Vestas chief executive Henrik Anderson has called for a global reform of wind energy auctions to create “a less hostile business environment” for developers and end “a race to the bottom” in bidding wars.
He said many governments were allocating projects “with an outdated mindset” to drive down the cost of energy using “unsustainable” industry mechanics that result in “unviable” project economics and unrealistic project commitments.
Anderson pointed to London’s decision to increase ceiling prices by 66% for this year’s CfD allocation round as a “positive step” and urged other governments to follow suit by replacing uncapped negative bidding and concession-based systems with higher ceiling prices and revenue-sharing mechanisms.
Speaking as world leaders gather for the annual meeting of the World Economic Forum in Davos, Switzerland, between January 15-19, he added: “It is time to focus on what wind energy will deliver and not just what it costs.
“If governments really want to deliver lower power prices and build resilient energy systems, it’s time for action.
“This means entering a new era of reformed auctions.”