Today, wind power accounts for just under 10% of all electricity globally, around the same as solar, recently overtaking nuclear power. 20 years ago, the figure was under 1%.
In that time, the sector’s leadership has moved around from Europe to the US to Asia, but one specialist European manufacturer has stayed in the leading group throughout: Vestas — a member of the global wind energy aristocracy.
This week on Cleaning Up, Michael Liebreich is joined by Henrik Andersen, CEO of Vestas, to discuss the extraordinary growth in the wind energy industry, the challenges it faces with rising interest rates and political hostility, and where the best place to build turbines is in 2026.
Together they do some myth-busting and answer:
Leadership Circle:
Cleaning Up is proud to be supported by its Leadership Circle. The members are Actis, Alcazar Energy, Arup, Copenhagen Infrastructure Partners, Cygnum Capital, Davidson Kempner, Ecopragma Capital, EDP, Eurelectric, the Gilardini Foundation, KKR, Mitsubishi Heavy Industries, National Grid, Octopus Energy, Quadrature Climate Foundation, Schneider Electric, SDCL and Wärtsilä. For more information about the Leadership Circle, visit cleaningup.live
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Henrik Andersen
And here is the thing, sitting next to a renewable person, chief exec of a wind company. Listen, I'm in favour of all energy sources, because right now the biggest challenge for Europe was we let the nuclear competence go because we stopped doing it. Paused. Today, we sit in a situation where 450 million people across Europe is importing 55% of the energy we are spending. That is dependency, but on somebody outside Europe.
Michael Liebreich
Hello, I'm Michael Liebreich, and this is Cleaning Up. Today, wind power accounts for just under 10% of all electricity globally, around the same as solar, but last year, overtaking nuclear. 20 years ago, when I first started talking about the inevitable rise of clean energy, the figure was under 1%. In the intervening years, leadership has moved around from Europe to the US to Asia, but one specialist European manufacturer has stayed in the leading group throughout. It's part of the global wind energy aristocracy. My guest today runs that company. Please welcome Henrik Andersen, CEO of Vestas, to Cleaning Up.
ML
Henrik, thank you so much for joining us here on Cleaning Up.
HA
Thank you. Thank you for having me. Excited by it.
ML
So, we're going to start where we always do, which is you describing what you do, the short version, in your own words.
HA
Thanks. I'm running Vestas as a chief executive based out of Copenhagen, but Vestas is a truly global producer of wind turbines. We have turbines in more than 80 countries globally. So, therefore, it's a really large size in the renewable space, but we are a true sole wind company. So, we are onshore, offshore, and we service our own turbines as well.
ML
And you will have heard from my little intro that I call you part of the aristocracy of the clean energy space.
HA
Yes, I think so. As I said, from my background, I joined Vestas under difficult circumstances back in 2012, beginning of 2013, because Vestas was in deep financial challenges. So, I joined the board as a non-exec director. It turned out the first year we were probably more executives than we were non-executives because, yes, we changed most of the executive team. And then in 2019, in May, I was asked by the board to be the successor to, at that point in time, my predecessor, Anders Runevad, who is now Vestas' chairperson. So, in that sense, I always tease a bit with Anders and me, we look at each other and say there's not much that falls outside the two of us to be blamed for since 2013 in Vestas. So, yeah, we know Vestas really well, both at good and bad times.
ML
And I believe I met you in those early days because I came to Copenhagen and spoke to the board. And it was just in that period where I think the bad things were happening and the solution was not obvious. But we'll get on to those cycles that you seem to have in the industry. Could we do the following? Can you give a thumbnail sketch of Vestas in terms of, okay, so we all know it's turbines. It's the big three-bladed turbines that are marching across the countryside to some people's delight and to some other people's horror. But give us a thumbnail of the organisation.
HA
Yeah. So, you can sort of say Vestas, we have had our 125 years anniversary. But in truth, over that Vestas was doing a lot of other things and right back and trace it back from the blacksmith days in Jutland in the western part Denmark. So, in reality, back in the 90s, part of the oil crisis back in 73, you sort of had people start thinking a bit more about can we use and can we do something with turbines and therefore the wind as a resource.
ML
And we had Henrik Stiesdal on the show.
HA
Yeah, no, it's interesting. Henrik Stiesdal I know very well. And of course, we have our own Anders Vedel. So, I think there's always a little bit debate around who was really the grandfather of wind turbines in Denmark.
ML
But that's interesting. I thought that it was a Stiesdal design. Was it not that Vestas started making or was that wrong? Because there was Bonus wind? I mean, it was, you know, all of the wind companies were essentially Danish at that point.
