Big oil and gas corporations are among key contributors to wind energy deployment. BP and Equinor, for example, have embarked on a joint offshore wind project in the US,
while Enbridge is developing several wind farms off the coast of Europe, which are expected to go live by the end of this decade.
Shell has over 2.2 GW of offshore wind capacity in operation and under construction,
while Eni’s joint venture has acquired four onshore wind projects in Italy with a total capacity of 0.1 GW.
Yet this year, the wind power industry has run into headwinds. Financing wind projects is a big challenge, with their economics affected by the mounting inflation pressure and higher interest rates, while opportunities for revenue growth are usually restricted by the government. The rise in commodity prices, such as steel, has also pushed the price of wind turbines up 40% over the last two years, according to estimates by the industry body WindEurope. The problem is exacerbated further by wear and tear due to design defects and poor workmanship. For example, the leading wind turbine maker Vestas has flagged quality issues with turbine blades in its onshore fleet and has provided an extra €600 million to fix them.
It has also emerged that Siemens Gamesа will need at least €1 billion to fix major issues with wind turbine components.
It’s yet to be seen how all these factors will impact the pace of wind power deployment and oil majors’ capacity expansion plans. But the course towards energy transition is clearly favored by both the general public and political elites.