What did we really learn at WindEnergy Hamburg? Joel and Allen offer more insight and perspective from the show and say the US has a lot to learn from its European wind counterparts. But with those challenges, they see major opportunities as well. What can US companies learn about structuring operations, providing solutions, and other things? Of course Siemens Gamesa and GE have made headlines recently, too.
With Siemens’ layoff of 2900 employees and GE’s 20% reduction of staff in onshore wind, we discuss how the industry may respond. GE Renewable Energy’s CEO already responded – by resigning – and last week, Siemens Gamesa replaced its CEO of onshore wind.
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Uptime 134
Allen Hall: Hello, Hello, Hello everyone. We have a great show for you. This. We just got back from Wind Energy Hamburg. So we’re gonna have a, a big review of all the sites and sounds from WindEnergy Hamburg, and the things that
Joel Saxum: we learned. So one of the other things we’re gonna dive into this week is some of the big news from some of the OEMs.
A lot of layoffs happening. So ge doing some layoffs some executives leaving Siemens Gamesa as well, and what that means to the general wind.
Allen Hall: I’m Allen Hall, President of Weather Guard Lightning Tech, and I’m here with my good friend from Wind Power Lab, Joel Saxum, Rosemary’s on maternity leave, and you are listening to the Uptime Wind Energy Podcast.
All right, Joel, we just got back from Wind Energy Hamburg, where we had a really busy show, and I, I just wanted to get your thoughts on what you saw at the show and some of the new technology and impressions from, that big conference.
Joel Saxum: Yeah. You know, I’ve been around multiple industries of, of trade shows for the last 10, 15 years, and I have never seen one that.
I think the preliminary numbers, we saw 30,000 people the size of the show and all the different conferences and, you know, in areas. I mean, it was, Hey, I want to go over to the Danish pavilion and it’s a 10 minute walk across this place. Yes. That’s how big it is to get there. And, you know, us as Americans as opposed to the Europeans not used to walking as much.
So that, that, that factored in. But you know, just, just to kind of give the the listeners and, and the YouTube viewers here, just a little bit of a thought. This is how it was. Sometimes we are carrying, go somewhere to get a cup of coffee to one of the little, you know, canteens or whatever, try to walk back to go have a meeting or, or go to a booth or chat with someone else.
And you had to specifically pick which aisle you would walk down. To avoid the people. So you didn’t spill your coffee. That’s how busy it was. Yeah. So great turnout in Hamburg for everybody that was there. And it was the same from everybody I talked to. Every busy or every booth was busy. I had couple of times, you know, I tried to talk to some of the, the guests we’ve had in the show in the past, you know, the rope robotics guys and stuff and Yeah.
And some of the other cool tech companies, Blade Bug and whatnot. And he would walk by their. Four or five times, and they were busy every time and you didn’t want, you know, they don’t wanna barge in. They might be talking to a customer who’s actually gonna, you know, buy some services. So I don’t wanna, I don’t wanna mess with that.
But then the, the conference was so big that you didn’t, after walking by a few times and checking in, you didn’t have time to go and find them again and walk by because , you had other stuff to do. You know, I know that I personally, we were there I was there in Hamrick from Monday through Friday.
I think you were with Swell Allen and on the floor. Yeah, on the floor the whole week. And I never even made it into the, A Halls. I didn’t even see the, the, the four of the halls there. So it was, it was crazy. It was big time. The.
Allen Hall: Key points I saw out of Hamburg cause I was trying to summarize it on the airplane ride home, which was, seemed to be eternal
All those long airplane rides home just never seemed to end. There’s, there’s a renewed focus on cost reduction. Yeah. In terms of services provided. You, the operators are really concerned about reducing their overall expenditures and simplifying a lot of the data that they’re getting in and understanding what’s happening with the products they have purchased.
And the, if you walk down the highways of the convention, you just saw application after application after application of. Learn about your blades. Let’s, let’s fix leading edge erosion. Let’s understand the structure of the blades. Let’s monitor the blades. Let’s have a continuous monitoring system. Let’s, let’s just steer the wind, turbin into the wind, , those, those kind of solutions.
They were everywhere. And the drone inspections were everywhere. There was every company. I lost track. Right? Yeah. Every, every company, every country has their own spin on it. And now with offshore, did you see some of the larger drones that are payload carriers
Joel Saxum: for offshore? Really cool. Really cool. There was one that was, it was bigger than me.
It was taller than I. It’s
Allen Hall: bigger than a car. Yeah. Yeah. One of it was, was huge, right? It was. It was almost airplane. I guess it would be an airplane in some you go, it was pilotless. But yeah, it would take hundreds of kilograms, I’m assuming to an offshore sites and to think about those things being in place as a,
Joel Saxum: you probably needed strike.
Hey, that drone probably would expect it .
Allen Hall: That drone, that size is gonna get struck. It will at some point.
Joel Saxum: You know, there’s a couple of things that, that it shines. So when you look at something like that, you see the, a bunch of little micros. They make up a macro. Yeah. And the part of that macro is I see it as twofold.