HA
Yeah. I think it is always in a small country. Everyone probably thinks they have the right to call them the fathers of it. And it turned out that during that time and into especially the, I would say in the 70s,80s, very much sort of experimental. When we got into the 90s and end of the 90s, it unfortunately turned out again, we were formed by NEG Micon and Vestas. A little bit out of again, accidents, bad, bad headwinds. So, banks forced and investors forced to merge NEG Micon and Vestas in the end of the 90s. And then that formed then the what you will know as Vestas today.
ML
And then today, you've got how many employees? How many locations? You've said already that your turbines are in 80 countries. Where are your people?
HA
So, we are 37,000 people. And of course, that means we have manufacturing hubs or locations in 13 countries. So, we have a large hub in the US. So, inside the location of US and North America, we have some in Mexico. We have quite a number of capacities in Latin America, out of Brazil.
When we get into Europe, of course, we have in Denmark, we have in Germany, we have in Poland, we have in Spain. So, we have traditionally a very heavy located supply chain being sourced out of Denmark, Europe. And then when we go further, sort of to the east, we have a factory hub in India. So, we have more than 3000 colleagues in India, both from a technology and from a manufacturing part.
And then we have a hub in China, where we for very originally times in 20 years ago, we outsourced and had a supply chain established in China. It makes you probably smile, but a bit more than 25 years ago, Denmark made a technology transfer agreement with China on onshore wind. And of course, for that reason, we shared technology, because Denmark at the point in time had a vision of that that will help China to do more renewable and better green and less CO2.
Today, I think we can probably say we got it back from that agreement with having a large global competitor cluster out of China. So, interesting when you sort of look 25, 30, 35 years back.
ML
So, this is something of a walk down memory lane for me, because I started New Energy Finance in 2004. And there were NEG Micon turbines, and it took me a while to work out that they're now Vestas and so on. But also, I've spent quite a bit of the last few years, I would say since about 2018, I actually spent more time on the energy systems questions and on what are we going to do with steel and coal and so on. So, I may not be fully up to date with the developments in the wind sector. So, it's a bit of a refresher for me as well.
Can you talk about your supply chain strategy? Because, okay, so you've got all these plants around the world, but they're not all doing the same thing. So, what do you do? What do you kind of keep locally in where you're building the turbines? And what do you centralise in whether it's Denmark or a smaller number of plants?
HA
Yeah. So, when you're new, and I think this is probably coming from most companies, but then it was also supported by an industry that went more global. Because if you were coming back to the original one, most things were going on in Denmark. And of course, they have also a lot of components. So, you still have large proportion of technology components and others being developed, manufactured in Denmark.
But then over time, as you would appreciate, you try to avoid transporting the assets, the finished assets, whether that's the blades or the nacelle or the towers, you try to avoid to transport that out on a country basis, because they're significant assets, because some of it is, yeah, 40, 60, 80, and now the blades for offshore is 116 metre long in one piece.
ML
Right, so the big bits you want to make fairly locally or locally, and then the clever bits, I'm guessing you want to make... But I've had people say to me, do you know what, all of these, you've got all of these turbine manufacturers, and they're essentially, it's a bit like, I don't know, like sneakers, they have different brands, but they're all made in factories in China now.
HA
Yeah, that almost sounds a little bit like a Trump claim. That's not right. And let's face it, that is something that probably is easy said, and probably some could have an interest in having that as a heading. The truth of it is, most of it is designed, and then it is sourced. So we let partners co-design with us, but then also manufacture it. And that can be manufactured in Vietnam, as we, for instance, have a global partner in CS Wind, that is a Korean stock listed company that has been a partner to us for more than 25 years.
And we co-design towers. We sold our last tower factory, which was in Pueblo in Colorado in the US to CS Wind, but still have a very firm partnership. So we have a call out on capacity for it. So I think the industry has consolidated, become bigger, because that was part of also being able to meet the demand side of the industry in terms of turbine, turbine size, technology requests. So it is natural that that supply chain then became global. And I think for three decades, we worked everything we could to make it as global as possible.
And I think the last reminder of that was in my first year, when COVID broke out, we were actually opening a cell factory in Brazil. We couldn't have people travelling because they were sort of rejected to get into Brazil. But there we were mobilising and activating that factory, literally by online over video and others. After we have had people working in Denmark in the cell factories in Denmark in 19, and that was for having a localisation that produced turbines for the Brazilian and Latin American market.
ML
I want to talk about the costs as a result of this kind of globalisation, because during the 22 years that I've been doing this, we've seen enormous growth in the sector. I mean, it was generating less than 1% of global electricity. Now it's 10%. It's overtaken nuclear. So costs have come down. But how has technology changed? A lot of people when they drive along the motorway and they see a wind turbine, unlike perhaps you and me, they don't know which year they can't immediately tell which year it was built just by looking at it and seeing the blade technology or the nacelle technology or just reading the numbers on it.
