Navigating the Winds of Change: A Conversation with Nils de Baar from Vestas
While Vestas has been a pioneer in the wind energy industry for decades, its commitment to innovation and sustainability continues to drive its success.
Nils de Baar, President of Vestas Northern & Central Europe, is at the helm, leading the charge towards a greener future. Under his leadership, Vestas aims to further solidify its position as a global leader in renewable energy solutions. In this interview with AFRY, Nils de Baar shares his insights on the challenges and opportunities in the renewable energy sector and discusses his vision for the future of Vestas - to offer predictable and reliable world-class quality turbines that can be industrialised and localised on a global scale, ensuring a sustainable and efficient energy transition.
2023 saw a record 4.2 GW of new offshore wind installations and €30 billion in investments. Does this mean the turnaround is here, and is this growth sustainable for the future?
Growth in installations is very welcome. However, we need to scale at 5X before the end of the decade. We do see obstacles for offshore wind projects to achieve that objective right now. The current approach to offshore auctions in many of our markets drives unsustainable project economics that threaten project realisation. This is because many markets are focused on extracting maximum revenue from offshore wind, fuelling a ‘race to bottom’ competition in auction systems. This trend has led to the use of uncapped negative bidding, which is a dynamic bidding round for developers that goes until there is a single winner found – who is prepared to pay the most for the use of seabed. Besides these seabed fees becoming exorbitant, the other challenge is that they are charged upfront, although sometimes only in part, putting great pressure on the project business case before the project is built.
On the topic of pressure from competition, the Chinese manufacturer Mingyang Smart Energy recently secured a deal with a German developer for a German offshore wind farm. How does Vestas view this competition from Asia in the European market? What strategies are you pursuing in response?
We welcome competition on a level playing field and see two key reasons that provide Western OEM’s advantages outside China: Firstly, higher value across the product lifetime. The incentive structure in China is centred around low upfront capex, and we essentially believe that we have a different offer with higher capex but one that focuses on products that can deliver a high output over 30 years. And secondly, growing requirements beyond cost: The wind market is going towards stricter requirements on security, sustainability, working conditions, and local supply chains.
Regarding sustainability in growth, how are you aligning the increase in orders and production capacity with your Zero Waste goals to move towards a circular economy?
We are proud to have been recognised as the world's most sustainable energy company for the last three years. And making the world a more sustainable place lies at the very core of what we do every day. Committing to zero-waste turbines means we are aiming to create a value chain that generates no waste materials. To meet our Zero Waste goals while scaling up production, we rolled out our Circularity Roadmap in 2021. This involves increasing material efficiency by 90% by 2030 and reducing waste, especially in blade manufacturing. By focusing on circular design and improving processes, we’re making sure our growth supports our zero-waste ambitions.
Key elements in the circularity issue are rotor blades, which are such a strong visual symbol for the industry as a whole. Current rotor blades are not recyclable, posing environmental challenges. What is needed to make recyclable rotor blades the new industry standard?
Current rotor blades' recyclability issues are being addressed with our new blade circularity solution, which makes epoxy-infused blades circular without redesigning them. The Vestas co-developed chemical disassembly process can now break down epoxy resin into reusable materials, setting a new industry standard and eliminating previous environmental challenges. This approach is not only pivotal for the sustainable recycling of wind turbine blades but also marks a new chapter for recycled epoxy resins. The process opens up a circular pathway for wind turbine materials and creates new opportunities to supply recycled epoxy resins to a diverse range of industries. Vestas is currently scaling up the process together with our partner Stena Recycling in a two-year pilot and our ambition is to offer a commercial solution to our customers.
Moving further into the supply chain topic, Vestas faced supply chain disruptions and higher costs in 2022/23. When do you expect a more resilient and diversified supply chain to lower costs and dependencies? What actions are needed?
We are not immune to disruptions, however, based on our experiences since 2020, we have strengthened our supply and logistics setup as well as terms and conditions on projects, which enables us to minimise impact. We are also continually evolving our global manufacturing footprint to become more resilient. Last but not least we are of course also closely monitoring any development.
How does standardisation benefit your long-term supply chain investments and business stability, for instance supporting the North Seas Standard idea of Western OEMs pausing the MW-race to focus on standardisation and cost reduction?
Vestas has been advocating to stop the race for ever bigger turbines for a while now and we have observed that the wider industry has now begun to coalesce around this approach. This does not mean we will not continue to innovate, far from it, our industry has been breaking down technology barriers since the modern wind turbine concept appeared in the late 1970s. I'm proud to be part of such an industry that is transforming the society we live in for the better. However, to now accelerate the energy transition and to reach our Net Zero goals our industry innovation capabilities need to focus on efficiency and speed of deployment. Our focus goes into the preparation for commercial installation and industrialisation. Why? Because every time a new turbine platform is introduced, it requires to rethink the entire value chain. We and our partners and suppliers then need to develop new processes and tools, and train and educate our people to use them in a safe manner. And producing bigger components requires us and our suppliers to invest in new tools, new moulds, new trucks, cranes, and vessels. Vessels so large, that they potentially don’t fit into existing harbours.
Instead, what we want is to offer predictable and reliable world-class quality turbines that we can industrialise and localise at a global scale. And to allow each product a longer life cycle is the best way of doing it.
AFRY would like to extend our sincere gratitude to Nils for his invaluable insights and for taking the time to enlighten us with this informative interview on the offshore wind energy sector.
The offshore wind energy sector is at a pivotal moment in its journey. The record installations and significant investments in 2023 highlight the growing recognition of offshore wind energy’s potential. However, to truly lead the energy transition, the industry must overcome current market challenges and scale efforts exponentially. The ambition cannot be just to meet the demand but to set new standards in circularity, efficiency and standardisation that drive the global shift towards renewable energy. This journey has only just begun, and we are at the dawn of a new era in renewable energy
says Dennis Laidane, Principal, Global Expertise Cluster – Power and Heat Generation.