So one of them is you know, we saw the absence of some of the big oem. Right? Yes. So the GE wasn’t there. I, I can’t say that Bests wasn’t there, but I didn’t see them there. So when you see the OEMs and you constantly hearing in the news all the, We wanna cut costs, we wanna lower the, you know, the levelized cost of energy, we’re gonna bring it down.
I saw an article this morning, I was reading some LinkedIn stuff that said you know, the problem with our turbines, this was from one of the OEMs or our, our business model is that our turbines aren’t expensive enough. To fulfill the business model. So you’re starting to see that, that cost reduction thing.
And then, and then I know there was a focus on, at the event from the conference creators of what does your supply chain issues look like? What are your supply chain issues look like? So that was a big thing. So lowering cost, supply chain issues. But seeing what, what you’re talking about with some of these.
Companies there, reducing cost efficiency, optimizing things that is, I’m gonna go with twofold, right? Cause one of ’em was the, the lack of the OEMs and some other things. Everybody trying to reduce costs. But there’s a difference. And this is what we see in Wind Power Lab all the time as we’re dealing with people on both sides of the pond.
European operators, European companies, European wind companies tend to lean more towards being prudent operators and doing things in a structured and meticulous manner. Think German engineering, you know, everybody says Mercedes-Benz is fantastic. You know, think that that same, that, or Volvo or something like that, think that that same mindset also goes into their daily operations.
So they’re consistently thinking and wanting to understand their assets and how they’re. At, at a little bit of a higher level than we do in the us. In the US a lot of times it’s like, build it, turn it on. We, we’ll figure it out as it goes. You know, we have, of course everybody has programs and, and policies and procedures in place about how they do things, but there’s just not as sure as developed or as stringent as they are in Europe.
So you saw that more, It was a European show. They, they, they call it the global onshore and offshore energy, but I, I think you and I can speak the same that as Americans, we. Usually being in the majority hearing our American English, but over there it was not so much. Right. No. Not a lot of American companies, not a lot of American people, no.
So no, a surprising lack of American companies. Would’ve loved to see some more of that, bringing that global thing back and forth. So, Right. Again, i, I kind of shift back into we were having strategy sessions here this week talking within our company and talking about how do. Or how are we not, how do we, but how are we bringing that prudent operator mindset to the US to to, you know, the goal is to lower the levelized cost of energy in all the wind projects.
Keep them operating efficiently. Yeah. And you can see the European operators are doing it a little bit more proactively versus reactively like we are in the us. So, and that was shown at the show. It’s shown by the markets will, will always depict what’s, what’s going to be, right. So if the OP or the opportunities to create a business to optimize are in Europe now As the, as the, the cookie crumbles.
I believe you will see that hopefully in the next 1, 2, 5, 10 years in the US start to trickle.
Allen Hall: Sure, and you’re right about the Americans, how few there were. In fact, I think you commented to me at first that if you walk around all the different conference halls, you see the Danish pavilion and there was like a hundred companies inside of there.
Yeah. In the Finland, Scotland, Norway, The UK had a big exhibit, and then America didn’t have a presence really to speak. Yeah, 3M was there, which I is an international company, and then there’s a little bit of US companies. But in, you’re in total, you think, Well, the, the vast majority of wind turbines in the near future are probably gonna be US based probably, Yeah.
But the, the American companies didn’t see, either they didn’t have the funding to go to that conference or they didn’t think it was worthwhile. And
Joel Saxum: they should have been there . They should have been there. Should have been there. I, I mean, but it also, it also shows us something that we know intimately as well, Alan, is that there isn’t very after market or supporting companies besides, I mean, there’s a lot of blade companies and service companies and stuff like that.
They don’t really have a business over here. That makes sense. But I mean, there isn’t a, you know, someone doing aerodynamic upgrades or l e like that’s not a big thing. That doesn’t come from the US right now. It’s come from, it has come from Europe, so it makes sense there. But at what we’re saying here is, man, it would be nice.
We started to see some more of those startups and some solutions coming from, from the US because there is a massive local market for it. I mean, that’s 71,000 in counting turbines, right?
Allen Hall: Yeah. And with the offshore picking up, you’re gonna have larger issues of maintenance maintaining all those wind turbines.
Now I, I think one of the things I’ve noticed having spent a little bit of time on the interwebs before going over to Hamburg, was I was starting to look at what the US startups were in. Surprisingly, they’re almost all software based, Software based. It, it’s like there’s a Silicon Valley mentality.
Joel Saxum: Yeah, I would say twofold.
I would say there is a land grab to be had in floating offshore wind right now. So it’s a lot of, lot of those ideas, but that’s a global thing. But software, Yes. And software. And I think software, it’ll, it speaks to the, you’re exactly right in the silicon value. Anybody that wants to do a startup and make some money mm-hmm.
And get some investment software is, is where people are always looking. So, So that makes sense. But the, the floating wind, that was a big conversation at the show that I heard and had a few times because okay, right now we know offshore is a big play and it’s going to happen globally, but offshore, fixed bottom, the market’s already dominated.