HA
But I think normally here a good indication of what decade it comes from is typically a size thing. Because if we walk a bit down memory lanes for between 2000-2010, you struggle to make the energy offtake coming from turbines, energy cost wise low enough. So 99% of all turbine parks that went up before 2010 required some sort of public subsidy. And of course, that created the notion, also probably the perception among every society around the world, if we need to have wind energy, it has to be paid by us through a subsidy of our government. That led to that by the financial crisis in 2008. I was in the UK at the time and I remember that because I worked in another industry. A lot of those subsidies got either cut, reduced because government suddenly had to do something else to keep societies floating, while the financial…
ML
Austerity, it’s called in the UK.
HA
Yeah, no, it was austerity and austerity measures as they were called. But then that also led to that the industry came out in challenges in the first year. So 10, 11, 12, 13 for Vestas was very hard years. But it led to that everyone focused on the technology development to get to a lower level of levelized cost of energy. So technology, the scale was the prime two words that drove the levelized cost of energy down in the decade between 2010 and 2020. So when the entry to the 2020, you were standing on something where we needed subsidy in less than 1% of the world markets because now it was suddenly at par with solar. It was it was cheaper than gas. It was cheaper than coal, much cheaper. And then that was even on unloaded by the CO2 costs on it. So in reality, that decade was where wind became what I call a major energy resource that you could do both from a cost and from a timing point.
ML
My memories of that decade, I remember, obviously, the crisis in 2008, and what it did to national budgets and so on. But I stood up in I think it was 2011 at a Bloomberg New Energy Finance Summit, maybe 2012. And I told the audience that they had to get ready for subsidy free renewables. And they looked at me like I was mad. They looked at me like I was mad. And I said, No, with that, that is the world that you're going to have to compete into. And there was this question that everybody was always asking me at the time, and I'm sure you as well, when will renewables be grid competitive? And the answer was 2015. That was the year when there was that kind of crossover. And after that, it became cheap.
We will have to talk about systems costs and integration costs. But I want to come back to that. Because it became cheap and you say that the key thing was scale. But scale, it was a bit more nuanced than scale, because there were different designs of turbines for different wind regimes, and so on. So there was also more than just bigger and bigger.
HA
Yeah. And I think here, when you it also became the decade of where you were mapping the world. Because if we look back at that, that was the time where we what we call our supercomputer. Because in reality, you ran forecasting models of how does the wind regimes look for individual space. So when you reality today, we have mapped the world. So I can tell you what if you point on a map, how does that part of the world look like in average wind speed during the year?
And of course, you want to have something that is wind speed average to high for most of the year. You don't want to have two days of wind and then eight days of no wind. So therefore, it is about where do you find the most constant wind speeds around the world? That was also the decade. And of course, when you sort of go back, everyone sort of says, ah, but it's only the size. No, it wasn't only the size. It was the technology that also surrounded the use cases. So you knew that the use cases were absolutely delivering when you put the turbines up.
ML
So as you described that, I'm remembering those first wind atlases. I mean, having a wind atlas was like a big deal. They were like press releases.
Oh, we've got a wind atlas now for, you know, Spain. Well, Spain had one very early because they were one of the pioneers. But, you know, there were countries that are now major users of wind power that didn't have an atlas. But it's not just have an atlas. Now it's got to the point where it is all about the quality of the wind and the turbulence of the wind. And as you say, the seasonality for sure. And then matching the turbine exactly to that and digitally controlling it.
HA
Yes. And I will say here and it sends a little bit of the signal that it took us 30 years to put up the first hundred gigawatt as a wind OEM. And it has taken us seven years to put the next hundred gigawatt up. So 30 years, seven years and a gigawatt just to translate that. If you're listening in and think, oh, what does it how does that translate into my household? A gigawatt is literally a measurement of that that corresponds to 800000 households’ normal electricity usage.
ML
So the danger, Henrik, of going how long does it take to do a gigawatt is that solar took a decade for the first gigawatt and now does more than a gigawatt per day, the whole industry. So solar has overtaken wind in sheer installation volume, right?
HA
Yeah. Which is also it's it's it's an interesting it has become very cheap and therefore also solar has its advantages in the parts of the world where you are having a lot of days or a lot of hours of solar, because where solar is only there, it will only at least what we know you and I is it will only be there for part of the day. And then, of course, general relating to that, there are parts of the world where if you establish too much solar, you overcapacitate. That means you get curtailed. That means you get cut off. So this is where all of the renewable industry by this decade in the 20s now walks into having a new dimension, which is how do we build the storage connected to the generation of electricity from both solar and wind?
ML
And I want to click into that. I want to double click on that problem of storage or integration before we do levelized costs. Let's just go back there. Where is wind now on this measure levelized cost, which will already have some people shouting at their phone screens or computer screens saying it's irrelevant. But it is, I've always found, at least a starting point for discussions about cost is, well, if you could at least use the electricity, how much would it cost you and where is wind today?
