Revival of Vestas Wind Systems in Colorado
Not long ago, two factories operated in Colorado by Vestas Wind Systems, the world’s foremost manufacturer of wind turbines, were struggling to stay afloat. According to the company’s chief executive, Henrik Andersen, they had “next to no orders.” However, a significant shift has occurred since the introduction of the Biden administration’s Inflation Reduction Act, which has invigorated the renewable energy sector. Vestas is now “running two shifts in the factories again,” and the company is facing challenges in training enough personnel quickly to meet the renewed demand, said Mr. Andersen.
Despite this newfound momentum, the wind industry as a whole continues to grapple with a range of challenges, including escalating costs. Following the election of Donald J. Trump, a critical concern looms—will this recent recovery be sustainable over the long term?
The renewable energy sector, particularly wind power, has experienced severe volatility over recent decades. The early 2020s proved to be especially harsh for companies like Vestas, which endured significant setbacks as the pandemic disrupted supply chains and inflation burdened them with billions in unprofitable contracts.
In response to these challenges, firms have taken measures to enhance their financial standing. By increasing prices and delaying the expensive rollout of larger turbines, they have begun to recover, although profit margins remain slim. This situation is precarious for an industry that must continually invest in new plants and cutting-edge technology to sustain the double-digit growth it has enjoyed in recent years.
Vestas, headquartered in Denmark, serves as a microcosm of the wind industry’s broader challenges and triumphs. Recently, the company announced a profit of 127 million euros on a revenue of €5.2 billion for the third quarter. While this figure may not be substantial, it marks a significant improvement compared to a staggering loss of €1.6 billion in 2022. “We have turned the corner on our turbine business,” Mr. Andersen confidently stated.
