RENEWABLE ENERGY

Trump's Beef with German Wind Power

  • Why it matters

    Why it matters

    As president, Donald Trump could take measures to make the U.S. market less favorable to wind energy, which could hurt German companies like Siemens.

  • Facts

    Facts

    • U.S. president-elect Donald Trump is a long-time opponent of wind farms, arguing that they endanger wildlife and property value.
    • In 2013, Mr. Trump sued to prevent an off-shore wind park from being built near his golf course in Scotland.
    • In an interview with the New York Times, Mr. Trump complained that German companies play a leading role in manufacturing wind turbines.
  • Audio

    Audio

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People show their support as Donald Trump speaks in Charleston
Donald Trump has promised to revive the coal industry. German-built wind farms could suffer as a result. Source: Reuters

Donald Trump has a beef with wind turbines. They kill too many birds and they’re subsidized by the state, the U.S. president-elect told the New York Times in an interview this week. But there’s another reason he dislikes wind turbines, one that’s in keeping with the reality television star’s protectionist worldview.

“First of all, we don’t make the windmills in the United States,” Mr. Trump told the New York Times. “They’re made in Germany and Japan.”

Thomas Friedman, an editor with the newspaper, reminded the president-elect that General Electric, the U.S. engineering giant, also manufactures wind turbines in South Carolina.

“Well that’s good,” Mr. Trump responded. “But most of them are made in Germany, most of them are made, you know, Siemens and the Chinese are making most of them.”

That may be true: Germany is indeed one of world’s the leading manufacturers of wind turbines, and the United States remains its most attractive market. But companies like Siemens aren’t just exporting wind technology – they’re also investing in America domestically.

“The framework for wind-turbine manufacturers in the United States will worsen considerably under Trump.”

Sven Diermeier, Analyst, Independent Research

The German engineering powerhouse employs more than 50,000 people in the United States, hundreds of whom work in wind energy. The engineering company manufacturers rotor blades in Fort Madison, Iowa and the housing for components in Hutchinson, Kansas.

Mr. Trump’s comments don’t bode well for the U.S. operations of Siemens and other German companies such as Nordex and Senvion. But the president of Germany’s wind energy lobby, Hermann Albers, has adopted a wait-and-see approach toward the U.S. president-elect.

“President Trump is still in the transition phase,” Mr. Albers of the German Wind Energy Association, told Handelsblatt. “Let’s wait and see who will advise him on energy policy.”

Mr. Albers believes the German wind industry can demonstrate its value to Mr. Trump by pointing to German-owned plants in the United States.

“Renewables are domestic energy that support the goal of strengthening the U.S. economy and employment,” Mr. Albers said. “We should discuss that with the Americans.”

U.S. President Barack Obama inspects a wind turbine blade at the Siemens Wind Turbine Blade Manufacturing Plant in Fort Madison, Iowa
Siemens employs 50,000 people in the United States, makes the blades for wind turbines like this one at a plant in Fort Madison, Iowa, visited by President Barack Obama in 2010. Source: Reuters

Joe Kaeser, the chief executive of Siemens, also remains optimistic, at least in public. After Mr. Trump’s election victory, Mr. Kaeser told Bloomberg TV that the business world should “give him a chance, let’s see what we can do together and take the positive out of it.”

Investors, however, are more pessimistic. The shares of wind companies such as Nordex and Denmark’s Vestas dropped by double digits immediately after Mr. Trump’s election victory.

“Trump has made clear that climate protection and renewable energy are not priorities for him,” Sven Diermeier, with the firm Independent Research, told Handelsblatt. “He prefers coal and oil as energy sources…The framework for wind-turbine manufacturers in the United States will worsen considerably under Trump,” he added.

Mr. Trump’s opposition to the wind industry is personal. In 2013, he sued to stop an off-shore wind park from being built near his golf course in Scotland. Though the reality television star lost the legal battle, he could get back at the wind industry as U.S. president.

Indeed the president elect has already been testing out his newfound powers. British media this week reported the president-elect has asked Nigel Farage, the former UK. Indpendence Party leader and a close confidant of Mr. Trump, to lobby against the kind of offshore wind farms that have blocked the view of his golf course.

There’s more he could do after January 20, 2017. Mr. Trump could, for example, overturn President Barack Obama’s green energy plan. And his promise to slash corporate tax rates from 35 percent to 15 percent would weaken the incentives that wind and other renewables receive under the current rates, according to Arash Roshan Zamir, an analyst with Warburg Research.

“If Trump actually implements his tax reform, it would considerably weaken the U.S. support program [for green energy],” Mr. Zamir said.

 

Franz Hubik covers the renewable energy sector for Handelsblatt out of Düsseldorf. To contact the author: hubik@handelsblatt.com

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