HA
Yeah. And that's that a little bit again, depending on what wind you are asking for, because and where do you build it in the world? So if you take and I think the best two touch points you can have is if you go into the AR7, which is the offshore UK auction there, you are basically building offshore wind.
ML
Henrik, we have a rule about acronyms. AR7 is Auction Round 7. So this is the system by which contracts for difference, another acronym CFDs, are handed out or awarded under the UK government or the UK electricity system scheme. So there's AR7 is where we've just been and we're about to have over the next few near future, we'll have AR8. Yes. But there's been quite a few rounds which has driven the industry in the UK.
HA
So I always say the best way of going in with a where is the price and the cost of establishing? And of course, then there is a gap between what is then included in profitability for the owner and other stuff. But as a government and as a society, I always look at what will the price be where we can build new electricity or new electrons to the society.
ML
Via a reverse auction. So the price discovery via reverse auction, which I, by the way, fought pretty hard for behind the scenes, not as I'm not an advocate, but I am somebody who doesn't like wasting government and taxpayer money.
HA
No. And it is interesting. I'm a big advocate and ambassador for both the auction system, but also that the auction system is removed from what I call a sensational or big stuff or big movements rather than do some constant. Do it as a little bit like you will run a factory, because that's where you by doing that, you get the lowest possible price because you also get the synergies of scale.
ML
So round after round and regularly
HA
Yes. And try to hit a more normalised volume each year.
ML
Okay. So AR7 for offshore wind cleared at today's price. I think it was in Scotland, it was just under 90 pounds per megawatt hour. And in England, a little bit higher, 92 pounds or something like that. But that's offshore wind. And I think where you were going is that's a good measure of where we are. And it must be because…
HA
And for me the good measure is that offshore has the opportunity is central government. It’s typically working in what I call government or federal seabed. So you decide permitting can be easier, faster. In some countries, you then pull yourself into all sorts of processes anyway. But you establish typically a gigawatt at a time, which is important because that's a big generation that comes onto the grid in one go. Whereas onshore, the ultimate difference is in the US, you typically have maybe 300-400-500 megawatts, which means it's half a gigawatt. And in Germany, you have a big park if it's 40 megawatt, six turbines.
ML
So where is the price for onshore? So if offshore, we're talking about 90 pounds, which I'm going to do in my head is about 125 dollars per megawatt hour, something like that. For those in euros, you'll do your own calculation, but it's whatever it is, it's 100. And yeah, it's probably about 110 euros. What's onshore?
HA
So if you go to Germany, which I think do three auctions per year, they came from a low point of around a gigawatt a year in onshore to now do more than 10 gigawatts in the last two years. And of course, the cut point is now going towards 65 euros per megawatt hour in euro, which means it will be somewhere around 55 pounds per megawatt. So in reality, I wouldn't say it's half, but it's somewhere close.
ML
Two thirds or 60 percent.
HA
But Germany is a good example as well, because a year and a half ago it was at 85. And everyone goes, oh, it's the interest rates or is it is everyone losing money on it? No. But it is when you use the I call it ‘the Chinese principle.’ Scale up, do more volume, because that means we can construct, instal something every day, every week, every month. And that means better uses of grain, better uses of people, better logistic access. And that has driven that price from 85 to 65 without too much external changes, not too much external interest rates.
ML
But these are still high prices. I was in Egypt last year and there's a project that was being launched to much fanfare and it was 30 dollars. What would that be? Twenty two pounds? I'm not sure which currency… the house style is to switch between currencies. So but 30 dollars per megawatt hour for onshore wind is a very, very good wind regime near the Red Sea. That's a lot cheaper than what we're achieving in Europe.
HA
Yeah. And then we can go to Saudi and say it was 14 dollars per megawatt. And then we know for me, the importance is when you construct a solution like that, that it's sustainable at that price level for 30 years. And as I said, somebody seems to sometimes from a government point of view, almost wants to do a marketing on a price level that then changes already for the next government.
And then it's not sustainable. I think generally here what we see is I think one of the cheapest places right now to build sustainable onshore wind is actually in the US, because you have a combination in the US of building it, building a high volume annually. And at the same time, also in the US, you have what you call PTC production tax credit. So it means that you have a tax credit system that subsidises the build out of wind. That is existing since 1992, which also means that the USA has become the largest haver of capacity installed of wind in the world, next after China.
ML
And the prices in the US are clearing at what, 40, 50 dollars?
HA
Yeah, somewhere around 40 dollars. In some of Texas, it was down to 25, 27 dollars in build out. And of course, that comes back to how much cost do you have in both the platform and construction? And how long space do you have to cover for the cabling and other stuff to get to the grid?
