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'Probably will hurt people' | Vestas CEO sees lack of pricing discipline in wind industry

Recharge News|Bernd Radowitz |May 2, 2022
DenmarkGermanyGeneral

Vestas chief executive Henrik Andersen urged his competitors to apply pricing discipline when negotiating wind turbine orders or risk getting hurt by rising raw material and transport costs. 

The Danish manufacturer in the first quarter of this year had continued its discipline across onshore and offshore markets at the time of order intake, and is “absolutely committed to continue to do so”, Andersen said during a results conference call.


Henrik Andersen doesn’t specify which rival he believes is in danger of negative impacts but stresses that remarks refer to both on- and offshore deals

Vestas chief executive Henrik Andersen urged his competitors to apply pricing discipline when negotiating wind turbine orders or risk getting hurt by rising raw material and transport costs.

The Danish manufacturer in the first quarter of this year had continued its discipline across onshore and offshore markets at the time of order intake, and is “absolutely committed to continue to do so”, Andersen said during a results conference call.

“And we ask also here the industry to come to the same conclusion in both onshore and offshore,” Andersen said, adding “we have seen lack of (it) from a discipline point of view.”

Vestas during the first quarter of 2022 registered a 16% increase in its order intake (onshore and offshore combined) from a year earlier to 2.9GW, while the average selling price of its turbines rose to €1.01m ($1.06m) per megawatt, from €0.86m/MW during the ... more [truncated due to possible copyright]

     

Henrik Andersen doesn’t specify which rival he believes is in danger of negative impacts but stresses that remarks refer to both on- and offshore deals

Vestas chief executive Henrik Andersen urged his competitors to apply pricing discipline when negotiating wind turbine orders or risk getting hurt by rising raw material and transport costs.

The Danish manufacturer in the first quarter of this year had continued its discipline across onshore and offshore markets at the time of order intake, and is “absolutely committed to continue to do so”, Andersen said during a results conference call.

“And we ask also here the industry to come to the same conclusion in both onshore and offshore,” Andersen said, adding “we have seen lack of (it) from a discipline point of view.”

Vestas during the first quarter of 2022 registered a 16% increase in its order intake (onshore and offshore combined) from a year earlier to 2.9GW, while the average selling price of its turbines rose to €1.01m ($1.06m) per megawatt, from €0.86m/MW during the fourth quarter of 2021.

The CEO didn’t specify which of its rivals lacked the pricing discipline Vestas insisted on, but said “we can see that there are things going on that probably will hurt people from (the) order intake and onwards”.

A company that had seen its order intake rise last year was Nordex – to 7.95GW in 2021 from 6GW in 2020, with orders during the fourth quarter of last year even exceeding those of Vestas. But Nordex CEO José Luis Blanco in a recent interview told Recharge increased orders were not the result of gaining volume over value.

“As with our peers, we continued to negotiate new prices to pass through cost increases in order to protect our margins, and the strong order intake has proven that the market can take this.” Blanco said.


Nordex orders during the first quarter of 2022 receded to a more normal 1.17GW, down from 1.25GW a year earlier and much lower than those of the usually bigger rival Vestas once more.

Andersen highlighted that the discipline he was talking about must be “kept in both onshore and offshore.” Nordex only produces onshore wind machines.


Source:https://www.rechargenews.com/…

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