Competition,capital accumulation,and the geographical organization of production in the North Atlantic offshore wind energy industry

Abstract

As offshore wind energy development expands throughout the advanced industrial world, the wind turbine manufacturing industry has been passing through a process of organizational and geographical restructuring. In terms of the dynamics of industrial organization, highly concentrated industrial conglomerates have gained a stronger position within the industry as the ownership of capital has been centralized through bankruptcies, mergers and acquisitions. Geographically, some regions are maintaining their pre-eminence within the international division of labour while other longstanding industrial clusters are being dismantled as production processes are being fragmented, transformed and dispersed to new regions. This article illuminates these dynamics of geographical organization through an analysis of (offshore) wind turbine manufacturing in Europe for deployment in Europe and the United States, advancing a unified approach to understanding changing modes of industrial organization and the development of the spatial division of labour. This unified approach is rooted in the examination of material transformations in the process of production, with attention to the specificities of wind energy as a natural resource. Taking up scientific advances made by Marx, radical industrial geographers and contemporary critics of political economy, the article demonstrates that the centralization of capital and the simultaneous spatial consolidation and dispersal of production have been necessary concrete forms of the development of the productive forces of social labour. The article concludes by reflecting on some of the barriers to the increasing fragmentation of wind turbine manufacturing and the potentialities for working-class organization borne by the centralization of capital and the consolidation of production.

Keywords

Competition capital accumulation wind energy labour restructuring

The wind energy industry is moving offshore. In April 2023, the energy ministers of nine European countries met in Oostende, Belgium to sign a declaration on the future of offshore wind energy, affirming their intent to support the development of 120 gigawatts (GW) of electricity-generating capacity in the North Sea by 2030 and 300 GW by 2050. In the United States, where the growth of offshore wind energy had been stalled for almost two decades (Westgard-Cruice and Aoyama, 2021), the Biden Administration early on set a target for 30 GW of capacity along the East Coast by 2030. In China, which has for several years now been the world’s largest national market for offshore wind, the Shandong province alone is aiming to reach 35 GW of total capacity by 2030, nearly a third of the North Sea countries’ combined target for that same year. Amidst this move offshore, some historically significant shifts are underway in the geography of production, with project developers, equipment manufacturers and marine engineering contractors expanding into new markets and restructuring existing operations. Some of the regions where the wind energy industry first emerged are maintaining their pre-eminence in the international division of labour, while industrial clusters in other pioneering regions are being dismantled as production processes are transformed, fragmented and dispersed to new territories. Concurrently, major shifts have also been underway in the industry’s modes of industrial organization, as the ownership of capital has been centralized across various branches of the offshore wind energy industry and as industrial conglomerates have attained a stronger competitive footing in the production of key equipment.

The purpose of this article is to advance a ‘unified approach’ to the problem of ‘geographical organization’ (Walker, 1988) in the North Atlantic offshore wind energy industry.¹ This is done by grounding the dynamics of industrial organization and transformations in the spatial division of labour in changes in the materiality of the labour process, emphasizing how the material specificity of offshore wind power generation and the contradictions between the production of use value and the production of surplus value shape the dynamics of technical change and the organizational and geographical restructuring of production. The offshore wind energy industry is distinguished by the fact that it is a ‘terraqueous’ (Campling and Colás, 2021: 3) natural resource industry integrating various branches of the social division of labour both on land and at sea, encompassing the divisions of project development, equipment manufacturing, marine construction and wind farm operations and maintenance (O&M). Given the exceptionally challenging natural conditions faced by capitals invested in project development, marine construction and O&M, developers have tended to compete with one another by installing ever-larger turbines. In turn, the continuous demand for increasingly powerful means of production has driven the centralization of capital and the simultaneous dispersal and spatial consolidation of production in some of the key branches of wind turbine manufacturing.

The main theoretical contribution of the article is to show the utility of a particular Marxian approach to analysing the development of the global renewable energy industry. This approach takes up the scientific advances made by Marx (1976) in his critique of political economy, as well as long-neglected scholarship by radical industrial geographers focused on the geographical organization of the labour process (Gough, 1991, 1992, 1996, 2013; Storper and Walker, 1989; Walker, 1988, 1989) and more recent research on the geographies of global production conducted by researchers affiliated with the Centro para la Investigacíon como Crítica Práctica (CICP) in Buenos Aires (e.g. Grinberg, 2023; Starosta, 2010, 2016; Starosta et al., 2024). Despite some methodological differences between these latter approaches, they share some essential foundations that make them well suited to the analysis of the problems under investigation. In contrast with Marxist approaches that depart from general theories of ‘uneven geographical development’ (Smith, 2008) or Harvey’s (2006) concept of the ‘spatial fix’, both of which tend to remain in ‘the realm of high abstraction of capital theory’, the materialist approaches drawn on in this article all seek to explain the organizational and spatial dynamics of capital accumulation ‘by descending into the nuts and bolts of production’ (Walker, 2006: 105; see also Charnock and Starosta, 2018: 332–333; Gough, 2013: 3–14). In analysing processes of commodity production both as processes of valorization and material transformation, these specific approaches are all attempts to understand how capital’s ‘coercive laws of competition’ (Marx, 1976: 433) assert themselves within particular industries. In synthesizing these overlooked approaches, I show the enduring relevance of central Marxian concerns and categories, focusing on the production of ‘relative surplus value’ (Marx, 1976: 429–639) through the continuous introduction of new means of production, the dynamics of the concentration and centralization of capital, and the contradictory tendencies towards the spatial fragmentation and consolidation of production.