ML
But that is also a number that is after taking into account the production tax credit. So that's with the federal subsidy. So if you kind of strip that out, you're talking about 60 to 70 dollars, something like that.
HA
No, I would say sort of if it's the 20 one, there's still some of that. Then you will still you will get to around 40. I think right now in the US without the tax credit, you'll probably be sitting somewhere around 45, 50 dollars still.
ML
Let's talk about the impact of interest rates, because you have already alluded to some of the tough times where the industry has had to consolidate and there's been rationalisation. And there's been some of your own company, you said that when you came in was in dark times, and some other companies have been there as well. A lot of that is to do with interest rate cycles. What impact do they have on wind power prices?
HA
Well, I think actually they influence in a similar way to most infrastructure. So whether you build a bridge, so you build a new railway or whatever, in the end of it, you've got to finance it.
ML
You're in the UK, so don't talk about building new railways. That's a very sore point.
HA
I lived here seven years, so I know that. But actually also sometimes in a country you become often negative or critique on your own things, despite it's actually relatively working well.
ML
For those in the audience who can't follow that, we have this thing called HS2, which is an absolute national embarrassment, I'm sorry to say, because I don't even know if it's being built, but all I know is it's going to cost vast amounts of money for many, many, many decades.
HA
But I was here that long ago that I was part of the tube line, and that was an interesting one, because no one would ever consider not having that tube line not there today.
ML
I was on the board of Transport for London when you were living in London. So we were building out.
HA
Terry Morgan, right? So went and built Elizabeth line, didn't he?
ML
Gosh, yes. Sir Terry Morgan, who was the chair of what was then Crossrail and presided over the catastrophic hole in the finances, which we were on the board were not informed about. That's a fascinating episode we should do some other time. But let's come back to the impact of interest rates, because one of the things going on now is there's a political cycle that is pushing back against all of this. And it's driven by a lot of it is about the narrative of cost, the narrative of X, this stuff costs too much. And a lot of that is because we are not in the interest rate environment that we were in five years ago.
HA
Sure. And then, as I said, it's also interesting how the human mind always goes back to saying, well, if something has a cost, the alternative is not for free, because if energy was for free, we will use unlimited of it. So therefore, we were having a low price point at some point, of course, when you can finance things in 20 years at zero interest rate. That means in reality, you don't have any capital costs or any financing costs to it. So that led to probably an overly supply of capital. And that also means there were projects that shouldn't have been built or built.
ML
So the famous AR4, the auction round four in this country, which cleared offshore wind, cleared at I think it was 37 pounds. That was in 2012 money, so let's call it 60 pounds. And now it's £90. But at the time, AR4 was regarded as a vast success for your industry and was followed by… What happened next?
HA
An ambition in AR5 at £44. And at least I was bold enough to say that will attract no capital, because in the meantime, the interest rate went from zero to literally four (percent). And if you had to do that at four, the cut price would probably at that point in time should have been closer to £60. And it was also proven when AR6 cleared in the high £60s.
ML
And it failed instead of which it failed. There were no bids.
HA
Yeah. And then we're coming back to a very important point, which also is the success of wind and other new energy sources is you've got to come back to that you clear something every year because what happens is if you have two or three years where you're not building any projects, your competences go somewhere else in the world. Your typically your infrastructure or your supply chain go somewhere else. And that's really not helpful.
ML
Cleaning Up is proud to be supported by its Leadership Circle. The members are Actis, Alcazar Energy, Arup, Copenhagen Infrastructure Partners, Cygnum Capital, Davidson Kempner, Ecopragma Capital, EDP, Eurelectric, the Gilardini Foundation, KKR, Mitsubishi Heavy Industries, National Grid, Octopus Energy, Quadrature Climate Foundation, Schneider Electric, SDCL and Wärtsilä. For more information on the Leadership Circle, please visit cleaningup.live.
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ML
Let's talk about some of the myths, some of the pushback that you get and specifically in this area of cost. If wind is so great, why does it need any of this state involvement? Why can't the state just step back and say: it's great, it's cheap, we'll let the markets just figure it out?
HA
Well, I could also see on the other thing, the electricity is going into the society which is then controlled by the government. So I could flip that on the other side and say, why is it things we want more of, we are taxing very high? Because if you look at the electricity price that comes into the grid, in most cases it is below or a fraction of the average that is in the grid today.
And then we typically put taxes of 100% or 200% on top. So the price we see on kilowatt hour back in our utility back home, that is typically two, three times higher, not because there's anything being taken as a profit or anything else, but simply because we, as society, we tax some of the infrastructures. Therefore, I will say overall from a government point of view, one of the major importance of responsibility is that the government stands for security for the society.
They also stand for the energy supply to society. And if you want the private sector to invest and supply the energy, you’ve got to give them so they can actually finance and also supply it in 30 year point. And it's not for free.
