Germany strengthens domestic wind energy industry

Germany plans to provide state guarantees for the production of wind energy, it announced on Thursday. This is part of a package that aims to boost Germany's wind industry, amid concerns among European governments and businesses about Chinese firms taking a lead in this sector.

Berlin will include guarantees in the KfW program for sustainable transformation, according to the Economy Ministry. Around 16 billion euros (17.34 billion dollars) of guarantees are required for a production ramp up by 2030.

These measures will expand the number of companies who must comply with energy cybersecurity regulations. This includes all those that have access to power generation facilities.

The ministry spokesperson said that the measures would be implemented immediately and the first results will be discussed in early 2025.

"We need to continue improving the conditions in order to maintain this industry's competitiveness and guarantee future value creation both within Germany and Europe. "These measures are a critical step," Economy Minister Robert Habeck stated in a press release following a Wednesday meeting in Berlin with representatives of the industry.

Plan also aims at reducing dependency on China in critical components such as permanent magnets. More than 90% of these components currently originate from China. The ministry stated that the industry would develop a roadmap by the end of the year or in early 2025 to reach this goal.

The German government intends to use the existing EU tools, like the Foreign Subsidies Regulation, and traditional trade protection mechanisms, such as antidumping and antisubsidy rules, to ensure fairness in competition.

Beijing and the EU are at odds over the largest wind energy market in the world. In April, the European Commission began an investigation into whether Chinese firms are receiving unfair subsidies.

Experts in the industry say that the use of Chinese wind turbines will be necessary to achieve the EU's renewable energy targets for 2030. Brussels estimates at least 37 GW of new wind energy must be added each year, compared with the 17 GW that was added in 2023.

Europe is aware of the past, where foreign competitors heavily subventioned key industries, and it is determined to prevent a similar result in the wind industry.

(source: Reuters)