Energy in Crisis: Key threats facing the wind industry

Wind energy generation has grown significantly over the last 30 years and compared to many other renewable energy sources, such as solar, wind is a more efficient power source, as well as releases less CO2 into the atmosphere.

Highlighting wind growth, onshore wind capacity grew from 178 GW in 2010 to 699 GW in 2020, while offshore wind has grown more proportionally, but from a lower base, from 3.1 GW in 2010 to 34.4 GW in 2020.

The investment in wind generation has similarly witnessed growth, with investment in this sector increasing by 20% in 2022, after a slowdown in 2021, leading to expectations of significant capacity deployment in 2023.

Geography

At present, the biggest contributor to wind generation is China, which was responsible for almost 70% of wind generation growth in 2021, followed by the United States (US) at 14% (where the sector supported over 120,000 jobs in 2022), as reported by the International Energy Agency (IEA). Given the growing tensions between Beijing and the West, there is a real incentive for energy stakeholders to diversify their energy resources.

Some other countries that rank within the top 15 energy producers include Mexico, which grew its wind capacity by 18.6% in 2021 to end the year with around 7.7 gigawatts of installed wind turbine capacity, Turkey, which has increased its wind capacity by an average growth rate per annum of 19.9% from 2011 to 2021, Brazil, which analysts expect to have at least 30 GW of installed wind energy capacity by 2024 and India, whose installed wind turbine capacity reached 40GW in 2021.

A key trait of wind energy is that the best locations for generation often are in remote parts of the world, with offshore wind power often harnessing the greatest power. Looking at some of the above countries in the top 15, there are likely to be several security concerns that are unique to each country.

Looking at Mexico, Oaxaca has stood out as a strong location for wind generation, due to its ideal topography. Specifically, its isthmus separates the area's eastern mountain chain, the Sierra de Chiapas, from its western mountain chains, the Sierra de Oaxaca, and the Sierra Madre del Sur, creating a tunnel effect through which strong winds flow.

While Oaxaca may be a strong contender for wind generation and has largely avoided cartel violence, it is one of the poorest states of Mexico, meaning property theft is an issue. Given wind turbines are outside structures, they are vulnerable to several security risks, including theft, vandalism, and sabotage. As such, analysis and risk mitigation are likely needed to understand these risks in locations such as Oaxaca.

Aside from the risks posed by criminal elements, the relations between countries also present a substantial threat to wind energy, especially in the event of a conflict. The recent case of Ukraine serves as an important example, shedding light on both the advantages and disadvantages associated with countries harnessing wind power.

Ukraine’s energy diversification

Ukraine's wind farms are predominantly situated in the regions of Zaporizhzhia, Mykolaiv, Odesa, and Lviv. All these areas have undergone Russian missile strikes since the conflict, resulting in substantial damage to critical infrastructure. Notably, Zaporizhzhia stands out as the most vulnerable due to it also housing the nuclear plant, a strategic asset of significance to both Russia and Ukraine.

Interestingly, despite the precarious nature of Ukraine's wind farms, the country has rapidly expanded its wind turbine installations since the Russian invasion. Surprisingly, Ukraine has outpaced England in terms of onshore wind turbine construction during this period.

Notably, Ukraine's Tyligulska wind power plant, located just 60 miles from the conflict's frontlines in the southern region of Mykolaiv, has emerged as the first wind power facility established within the active war zone. The plant has already begun generating sufficient clean electricity to power approximately 200,000 households, boasting 19 turbines with an installed capacity of 114 megawatts as of May 2023. Notably, as of October 2023, the plant's owner, DTEK, is also seeking a EUR400 million investment to expand the facility by adding another 64 turbines, potentially making it the largest provider of green energy in Europe.

Although it may appear counterintuitive to expedite wind power plant development during an ongoing conflict, this approach is grounded in the resilience of wind farms when compared to traditional thermal power plants. From a military standpoint, wind farms require a greater number of missiles to be destroyed, unlike thermal power plants which can be destroyed with a single strike. Following Russia's targeted missile campaign on Ukraine's energy infrastructure, the goal is to enhance the overall resilience of Ukraine's energy infrastructure to withstand future attacks.

Environmental risk

An additional concern for wind farms in several countries relates to their susceptibility to environmental factors. These outdoor installations are at risk of being adversely affected by severe weather conditions, including but not limited to strong winds, storms, lightning, ice, and snow, all of which can potentially harm the components of the turbines. This concern becomes more pronounced as increasing climate change leads to greater unpredictability and hazards in weather events.

The repercussions of damage to wind farms are twofold: not only do they result in substantial expenses, but they may also lead to a temporary reduction in power generation. As such, it is imperative to maintain ongoing vigilance and monitoring of this risk to gauge its severity.

The above overview illustrates the wide range of risks that the wind energy sector faces, ranging from criminal, geopolitical, as well as environmental. Our accompanying case study looking at wind farms in Senegal underscores the geographical divergence from traditional areas of wind generation, like China, but also the risks that come with this shift, such as unstable economies and the risk of armed conflict in the wider region.

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Each week, our Threat Intelligence team will be analysing a different energy industry as part of our Energy in Crisis series (including Nuclear, Wind, Solar, Hydroelectric and more). Follow us here or on LinkedIn to stay up-to-date with the latest analysis.‍