ML
Okay. Next myth: All of that is pointless because wind is intermittent. The wind does not always blow. And in fact, it can, it can, you know, we can have weeks where there's low wind after months of low wind in years of low wind. So it's government should not be doing that.
HA
No, but then we are back to something. If we are that black and white, then we will end up only having one energy source. And that is not an indefinite energy source because oil and gas, every time we take that out, it is not going to replace itself. When you burn it, it doesn't come back. Wind, it will always be here. Number two is wind as such. And I fully appreciate that our wind is not always blowing, but you try to be in Scotland and the coastal areas. Offshore has a much higher, much more regular, it might be lower wind and might be higher wind, but always wind. Here comes the thing.
In the year of now, 2026, we have come a long way into actually having a storage that sits behind that. And of course, for example, Denmark now, of course, we have an energy crisis in Q1 in 2026. And 95% of new registered cars in Denmark are electric cars. So now we all have one. If you have two cars, you have two batteries in your drive that should then work exactly to store some of the electricity when the wind is there. And especially in the high wind days, we should all load the batteries up.
ML
That's very nice for Denmark. You've got lots of rich people who can afford the two electric cars. You've got 40% of your gas, which is biogas. You're also connected to lots of countries. So you've got lots of interconnections. We have something in the UK called the Beast from the East. It's a weather pattern that comes from Siberia, and it can be two weeks with very low wind and very low temperatures. And I don't think even if you had two electric cars on your driveway, you'd be able to get through that with your heat pump, because we want to electrify the heating as well, keeping you warm. So what is the solution to that?
HA
No, but the solution is neither or. It's both. So therefore, don't do all countries that have gone, I'm single sourcing on an energy that becomes unreasonable dependent on a single source. My point of view is that you've got to have a mix. It's called an energy mix. So therefore, should wind be 100%?
No. People that are sitting and saying, oh, we should have 100% wind won't work, because in reality, that also requires that you have electrified your whole society. This is the difference. When you get gas, you have molecules. When you have wind, you have electrons. So therefore, the higher we can get in electrification, the better wind will work.
But seeing as a solar energy source, no way. So therefore, we got to get used to that we will use biomass, we will use wind, we will use solar, and then we will learn how to get the electrification as high as possible. Otherwise, I'm not buying into it, which also means from a European point of view, if we go back in memory lane again, Europe was leading nuclear.
And here is the thing, sitting next to a renewable person, chief exec of a wind company. Listen, I'm in favour of all energy sources. Because right now, the biggest challenge for Europe was we let the nuclear competence go because we stopped doing it. Today, we sit in a situation where 450 million people across Europe is importing 55% of the energy we are spending. That is dependency, but on somebody outside Europe.
ML
The problem with nuclear, of course, is that it's a terrible solution for backup. In those two weeks, the wind that's helping and the solar that's helping all the time, when that goes away, the last thing you can do is ramp up lots of wind. So I don't know if you know, last year, I wrote something about this, I call it the pragmatic climate reset saying, look, let's not be absolutist, and let's be prepared to keep some fossil backup for those situations.
HA
Yeah, and why not? Because if we can make the fossil last longer, why not spend average less of it, but make it last? Let's just say for the sake of it, we make it last a century, rather than a few decades more, then we are better off. But we’ve got to have the things we can control in terms of quick price, affordability, and also, again, the independence, we should do much more of it.
ML
And I think in that model that I laid out, you can push down that use of fossil to 3, 4, 5% of the time.
HA
That's really spot on. And let's pause for a second. As you were rightly saying, it went from 1% of electricity to now, more than 10% of the electricity, and it's still growing. But on the global energy supply, it is still less than 2%. So there's 98% to go. So before you can't sleep over the two weeks where the wind is not blowing, we got to make the 98% last longer, and stretch the wind in to cover a bigger percentage.
ML
I'm smiling because I could go down a rabbit hole of using this as a learning moment about the primary energy fallacy, because the 98% is measured against you're including in there all the thermal waste from all the fossil fuels being burnt in the world. But let's not go there, because you know what I'm talking about. And the audience, I think by this time, probably does as well.
Let's just do a little bit more myth busting. The wind turbines, your wind turbines, your factories, they only work because of coal, right? The coal is being used to make the steel, the coal is being used to drive your plants, and the wind turbines never pay back their carbon debt.
HA
That's right. But that's the same as I will say, a chef cannot make an omelette without cracking an egg. So here, listen to this, a wind turbine goes carbon neutral, typically around month five and six. So at month five and six, the turbine has compensated its own carbon footprint already within the first six months. That means you have 29 and a half year now, where you're basically displacing carbon and CO2. I mean, it's the best trade of anyone's trade in it. So myth died there.
