Numbers deep in the red for wind turbine manufacturers like Vestas or Siemens Gamesa, offshore wind farm operators like Orsted or Vattenfall bolting away from planned large projects. The supposedly booming wind energy industry is running on fumes; RWE CEO Markus Krebber speaks of the "perfect storm". Skyrocketing raw material costs, supply chain problems, and rising interest rates are rendering the ambitious expansion goals of offshore wind power projects worldwide obsolete, particularly jeopardizing the energy transition in Europe. The gap between the capacities installed so far and the goals set is growing larger, and the vision of the surrounding seas as "Europe's power plant" seems to have gone with the wind. Now, the European Commission is launching a wind power initiative to counter the looming failure of its most crucial project, the green transformation: Accelerated approval processes, a modified auction system favoring domestic (European) producers, and facilitated financing with credit guarantees, especially through the European Investment Bank (EIB), are the three focal points of the EU's action plan. Unfortunately, they won't achieve much.

Firstly: Even if they manage to halve the approval duration of new wind parks from ten years in the short term, the infrastructure to deliver the increased amounts of wind energy to customers is lacking. The Achilles' heel of the energy transition, the much too sluggish expansion of the grid infrastructure, remains.

Secondly: The altered auction design, where not only the price but also aspects of supply security matter, is intended to exclude subsidized Chinese providers. However, the capacities of European providers are far from sufficient to meet the ambitious expansion goals. The European value chain allows for an increase of 7 gigawatts (GW) per year, but 30 GW are needed. Europe already relies on China not only for turbine supplies but also for the foundations of offshore wind turbines. The EU faces a dilemma: Either scale back the ambitious wind power expansion goals or give up European sovereignty. The fate of the European solar industry, which was completely displaced by cheap Chinese competition, serves as the writing on the wall.

Thirdly: The vague announcement of a funding pot at the EIB and the prospect of credit guarantees will offer little help. For investors as well as lenders – up to 80% of the investment volume in European projects – cost calculations and revenue prospects are the relevant aspects. The return of inflation has serious consequences given the long periods until commissioning. Previously, offshore project financing often used the 1-month Euribor plus 140 basis points. The 1-month Euribor had been negative since February 2015, in early 2022 it was still close to its all-time low of -0.6%. It now stands at 3.9%. It's evident that this blows any calculation off course. With turbine costs rising by 30% or more, it was foreseeable that in the case of fixed-price agreements, turbine manufacturers like Siemens Gamesa, and when variable prices are involved, both wind farm operators and manufacturers would incur losses. The EIB cannot provide enough subsidies to offset these increases, especially considering the intended decrease in wind energy prices due to future political goals.

Conclusion: The EU's wind power offensive will not be a game-changer for the energy transition; at best, it will be a mild breeze. And that will entail severe consequences for electricity prices, and the competitiveness of the European industry.