We know the players. Yeah. Right. Yes, we, we know the turbines. We know, we know there’s avesta, the Siemens, the ge, Well, and Siemens and GE can box it out for whatever. But we know the models, we know the turbines, we know how we install them when we move forward. Now there is floating offshore wind coming and we have talked on the show with Rosemary and, and, and, and the two of us about, you know, vertical access wind turbines in this turbine and this turbine platform.
And this is such a spar. Is that the X one wind? Is this, is that, So there’s some of those companies coming from the US which is nice to see. You know, I know there’s a couple of Houston based startups looking at some of those things. But it’s a land grab, right? Nobody has settled on. And this was the conversations over there.
Nobody settled on what is the, what is the one, And I think there’s an opportunity in offshore floating wind for not to be the one or the two, or the three. There might be the 10 but it depends on local content the ability to produce things and then where you are, right? If they’re gonna throw some off the coast of California, you may not have the same model of the, as the coast of Norway or the coast of France, or you know, wherever other deep water locations there are.
So, It’s, that’s a really exciting to follow especially for, you know turbine nerds like ourselves. So , we’ll see what happens. There’s gonna be somebody that pops forward, but yeah, that was, that was a big, big concept there as well.
Allen Hall: Well, the, the, the ratio of offshore to onshore at the conference, I thought was about 20% offshore in terms of just number of companies to 80% onshore.
That’s what it felt like to be just walking around. I will say offshore was sort of segregated in a particular area there. Yeah, there were a lot of people there. in the offshore space. Yeah. Just because it’s a massive, massive things Right. The ships are big. Yeah. The wind TURs are big. , Everything’s just bigger and it seemed to attract a lot of attention over, over in Hamburg.
Joel Saxum: Well, they, the difference there from what you see in the US is very Tin ACP Conference in American Clean Power Conference in the US Yeah. Floating or not just floating off, sorry. Offshore is coming on. It will come on strong, but the vessel companies aren’t here in the support companies aren’t here yet.
Mm-hmm. , the companies that are, that we saw in Hammer and it had a kind of a section like the b. Four. Five. Five or something. Yeah, yeah, yeah, yeah, yeah, yeah. They were a lot of big vessel companies in offshore companies. I saw some friends that I met from my past in oil and gas offshore, but it’s because they support the, They support the wind network, right?
They support the wind industry. But you see, you know, the vacs and the demos and stuff like these big vessel companies, and not only are they in wind, but they’re in everything else. So they have the money for these big booths, and you walk in and you see the D, the booth or the Pascals booth, and. Big, bright colors, fantastic looking things, so they have a presence as well because they’ve got, their marketing budgets are a little bit bigger than ours.
But yeah, it was, it’s, it’s a cool thing as, as to see what’s coming as an American that we don’t have the offshore wind quite yet. You know, like I, I work for a Danish company, so we’re, we’re deep into the, the offshore wind territory. So I, I have a lot more exposure to it as a win professional than a lot of people in the Americans do.
So I’ve seen a lot of this but it’s exciting to think that here in a few years, As the wind industry grows in the US that that may be coming as well to our side of the pond.
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Allen Hall: So larger American companies that were over in Hamburg seem to have wind as only one piece of a larger portfolio, Drone based being a really good example of that, where they’re doing solar inspections, industrial inspections, utility inspections, and, and wind obviously is one of the things that they do well.
That. Create portfolio provides some stability there. Then it seems to be a common theme in the American wind energy focused companies is you got this little narrow window of time to do things. There’s like a six month window. Then you got the six month off time. You have the cyclical arrangement, so you have to be.
Broader where when we, when I looked at European companies, they didn’t seem to have that same perspective. Not say they weren’t doing those things, but when they were at that show, they were selling wind and that was the focus of their booth was just win, win, win, win. Where American companies tend to be like, We can do anything , you have a job, we can probably do it.
Is that just a difference in mindset or is that just the way the economies are set up? What, what’s driving the American companies to to, to go vertical like that so fast and to, and to cover more areas? Is wind just not as important as the United States as it is to, to Europe at this point?
Joel Saxum: I think it’s it’s a, it’s cultural, a lot of it, right?
So in, in America it’s capitalism, you know, the free market . So we’re, we’re gonna take and grab and make as much money as we can anywhere. Now, sometimes if you, if you get an influx of cash and you have good plans and you can hire the right managers, you can do that. Sometimes scaling very quickly into a lot of different verticals is a death.
Right. That doesn’t always end up well. In Europe the companies tend to be more focused, more tructure driven, more process driven slower growth. I think you can just, again, you can look at the, the economies, I think. So, I think it’s more of a cultural thing, but I mean, as well, if you think about this in the us while our wind industry is very large a lot of it’s localized.
So you, you know, people that are in, in. I, I’m from northern Wisconsin. Most of them have never even seen a winter turine. They don’t even know they exist. They’re like, ah, those, those, those things out there, you know? So, but in Europe it’s such a part of, they’re, it’s more mature. The industry’s more mature, right?
Sure. The industry’s been around for in, you know, like I’m sitting here right now in Copenhagen, The Denmark has had offshore wind farms for 30 years. They’ve had onshore wind farms at a, at a utility scale since the 1970s. So it’s just a mature, more of a mature concept where it’s not like, Oh, let’s slide into wind, like in the US and we could try a little bit here.