ML
Yeah, so that's important. So five or six months, which by the way, is even better than solar, which I think is around sort of 10 to 14 or 16 months.
HA
It is, it is.
ML
What about, that's all very well. But your turbine blades end up in landfill. They're terribly toxic. And we're producing these turbine blades, we don't know what to do with them. The landfills are filling up with wind turbine blades.
HA
Yeah. And where you've had pictures of that is simply criminal or unforgiven. And as an industry's voice here, I will say unforgiven, because there are methods today, we hold at least three of them.
So one of them is that you cross it, you mix it, and you use it as part of, for instance, concrete and surface roads and other stuff. The other one, which we are now from prototype to scale, is that we actually decomponise the blades back into its original components. So that means the blades come back to fibre, comes back to resin, it comes back to carbon. And then having a cleanliness in that, that can be reused in either back to blades or back to other industrial products.
So I will say here, myth, exactly again, gone. But there's still some pictures that are really not nice. And I think those pictures are the same as what you also see when you have ships that you retire and other stuff in remote areas of the world, where you suddenly see steel ships being laying on the beaches and doesn't work. It's not good.
ML
Okay, so we can reuse, crush the turbine blades, reuse them, actually disassemble them into resin. And you said three methods. I wasn't sure about the third one. So reusing the resin, reusing the fibre.
HA
And then you have the other one, which is an interesting one, because when you have 116 metre long blades, you can actually use that structure for something. So you can make bus waiting. So sort of a little bit more, some will do furnitures out of them and some do other things.
ML
I get frustrated with that one because journalists love looking at a Danish bus shelter made out of a turbine blade. And I think this is sort of irrelevance in the grand scheme of things.
HA
From an industrial scalable thing, it's irrelevant.
ML
But meanwhile, while they are still up and spinning, those 160 metre long turbine blades are killing the birds. And that's a really interesting one, because a lot of people say, they turn so slowly, how can they kill birds? But of course, the tip speed can be a few hundred kilometres an hour and they do kill birds, right?
HA
No, it's often the tip speed is north of 300 kilometres an hour. So of course, it does that. But it also has, as you're rightly indicating here, it does have a noise. And therefore, it also has a noise that people and birds generally will accept. And dare I say, birds are reasonably intelligent creatures. So when you see the birds going offshore, see the large offshore wind parks, generally they will circumvent that.
So the statistics is as hard as the following. Your cats and your skyscrapers are killing more birds than the wind.
ML
They may be killing more birds, but aren't they killing small birds? And the problem with the turbines is they kill the raptors, the birds that are hovering on the ridges. And is that not right?
HA
No, that's because the bigger bird you get, typically, the more respectful they get for big things. So therefore, actually, they do circumvent it. And what you will find is when you see offshore, where especially when the birds come, the large birds comes north-south, that's where you can take that statistics.
ML
The last one, which I've heard on great authority, is that wind turbines give you cancer.
HA
Yeah, I can't say how disgusted I am to hear about something because what if somebody even believed in that nonsense? It's not true. It's not factual. And it is definitely not right. And therefore, for I will call certain individuals to keep repeating something not factual doesn't make it right.
ML
Before we wrap up, there's one other topic that I want to talk about. And that is the supply chain dependency on China. If you go through all the different elements, all the different components that are in your turbines, now they may be manufactured in Denmark or in Germany, wherever. But the rare earths, the clever bits, the permanent magnets, and by the way, lots of the other critical minerals that go into motors and go into the software, all run on chips. And those chips need all types of all of the rare earths.
Are you concerned about the supply chain dependency on China? And how do you ensure your operations? How do you ensure Vestas against these supply chain pinch points?
HA
Yeah, and probably that comes a bit also back to a personal point. I'm originally a Dane, but I've lived abroad for a number of years. I think the world's for many decades moved that we all actually got better. We got wealthier and we got a lot more integrated in trading with each other. And I'm not going to start with the Vikings and how they exchanged goods in Scotland. But since the recent modern since probably Second World War, the world really grew income, global income by doing what we were best at.
The world worked and we outsourced production and we outsourced some things to each other. And I think that world is probably a bit challenged today. But generally, my feel is if we start, we had a few years here where we are almost trying to isolate each other and regionalise back.
And I think here there is a good thing saying that we are investing with each other. I don't see China not wanting to trade or produce because they still have hundreds of millions of citizens that are working in the manufacturing industry. So I don't see that. And I will keep talking to the better, both on the knowledge and understanding.
But having said that, if I look at what we are doing, we are building more regionalisation. We are building more alternative sourcing on some of those critical, not only minerals, but also critical components. But I actually do think and I do hope that the world will still have a, first of all, a sensible approach to deal with each other and trade with each other.
ML
I think it's completely appropriate to want those benefits of globalisation to, I don't want to say return because they're not gone yet, but they're definitely threatened. And I was on the UK Board of Trade. So you're talking to somebody who's got a deep commitment to free trade.
