Wind Energy Supply Chain Bottlenecks Threaten Climate Goals: report

Global wind energy installations could fall short of targets due to supply chain constraints, a new report warns.

A new report from the Global Wind Energy Council (GWEC) and Boston Consulting Group (BCG) finds that the global wind energy supply chain is not equipped to meet the demands of a 1.5°C climate pathway. The report, titled “Mission Critical: Building the global wind energy supply chain for a 1.5°C world,” warns that without significant investment and collaboration, the world could fall short of installing the 700 GW of new wind capacity needed by 2030.

The report identifies several key bottlenecks in the wind supply chain, including:

  • A shortage of key minerals and components. The wind industry relies on a number of rare earth elements and other critical minerals, which are often concentrated in a few countries. A shortage of these materials could drive up costs and slow down the deployment of new wind farms.
  • A lack of manufacturing capacity. The current manufacturing capacity for wind turbines and components is not enough to meet the projected demand. This could lead to longer lead times and higher prices for wind equipment.
  • Inadequate grid infrastructure. The grid infrastructure in many countries is not yet able to handle the large amounts of electricity that wind farms can generate. This could lead to curtailment, which means that wind turbines would have to be turned off even when they are producing electricity.

The report also finds that the wind industry is highly globalized, with a strong focus on China for rare earth element refining and component manufacturing. This concentration of production poses risks for creating a competitive and sufficiently scaled-up global supply chain.

To address these challenges, the report calls for a coordinated global effort from industry and policymakers. The report outlines six key action areas:

  1. Address basic barriers to wind industry growth in land, grids and permitting.
  2. The wind industry must standardise and industrialise.
  3. Regionalisation will be needed to support growth and resilience, while maintaining a globalised supply chain.
  4. The market must provide clear and bankable demand signals.
  5. Trade policy should aim to build competitive industries, not push higher costs onto end users.
  6. Fundamental reform of the power market reform underpins further wind growth.

Through a coordinated global effort, the challenges in the global wind supply chain can be resolved over the course of this decade. Actions taken now in these six areas will help to foster a highly resilient and cost-efficient wind industry to decarbonise the world.