It’s, here’s that we are a wind company because we know that this industry’s here, it’s established, it’s here to stay. We can base a whole company on this thing, right? Also, some of it driven by legislation, right? Eh, you have to inspect a German turbine every six months, the LPs system by ropes, by law, right?
Same thing in France, but every, but every, I think France is every year or two. So the legislation also forces them to, to do things and, and likewise, kind of speaking about a few minutes ago, the difference in the culture of the operators and how they’re a little bit more specifically. Trying to make sure everything’s optimized and their, you know their budgets are, are, are correctly aligned with exactly what they need to do.
And a little bit more process and structural driven kind of drives not only individual business models, but then again, micro versus macro. If the individual bot business models all kind of look the same, the industry starts to look the same.
Allen Hall: Hmm. Yeah. And I, I think key takeaways here for American companies what are your thoughts, you know, what, what would you say if you’re an American company involved in wind at the moment, what would you pull out of that Hamburg show?
Joel Saxum: I would say to, to learn from some of the, the European companies. To me, I refer to the term, and I’ve been guilty of it in business adventures, in past of flock shooting. If you’ve, if you’ve ever, if you’ve ever. If you’ve ever been ducker goose hunting and there’s a ton, ton of them in the sky, and you get excited and you just start going boom, boom, boom, boom, boom.
When you start shooting at all of ’em, a lot of times you don’t get any of ’em. Right, Right. So my, my advice would be pick out one ducker, one goose, knock it down and do it well. Right. So there’s, there’s some companies in the US that I have that we’ve seen, you know, in our travels of course together and then in, you know, market research and stuff that are doing great, great things.
On individual markets. There’s some that are doing great on, on large markets, but for the most part, what you see is, or what a successful path looks like to me is you get into a sector, you do one thing really well until you can build a base of a company. And then if you want to expand, go ahead, put the right people in a plan in place and do it in a structured manner.
Don’t just, we’re gonna do wind and, and decide you’re gonna be the end all, be all for everybody because it’s usually that doesn’t end up.
Allen Hall: And yeah, I think you’re right on that. And I think going to conferences like this HO conference and there’s others around the world is super important to get a sense of what’s happening in the wind industry.
Without that, I think you lose touch as to where the future lies because you’re right, you, Europe is so far ahead of America at this point. Yeah. We’re just following and it’s good to kid get that downward flow and see what’s happening in on the real hotspot over in.
Joel Saxum: Yeah, so I think one of the things that I would, if I was, if I had the budget for it, of course that’s a big thing.
But if I was a, a, a wind company in the Midwest and I was, you know, doing a million dollars worth of year of work and I wanted to see what the next step was or, or which direction we should go or what’s out there, I would take the trip to one of these larger European win conferences just to see, I mean, because you never.
What thing you could ex discover there. This is one side, right? You never know what thing you could discover. That could be your edge back in the us You might run into a new L eep coding that nobody’s using in the us but it’s just changes your world. So that might be one, that’s one side of it, but the other side is just to see what the market is doing.
What, what these other companies are doing is a little market research project. I think that is, there’s a lot of value in that and I, I’m a little bit different than a lot of Americans, American companies or American business people because I’ve worked. International businesses and off oil and gas and wind and stuff.
So I have a better picture or I enjoy the picture of Seeing what others are doing and bringing that back as opposed to we can do it better cuz we’re, we’re Americans. That that happens sometimes too. . So I, I encourage people to spread the, spread their eyes open a little bit. Take the, take some of the this off and, and look at that.
And I think that they’re, it’s the same thing. We talk about encouraging this offshore wind. Like we don’t need to recreate the wheel, just listen to our, our counterparts that have been doing it for a long time.
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Allen Hall: All right, Joel.
With any conference, all the good news happens. Before the conference or during the conference, you, you sign big sales deals, you announce a new wind turbine, and then after the conference is when you unload all the bad news. There’s been a series of really bad news pieces coming out and it’s mostly, I think it’s mostly US based.
It’s something European based, but I, it feels like it’s, it’s US based at the moment. Siemens G Mesa is gonna lay off about 2,900 people and cause they’re seeing a market downturn, and I think that’s mostly related to the US installations and new wind installations in the. It seems me where that’s going.
And in the head of Siemens, sc Mesa onshore left today that they were, today were recording. That’s, that’s news. That seems to be a pretty good shake up there. I know they’ve had some trouble with the five megawatt machines and they’re trying to resolve that and. I guess they’re, they’re reshuffling the way they organize their businesses.
It sounds like Siemens CESA is trying to create more regional based businesses, like, let’s handle Europe one way. Let’s do America another, let’s do South America. So that, that, that’s an interesting development. And then GE announced today, this morning that they’re reducing their US onshore staff by 20%, and the head of ge.
Renewables over in France. I, it sounds like, resigned yesterday from just some LinkedIn news we saw. So all of a sudden we’re just seeing this massive, what I call, massive downturn, and we see numbers like 20%. That’s, that’s a, that’s a big number of reductions and that does not bode well, . Joel, what are your, some of your thoughts just seeing these things happen sequentially in, in a, you know, in the last five days?