But the reality is the world is going the other direction. Europe is going in the other direction, talking about putting tariffs on production in China of all sorts of things: electric cars, but also some of the components you use. And the US very definitely concerned not just about the components, but also about the security issues. In fact, not just the US. We had the UK refusing a significant investment from one of your competitors, Ming Yang, because they didn't want Chinese turbines to be to be used, particularly in the offshore, that one was in the offshore environment. Aren't we actually going in the other direction from what you and I would like to see? And how are you going to protect the business, your business?
HA
Depending on if we allow the world to become completely black and white, then, of course, we will end in a bad place. But I'm also saying here, I think we probably in parts of our world, we also became lazy. We gave a lot of things and saying, no, no, no, we won't do that ourselves, or we will let somebody else do it for us, if we could have it marginal cheaper, we sometimes forgot what it would take to have that industry still being present in Europe.
And dare I say, wind industry is part of an industry that was here, originally innovated here, and probably not needs protection, but not applying naivety either. Because today, everyone has learned in the last decade, defence, critical infrastructure and critical infrastructure, I call following energy supply, grids, telecom. And some of those, we have also had the discussion among at least some of these security intelligence coalitions, where we are saying: hey, that's where we stick together. And we won't allow that to enter our grid.
And to give you an example, China actually told five years ago that there shouldn't be an opportunity to remotely update Vestas turbines in China with software, or they shouldn't be therefore controllable into the Chinese grid, because that was critical infrastructure for China. Then it's, of course, interesting when you're five years later, is having the same argument sold back and saying, we'll help you with that.
Hang on. I think here, we got to say there are things in here, when it comes to grid, the things in here when it comes to defence, the things in here when it comes to telecom, where we'll just say, we trade some of the hardware. But when it comes to electronics, when it comes to some of these things, where it starts touching the modelling, the AI modelling, the opportunity to data and other stuff, that's where we'll say, hang on, there we need to see the world slightly less naive and open.
ML
Does that not run the risk that you become maybe a European champion, maybe one of the, you know, couple of European champions, but that you get excluded because your equipment doesn't work now without that intelligence, without that data, without the AI layer. So does that mean that if other countries outside Europe apply those rules, does that mean that Vestas becomes...
HA
But I think it sits somewhere else. I think it sits somewhere, how far will you work and will you work in completely open room with those governments? And I think here, we can't in one go see that we are producing drones and we are sharing other things. So it's suddenly we become opponents. If we are opponents part of the world, we probably have to assume.
And I think the notion that is being worked with right now, I think came out of Brussels in the most recent legislation where they're saying a friendly nation or trusted partner nation. And I think that's probably one we have to get a bit more used to. Because the trusted partner nation means somebody you can exchange literally anything with.
ML
Henrik, when you joined the board of Vestas as a non-executive director, I bet you didn't think you'd be having conversations about data security and these very, very complex geopolitical issues.
HA
Yes, that's right. And if I look back, and when I see my colleagues in public affairs and other things, we'll also appreciate I'm nowhere indicated in any of this. So I'm typically the one that comes from a business point. I come from a rational point. Sometimes I'm absolutely overmatched in the political and also in the diplomatic version of that.
But on the other hand, I've learned over the years that we are all human beings in the sense. And sometimes having a voice that is also, I only speak facts. I speak facts about the asset. I speak facts around the pricing, the costing of it, which people sometimes don't appreciate because might not fit the timing of facts. But generally, I like facts. I like seeing how we can do things. And then I’ve got two daughters now the age of 24 and 27.
I somehow insist that I have to pass the baton to them, where I guarantee them that I did my absolute best to let the next generation have a better starting point than I think we sit with, because we could be accused of being the generation. We invented the problem because we do what we do today. We also generated the technology, but we could be the generation then that doesn't want to use the technology. And that I don't want to be accused of.
ML
So the world needs the diplomats. And it also needs the people who are not so diplomatic. Not just you, perhaps me as well. But it also needs that clear vision and direction of travel. You know what you want, and you're determined to get it. And I think that's been a very interesting conversation. Thank you so much for joining us now.
HA
Thank you. Thanks for having me. I'm always delighted and I'm delighted a little bit visiting memory lane down there as well. But imagine we're sitting here and how far we've come. So thank you so much for having me.
ML
So that was Henrik Andersen, CEO of one of the world's leading wind turbine manufacturers Vestas. As always, we'll put links in the show notes to resources you'll find useful. And I'd like to thank the video editor, Jamie Oliver, who's also acting as cameraman today, producer, Oscar Boyd, head of operations, Kendall Smith, the team behind Cleaning Up, the members of our Leadership Circle without whom none of this would be possible, and you, the audience, for spending time with us here today.
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