Jennifer Hiller, Biden Administration, WSJ discussed on WSJ What's News

WSJ What's News


Lull during what appears to be a boom for some answers. Let's bring in the wsj's jennifer hiller. She covers renewables and the energy transition from her base in houston jennifer. Glad you could be here. Hi mark thanks so much for having me on today. Jennifer looking at the data siemens gha mesa invest est two of the largest global manufacturers of turbines reduced profit forecasts for the remainder of the year general electric reported year over year growth in turbine sales but hasn't turned a profit in that segment this year. So that begs. The question has wind suddenly lost its luster so in this still very popular but they are definitely having some challenges in the industry with higher transportation costs big shipping cost increases raw materials increases. And there's a bit of policy uncertainty right now that they're grappling with okay so let's break down some of these barriers even further. Let's focus on the production costs and the challenges of shipping. I mean some of these turbines have blade spanning more than one hundred feet a piece. Is this just another example of the supply chain holdups. We've been seeing during the pandemic so in a lot of ways. This industry is dealing with the same kind of supply chain woes that all kinds of businesses have been dealing with. There's been of course a lot of raw materials increases with inflation. But as you mentioned these are very large blades. Really big machines and they're more complicated to ship than a lot of things. This is not something that fits on a cargo container so they have special ships. They have trucks that are specialized cranes that have to move these things and so it's a more complicated thing to try to ship to begin with. And then you have all of the backlogs at ports around the world and so they have had a little bit more probably struggle here than than some other industries and shipping costs according to wood. Mackenzie have gone up by about four times. That all can impact the bottom line on the topic of subsidies as you mentioned where does the biden administration stand on this. And how does that. Impact sales and revenue sent. This is really interesting because it's not an area that you would expect there to be any issues for this industry. Because the biden administration is clearly supportive of renewables and wants to encourage more growth in this industry and they want to add you know things like wind and solar power across the us that there is basically just not a lot of clarity about the extension of some tax credits and what forms those might take whether there would may be some kind of direct pay option. That could shake up. How projects get financed. There's just a lot of uncertainty that it sounds like maybe settled in the next several months. Maybe before the end of the year that will hopefully give them some clarity but it could sort of have some potential clients on the sidelines. Right now while they wait to see just. What's the environment going forward. Maybe they can also wait a little bit in see of transportation costs. Come down so there's a little bit of thinking in the industry that there are some clients that are on the sidelines. While they wait to see exactly what the tax credits are going to be and maybe if things improve transportation globally so there are all of these challenges now facing the industry with all of that said does wind power still have a viable future. I think so. The long term outlook is really strong for the wind industry. And i think this is. Maybe a temporary lull or a little hump to get over but their outlook is very strong. There are estimates from wood. Mackenzie that there's going to be about double the demand this next decade then. There was the previous decade for wind projects. So i think they have a very strong outlook. But they're just dealing with some headwinds right now. Jennifer hiller joining us from texas jennifer. Thank you thanks so much. Mark and finally as ambitious workers strive to progress in their careers in this new hybrid environment. Planning which days to go back into the.

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