Joel Saxum: I, I think that of course, like you said, it’s the bad news after the big conference. Nobody wants to be put that out beforehand and be the, the talk of the town, right? 30,000 people together in one spot talking about what’s going on, right? But I, if you look at big business as well, wind, renewable energies aside, they go through cycles, right?
So, but some of this, I believe is. It’s reactionary from what the past cycle looks like the last few years with the IRA ending in the us. Of course, we know it’s a huge market. The the profitability of these companies has taken a. So once soon, as soon as you change CEOs or what the, the goal of the ceo, It’s not usually at a 40,000 person company.
It’s not usually like we, we should make sure that everybody has the right amount of days off their first thing. It’s not that , the first thing is make us profitable again. Right. Right. So when you ha when you’re forced to that, sometimes companies use things as an excuse. I know there was a lot of companies used Covid as an excuse to do layoffs.
While that’s not a very fun reality, it’s a. So I think that some of these renewable companies have used this downturn that happened, you know, during covid and then with you know, as the, the IRA bill hadn’t been passed as this, this downturn. So now, right, they’re looking at the, they’re looking at the trailing edge.
If they were, if, if you’re looking at what’s going on next, they’re gonna come back up, but they’re gonna come back up. Yes, they’re gonna come back up healthier. And that really bodes well. Like so when you, when you talk Wall Street guys, and that’s where all this stuff lies. Lies at. 20, you’re laying off 2,900 workers.
Say this is the Siemens Scsa case. You’re laying off 2,900 workers as right as you’re looking to be getting more sales. Cuz we’re starting to hear that kind of whispers in the market like it’s been Right. You know, a month since these things in past, I’ve been talking to some due diligence people and stuff.
They’re like, man, The requests for tenders are starting to flood in for consultants and advisors on these new projects. Yeah. Yeah. So that’s gonna come with a lot of orders for these guys. And if they’ve just laid off, they won’t say, We’re gonna talk dumb numbers. Right? Say you were at a hundred dollars and you just laid off and now your, your spend is only $80, and then there’s a bunch more orders coming in and you’re gonna go to 110.
Dollars of profit, now all of a sudden you’re up 30 some odd percent versus what would’ve been 10% and it looks good for, for all the stakeholders. So I think there’s some shakeups here because I think, but I also think there needs to be what we’ve been hearing for a long time is I read an article again this morning from an oem.
Our prices are not in line with what they need to be in the market to. The costs of building them and then that you have these OEMs that are making, trying to make the money off the service contracts, well, that’s not a good way to do business. You know,
Allen Hall: well, is, is it driven by the, the realities of what components are costing?
You know, say a ge so ge, you know, sub out a lot of the components for their wind turbines. And it seems like the discussion from GE and some of the announcements they’ve made as like, our supplier costs are going up and, and we’re getting clamped from the operators and what we can sell these things for.
So we’re kind of stuck in the middle. We’re getting squeezed. Mm. Now the discussion on LinkedIn yesterday was really fascinating because there was just a lot of going back and forth by people sort of in the periphery of the win business saying, why are, why is GE losing money? Why is Siemens kamasa losing money?
Why is Leonard just establish a baseline for the pricing and just every, just raise of pricing? Kinda like airline tickets goes, you know, when one airline raises the prices, all the other ones follow. And they kind of go up that ladder, right? So they’re all marginally profitable. Why are they not doing that in wind?
And I, I think the answer is because there’s other competitors in that marketplace besides sort of the big three or four. And they’re feeling that pressure from underneath. Did you, I kind of, I sense that at, at the Hoberg show actually, that you feel like, okay, they have a number of Chinese manufacturers, they’re, they’re, they’re getting pretty good at what they do.
Mm-hmm. , do they feel that pressure of the, the, those Chinese lower cost wind turbines entering the European market, possibly entering the United States market and they, the ge of the world, feel like they can’t race prices because there’s this underlying presence of. I’m sure from the operators, Hey, I’ll just buy a wind Turbin in China.
Is, is that the scenario
Joel Saxum: scenario? That’s the, that’s one of ’em. I think that’s the shark. One of the sharks in the water, right? Yeah. Just kind of circling there like a, you know, you want to think, We had this conversation actually, I think when we were in hammer with a, with a group of people about, When do we believe we’ll see Chinese manufactured turbines popping up in the US?
And I think it’s, it’s all dependent on the conversation around price point. One of the numbers I’ve heard is one of the numbers we know is onshore million dollars of megawatt to install a turbine, right? One. And one of the numbers I’ve heard is 300,000 megawatt to install a Chinese. Well, that’s not a little bit of money , that’s a third of the price.
Right? Right. So, you know, I love my GMC truck, but if there was another truck that was just like it and it was a third of the price, not, you know, 10, 20%, I’d probably stick with my gmc, but a third of the price that might get my head turned. So that’s one of them. And I also, but I also think it’s, there’s a, another conversation around power generation cost.
