Globalization in the wind energy industry: contribution and economic impact of European companies

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Globalization in the wind energy industry: contribution and economic impact of European companies

Highlights

The globalisation of the EU wind energy industry has brought clear benefits to the EU economy.

EU manufacturers have kept the majority of jobs in the EU despite their internationalisation.

Localisation is key in order to succeed in large foreign markets.

China is evolving into a manufacture hub for wind turbine components.

EU developers have expanded into other markets much more significantly than their competitors.

This paper explores the globalization of the wind energy industry with a focus on the contribution by European companies and their economic impact in the global wind energy sector.

The global wind energy industry is nowadays a tale of two worlds, China and the rest of the world. In the last five years, China installed between 37 and 48% of the annual world market, and it is all but closed to foreign companies. Consequently, Chinese manufacturers captured between 38 and 47% of the world market whereas European reached between 41 and 50%. European manufacturers led in the rest of the world, serving between 73 and 82% of that market. They localise production and supply chain in the main markets (e.g. India, Brazil, US) or in countries where producing for export is cost-efficient (e.g. China, Mexico). Turbine manufacturers enter new markets through joint ventures, technology licensing, establishing wind farm developing subsidiaries, facilitating access to finance, or by acquiring a local company.

Manufacturers help improve the capability of their suppliers and take them to serve new markets. Still, European turbine manufacturers maintain important manufacturing, sales and R&D centres in Europe, where they keep major procurement, supply chain and employment thus significantly contributing to its economy.

European developers also expanded into other markets, sometimes by acquiring and strengthening a local developer (this was generally the case in the US), sometimes by starting a subsidiary from scratch. They have been particularly active in the US and Latin America.

The European wind industry is a success story of worldwide reach that attracts jobs and growth for Europe. In order to support that this will continue to be so in the mid- or long-term future, the industry needs the support of European and national policy makers with consented, well-targeted actions.

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