Germany moves to strengthen domestic wind power industry

By Riham Alkousaa

BERLIN (Reuters) -Germany is planning state guarantees for wind energy production, it said on Thursday, as part of a package of measures to boost its wind industry amid concerns from European governments and companies over Chinese firms gaining momentum in the sector.

Berlin will expand the scope a KfW state bank program for sustainable transformation to include the guarantees, the economy ministry said, as around 16 billion euros ($17.34 billion) in guarantees are needed for a production ramp-up by 2030.

The measures will also expand the scope of companies that must meet energy cybersecurity regulations to include all those with access to a power generation facility.

A spokesperson for the ministry said the measures will start being implemented immediately, with plans to discuss the initial results in early 2025.

We must continue improving conditions to keep this industry competitive and ensure future value creation within Germany and Europe. These measures are a crucial step,” Economy Minister Robert Habeck said in a statement, following a meeting with industry representatives in Berlin on Wednesday.

The plan also aims to reduce dependency on China for critical components like permanent magnets, of which more than 90% currently come from the country. The industry will develop a roadmap to achieve this by the end of this year or early 2025, the ministry said.

The German government plans to use existing EU tools like the Foreign Subsidies Regulation and traditional trade protection measures, such as anti-dumping and anti-subsidy regulations, to ensure fair competition.

Tensions are high between Beijing and the EU, the world’s largest wind power markets. The European Commission launched an investigation in April into whether Chinese companies are benefiting from unfair subsidies.

Industry experts say the use of Chinese turbines is inevitable to meet the EU’s 2030 renewable energy targets. Brussels estimates that at least 37 gigawatts of new wind power must be added annually, compared to the 17 GW added in 2023.

However, Europe, mindful of past experiences where key industries were lost to heavily subsidised foreign competition, is determined to avoid a similar outcome in the wind sector.

($1 = 0.9229 euros)

(Reporting by Riham Alkousaa, Editing by Rachel More, Kirsten Donovan and Jan Harvey)