So if you are a utility, And you have stakeholders to answer to rate payers and whoever else. If putting in the renewable energy development all of a sudden costs too much, well then you’re just gonna build another natural gas plant. And I don’t, Yeah, and I’m, I’m saying that if that’s, that’s armchair math and armchair thought, so don’t take this for granted.
But that’s gotta be another reason why they can’t get too like you. Charge more than what it would be because ESG goals only go so far in a capital market, right? If it’s controlled, if you’re in a country that’s controlled by the, you know, more legislation, government stuff, you have to put in renewables.
That’s one thing. But it, like I said, like I said, ESG goals only go so far in, in a capital market, right? The dollar is gonna eventually rule off where you can get away with it, even if it’s a little bit higher. But once it gets to a point where it’s substantially higher or transparently higher, then people can be.
Just build me another gas plant just right. That’s
Allen Hall: a thought. That’s, No, that’s, It’s a very good thought because I was doing some research on it this week, and that’s one of the issues that came up as well. Wind turbines are competing against solar, right? And they’re competing against natural gas, particularly in the United States, that if, if it costs too much to put a wind side in versus building a gas site, then what are we doing?
Right? And you, and you’re right. At some point the, the accounting starts to take place. There’s least so much you’re gonna be able to do. You wanna have a, obviously a diverse portfolio, but you’re, you’re limited your, your price cap limited. So what, what are the OEMs gonna.
Joel Saxum: Yeah, your, your price cap limited here also kind of got, you know, with renewable energies.
Why? While we work in the industry and we, we see a huge future for it. It’s lot, a lot more difficult to install from a permit standpoint in a yes, community buy-in stand, but there’s a lot more headaches around putting in a hundred turbines versus building a, a plant on 40 acres. So that’s, that’s, that’s another thought in there’s an intrinsic.
Issue there as
Allen Hall: well. Well, Siemens Game has been making that ar argument for a number of months now, and I, I saw, I think it was during the show, they’re making that same argument, had Siemens CSA was saying in Europe, Look, guys, I know you, everybody wants to have wind energy and that’s fantastic. We love that perspective, but the permitting is killing us.
And that, and also the United States bit, which is their, their operators are paying billions of dollars for these sites. You’re killing us because all the operator money is being paid to the US Federal Government and these leases, and we, the OEMs are getting pennies. That doesn’t seem quite right to us.
And that, and that’s, and that’s a, that’s a generalized complaint. I, you know, I, I’m not so eloquent on the arguments here because there’s a lot of nuances to it, but I don’t think the argument is really top level wrong. I think that that is most likely correct and we we’re seeing it in the United States right now.
The offshore projects in the United States are held up because of permitting issues and regulatory issues, so a lot of projects were getting delayed. We saw some news articles about that, and we’ll talk about in subsequent episodes, but some of these projects are getting delayed year or two and the 20, 30 dates going.
Not gonna
Joel Saxum: be there. That’s, that’s not moving, It’s not moving anywhere.
Allen Hall: Yeah. Right. So you’re talking about basically, you know, when you had a year or two buffer, or 2028 was kind of the number, now we’re up against 2030. Like we’ll be putting ’em in in December 30, 30 30 first December 32nd . Yeah. On, on, on, you know, to get to that 2030 goal.
And, and that is in most part related to federal regulation and state regulat. Again. I mean, you think those little things don’t matter to a big huge company like GE or Siemens, GA Mesa, but they matter tremendously on sales. Yeah. Cause you can’t sell what isn’t
Joel Saxum: permitted. We, we were talking to someone about that.
I was kind of, I was complaining about the, the processes and stuff in the US and why we can’t get the things done. And we mentioned some of the port facilities running at all these different barriers and stuff, and they said, Well, what’s a, what’s a long delay? I was like, Man, sometimes these things are like, Hey, plan.
2020, and they won’t, and this is onshore. They won’t, they won’t pour their first foundation until 2024. And they’re like four years. Like, yeah. They’re like, That’s nothing. The guy was telling me, he is like, I’ve been looking at this wind farm for a client, and it’s been 10, 10 or 11 years. He said, I’m gonna tell you how long it’s been.
They’ve changed the wind turbine model three different times because they went out of production during the process. I was like, Yeah, Oh, that’s, that’s a problem. That’s a big problem, right? Yeah. So,
Allen Hall: And we’re seeing that now on offshore when there’s some announcements and we’ll talk about in subsequent episodes where the operators are talking about getting bigger turbines.
They’re saying, we’re gonna take a pause because we’re looking at some, some. Instead of looking at 13 to 15 megawatt machines, we’re looking at 17 to 20. So if we just wait a year, we’re gonna get to 17 to 20. Well, you know, that’s a massive improvement on productivity and the amount of energy you’re gonna produce.
So those production tax credits start to roll in a little bit. Just do the numbers like, Yeah. Okay. That makes a lot more sense. But there, there kinds a point of like, we need the damn energy. When are we gonna get the energy up online? And who’s gonna, who’s gonna call them on it and say, All right guys, yeah, I know that there’s always greener pastures somewhere else, but we gotta go.
