economic report | TECHNOLOGY Nordex N149/4.0-4.5. The Delta4000 series is the latest development of the tried and tested Delta platform. Vestas V136-3.45 MW at Østerild test centre, Denmark (in December 2016). Tenders generate a technology leap According to Fachagentur Wind, the German market was firmly in the hands of five manufacturers in 2017: Enercon, Vestas and Nordex supplied three quarters of all new equipment, with GE and Senvion bringing it up to 94 percent. In response to the tenders, all these manufacturers have put more efficient equipment on the market. For example, Enercon’s new 3-MW class E-126 EP3 and E-138 EP3 models for medium and low-wind locations offer a larger rotor swept area and higher rated capacity. The yield of the E-126 was increased by 13 percent, according to manufacturer information. Vestas’s response to the tenders is a new 4-MW class turbine: the V136-4.2 MW for medium and high wind areas. Vestas promises additional yields of up to 21 percent over the year compared to the predecessor version. Nordex enters the tenders with its new N149 / 4.0-4.5 Kraftpaket (“Powerhouse”). Its rotor swept area has increased by 62 percent and the maximum tower height is now 164 metres, having grown another 23 metres. GE made the biggest leap with its 4.8 MW turbine. The 158- metre rotor diameters are the longest among onshore turbines. According to GE, this technical achievement was made possible by the takeover of the Danish rotor blade manufacturer LM in early 2017. In addition to the significant increases in performance and efficiency, manufacturers also have to optimise all their processes, from production to transport and logistics, through to installation and commissioning. This is particularly significant in offshore wind power. Here, the challenges are even greater after the first zero-cent bids in April 2017. These bids are based on the assumption that the turbine capacity currently available on the market of just under 10 MW will increase to 13 to 15 MW by the planned commissioning of the projects in the middle of the next decade. The cost of generating electricity should reduce to such an extent that financing the operation of the turbines will be possible simply by selling the electricity on the stock exchange or to industrial companies. Wind Industry in Germany 23