And we haven’t seen that push yet. Even in the Hoberg show, as much activity as there was. So you didn’t feel like there’s this. Push, I wanna say politically from the governments, from to, to finish these projects. Mm-hmm. , and that’s not universal, but I think in United States, I think that’s pretty evident because it’s so little activity.
And on the American companies over in Hamburg, nonexistent for the most part,
Joel Saxum: you know, from the American side, this is what I’d like to see. One of my biggest pet peeves in, in business and in life in general, is when people say, we’ve got this issue, this issue. This is this and this issue. And we’re mad.
Cool. What are you gonna do about it? So, so like the same. Yeah. So the same thing in in, in leadership in a company. If you want something done by leadership, what do you do? You, you come to them with a structured presentation. Here’s the problem. These are, this is what we would like to see, and these are two possible solutions.
Pick your middle one, that’s the one you want, right? And give them the solution. So I would like to see, we talked about 87,000 new IRS agents to collect taxes in the. Yeah. Can we, can we get rid of 7,000 of them and turn ’em into people that will get a permit done? So, like, so ACP as our, as our big ACP is at the, you know, they’re going to the White House, they’re doing all these things and they’re doing, they do a great, great job of representing the industry.
I believe. They could do a little bit better, but you can always say they could do better. I would like to see a committee a committee formed in ACP to put. Doctrine together to hand to the administration to figure out how to get these permits done faster. And maybe they’re doing this right now.
Yeah, I don’t know. I’m not, you know what I mean? But that advocates of green energy from every angle going to our government and saying, Guys, this is what our, one of our big problems and our barriers to getting these things done, here’s the solution that we propose. Let’s go forward with this. And I don’t, I don’t know if that solution is 100%, but it’s.
Allen Hall: and you would think that the politicians locally, particularly like the GEs in the United States, which is, you know, those layoffs are gonna affect people near me, That’s gonna be this sort of Schenectady, New York the South Carolina people, the, all the consultants and that, that feed those, those, those sites are really gonna get hammered on these on, on this downturn.
You think that the politicians. Be listening to ACP a little bit and realizing like the, the bureaucracy they’ve set up is hurting the country. It just is and I know how to describe it. It just is. And if you think America is leading in win energy technology, you are wrong. And I, I’ve heard politicians say US is leading the way there is being in Hamburg, we’re not even close to leading the way , we are 20 years behind in some cases of even getting to the point of making some of the components that I saw over in, over in Hamburg.
Yeah. We’re just not there.
Joel Saxum: You’re a hundred percent correct and it’s, it’s more mature industry over here. The people, the general public believes in it more. Yeah. You know, even at acp, just, and I’m going to conferences and so this is a conference is a good way to get a view of an industry no matter what the economy is doing at the time.
Right. You’ll see it. So think about the size of, you know, the ACP conferences we went to last year, San Antonio, right. There was seven or seven or 8,000 people. It was nice. Yeah. But of those seven or 8,000 people and, and of those exhibitors, some of those exhibitors are European, a lot of ’em are European, a lot of ’em.
So not even all the, And so you see like all the. The polytechs, the these guys that, that are, these retrofit companies stuff, They’re all European companies, so they’re in over, over in our, so even our conference is mo mostly your partially European. Right. And it’s not the other way. Right. You go over there and it’s just, I mean, like I said at the beginning of this, this, this chat we to have today, Allen, it was mind blowing.
I have never seen a trade show that busy. And I mean, I used to brag about otc, the offshore technology conference in Houston. Yeah. Now that brings in a lot of. But I’ve, I’ve never had a problem walking down an aisle with a cup of coffee at OTC like I did here.
Allen Hall: Yeah, I was sick of the same thing. Cause we, we at, at one of the dinners we were having yeah, there were some late nights in Hamburg, but we, we were trying to figure out like where ACP fit into the scale of Hamburg.
And I think ACP would fit into one of the halls of the 11, one of the 11 hall that they had in Hamburg. Mm-hmm. . That’s what tells you. Yeah. Like one 10th, roughly. One 10th the size. Yeah. But that’s, we spent, But it’s, it’s a little backwards. Right. And. , even, even the Europe, I, I think this is probably a good thing and you see a lot of Danish companies, European companies establishing sites in the United States.
That’s smart. I think that’s really smart. And the time zone issue is always there. Yeah, they need to do that. Cause that, that’s where I think the future is. But are we going to see American Cup also sort of step up because in such a large country it’s, we just need a lot more people
Joel Saxum: to do this. You know?
Here, here’s a thought for you, Alan, as well. So you. . You have companies in the US you’re starting to see some conglomerations growing and becoming large organizations through m and a activity. And the one that like some that come to my mind is like the Pierce renewables family and Yeah, yeah, right.
And the T yon group and stuff like that. Yep. Most of them are focused on service companies. And now I know when you’re talking in the VC or a pe, you know, private equity space, a lot of times there’s a strategy there. We’re gonna, we’re gonna focus on a service company model, or we’re gonna focus on this or focus on that.
I wonder if at some point in time you might see someone with a lot of cash from the American side purchase a European company or two that is a product register company or a service company, right?
Allen Hall: Yes. I would think
Joel Saxum: that. There’s a great, there’s great value in it and it’s gonna be the ones, the right one.
And I, I keep thinking the the kind of the, the sexy cool ones. The, the robotics, the erroneous, the rope robotics of those kind of things that some, some, someone is gonna pick one of them up and bring them and say, You’re now a US company. But I, you know, I don’t have a crystal ball, but I would think that’s, some of those European companies are good stuff.
We’re gonna.
Allen Hall: That discussion actually happened. I was involved in a little bit of those and. There is a much more of a poll because as you, as we see, there’s really three places in the United States where there’s VC funding for renewables, Boston, Houston, and then Silicon Valley ish. Okay? Mm-hmm. . Mm-hmm.
There’s a big man, big draw to pull those companies somewhat out of Europe and put ’em in the Boston, Rhode Island area. Put ’em in Houston, put ’em in in California, where they can operate. Do some of, bring some of that technology over and get the wind industry up and running at the scale it needs to get running in the United States.
It, it wouldn’t shock me, and I don’t know if I talked to you about this, but the Swiss Consulate and so Switzerland actually has put a consulate in Boston just to bring new companies, particularly in renewable energy into Boston so they can get, get access to vc. A country has done that to Boston. Right.
I, I haven’t seen that from anywhere else, but I don’t, I think that’s a really good idea. In fact, they have, they have been at least aggressive in the last couple years. I mean, they’ve gone through Covid here, but that’s not a bad idea. And you, you gotta wonder if that model, This is the Greentown Labs thing.
Labs is in Boston, Houston. Right. Why is that? That’s where the VC money is for renewable energy. Right. You would think the companies, the. Have that new tech will be moving someone into the United States based on that’s where the draw is gonna be. But they have to be hesitant after Hamburg because I would be hesitant too, because we didn’t see a lot of American activity.
GE was not at Hamburg. LM Wind Power was not in Hamburg. Crazy. Right. They had people there. There were people walking the floor, but they didn’t have a site. And that just seems unusual to me.
Joel Saxum: Yeah. I think some of it is You could hear the conversation of fly on the wall where this big old Siemens booths, lot of spend, people all over coffee, you know, coffee baristas on there, and then be like, they’re laying off 2,900 people.
What is this? If you had, if GE would’ve had this big million dollar booth, you know, a couple years ago GE had a 90 meter blade flying from the ceiling in at Hamburg was, I mean, they. Money. That’s cool. And if you spent that kind of money Yeah. You spent that kind of money though, and then on the, the Monday after the show was over, you’re like, Yeah, we’re getting rid of, for 20, 20% of our workforce doesn’t look good to the industry.
Allen Hall: No, no. I, I’m wishy on that, but it just seems like there we’re at a very deep inflection point in wind. I think we saw it in Hamburg. I think we’re, we saw it at ACP and we were in San Antonio. We just didn’t realize. We thought ACP was the, was the coolest, biggest thing we ever seen. And it just got tred by, By winter Geo.
Yeah. Not even close.
Joel Saxum: Bad, Bad, Yeah. Yeah, bad. It was like, like me stepping into the ring with Mike Tyson. That was, it wouldn’t be, wouldn’t be a bad. I, I would say that the wind industry right now, from what we’re seeing in a lot of, and like I said, you and I talked to a lot of people in the industry, we have a pretty, pretty big net that we, we gather information from.
And I would say right now it kind of feels like the whole thing is trudging in mud and it’s not sure which way it wants to go. You know, it’s not sure if it’s gonna hop up on top of the mud in a you know, on a surfboard or if it’s gonna get pulled out by something and be on dry land here soon. But it just kind of feels like nobody.
Knows what direction it’s going. The, you know, the, all the talk and the speak is renewable, renewable, renewable. And that’s great. And it, I fully believe it will end up there. But the direction, how, how the money flows, what happens with the companies, it’s, and it’s a, you know, course of global problem. Of course, that’s what we’re here for.
We’re here to talk about it and understand it. So as we need more, we’ll share it.
Allen Hall: Yes. And we’re gonna have more to come. And then like we have, I think. Seven, eight interviews from Hamburg gonna be putting on those out. We’re gonna hopefully put out shorter pieces on LinkedIn and then have longer, the longer pieces as, as part of these episodes so you can hear what the thoughts were from different companies that we’re showing at Hamburg and get a sense of where that marketplace is.
And I, I, if you go back and listen to what was happening at ACP here, you could actually hear those, the differences in the tone. So it would just stay tuned, you know, keep listening to uptime because we’re gonna bring you some of the latest things that are happening in wind, not only United States, but also in Europe.
So it’s, it’s, it’s good to follow. That’s gonna do it for this week’s Uptime Wind Energy podcast. Thanks for listening. Please take a moment and give us a. Five star rating on your podcast platform. And be sure to subscribe in the show notes below to Uptime Tech News, our weekly newsletter, as well as Rosemary’s YouTube Channel Engineering with Rosie.
And we’ll see you here next week on the Uptime Wind Energy Podcast.