This article was written as part of a research project focused on the development and transformation of the North Atlantic offshore wind energy industry and is based on data from three main sources. First, over the course of 4 years, I analysed hundreds of written documents dealing with the major technological challenges faced in the offshore wind energy industry, the fundamental dynamics of technical change, processes of investment, disinvestment, market concentration and changes in capital ownership. These documents were primarily scientific publications in various engineering disciplines, news articles published in the specialized industry press, (semi-)annual market reports by national and international industry associations, annual reports from some of the largest firms invested in the (offshore) wind energy industry, and publications commissioned and published by international organizations and national energy ministries. Second, I gathered primary data from panels, speeches and exhibitions at industry conferences in Germany, Denmark and the United States in 2022 and 2023. Third, I conducted 50 in-depth, semi-structured interviews with workers in the (offshore) wind energy industry, trade union representatives, researchers in various natural science and engineering disciplines related to the wind energy industry, and representatives of wind farm developers, equipment manufacturers, industry associations and state agencies in Germany, Denmark, the United Kingdom and the United States.

Following the introduction, the article proceeds through three main sections and a conclusion. In the first main section, ‘Capitalist competition in the offshore wind energy industry and the changing organizational and spatial dynamics of wind turbine production’, I outline some of the most significant changes in the geographical organization of the North Atlantic offshore wind energy industry over recent years. In the second main section, ‘Capitalist competition, the production of relative surplus value, and the organizational and spatial dynamics of production’, I develop the general approach needed to comprehend dynamics of organizational and spatial transformation in relation to changes in the material process of production. In the third main section, ‘A unified approach to the analysis of industrial organization and the changing spatial division of labour in the North Atlantic offshore wind energy industry,’ I demonstrate the potential of the approach developed in the second main section by advancing a unified explanation of the dynamics summarized in the first main section, departing from the challenging natural conditions faced by capitals invested in the offshore wind industry and analysing how these conditions shape the dynamics of competition, the particular forms and pace of labour process change, and the organizational and spatial dynamics of wind turbine manufacturing. At the end of this third main section, I reflect on the potential political significance of the analysis, arguing that it can shed light on the potentialities faced by workers concentrated in space and employed by the same firms to collectively struggle for more universal improvements in working conditions and the conditions of reproduction of their labour-power across various job categories and geographical locations. The conclusion summarizes the arguments advanced and briefly sketches a program for future research.

Capitalist competition in the offshore wind energy industry and the changing organizational and spatial dynamics of wind turbine production

Given the complexity of the total process of offshore wind energy development, it is not possible to analyse the dynamics of geographical organization in every branch of the industry within the space of one article. Therefore, in this paper there is a specific focus on two of the main branches of industry involved in the production of wind turbines – nacelle assembly and blade manufacturing. Nevertheless, in order to explain the dynamics of industrial organization and the changing spatial division of labour in these two branches at the heart of the industry’s complex production system, it is necessary to understand how wind power is produced offshore and what kind of relations prevail between the capitals invested in different divisions and branches of the industry.²

As mentioned in the introduction, an offshore wind project goes through four main phases: project development, equipment manufacturing, installation and O&M. Project development begins with offshore site investigations to evaluate the feasibility and profitability of building and operating a wind power plant in a particular area of the ocean. These investigations are followed by the design of the wind farm and the transmission infrastructure and the agreement of a contract to sell electric power to states, quasi-state agencies and/or large industrial consumers. All this pre-construction work is followed by extensive, multi-scalar permitting processes and, in the final crucial step before construction, the securing of financing in the form of debt or equity (Christophers, 2022: 1524).

After financing comes the actual process of project development, which consists primarily of the detailed spatial planning of the wind farm to maximize power production and the customized engineering, production and installation of the various pieces of equipment composing the power plant. Some of the most essential means of production are the foundations on which the turbines stand, the intra-array cables that form a circuit between the wind turbines, the export cables that transmit electric power from the power plant to the onshore grid, electrical substations that step up the electricity to a higher voltage to make this transmission process more efficient, and the wind turbines themselves, each of which consists of a steel tower, fibreglass rotor blades and a ‘nacelle’ housing the electric generator and various other electrical and mechanical sub-systems. Once all these pieces of equipment are installed and the offshore wind farm is commissioned, it must be operated and maintained to ensure the reliable delivery of electric power.

At an early stage in the project planning process, developers procure turbines from original equipment manufacturers (OEMs), with whom they cooperate closely throughout the later stages of project planning, the turbine installation process and the first 5–10 years of plant operations, when the turbines remain under warranty. Once the turbines, foundations and other key means of production are produced, developers turn towards installation, for which they typically sub-contract with large marine engineering firms specialized in offshore construction and dredging (Afewerki and Steen, 2023: 559). Once the power plant is commissioned, it is usually operated and maintained primarily by the project developer, which sometimes sells shares in the project to investment funds to raise money capital for the development of new projects, thereby accelerating the renewal of the circuit of capital. In terms of the typologies developed by Yeung and Coe (2015), developers are the ‘lead firms’ that assume the main organizational responsibility (and financial risk) of integrating the various divisions of the offshore wind production system, while marine engineering contractors and turbine OEMs are the developers’ main ‘strategic partners’ (Afewerki and Steen, 2023: 557), both of which manage large, spatially distributed networks of sub-contractors and component suppliers.³

Having emerged in the late 1970s, in an era of the growing internationalization of productive capital, the modern wind energy industry has been a profoundly global industry from the beginning (Nahm, 2021). However, unlike the solar PV manufacturing industry, which has gone through a very recognizable process of relocation to East Asia over the past two decades (Binz et al., 2017), the wind turbine manufacturing industry remains much more polycentric. Although turbine OEMs operating in Europe and North America source many of their electrical and mechanical components from East Asia, the final production of wind turbines is roughly proportionate to the total volume of demand in those specific territories with the most wind power capacity installed, namely China, the European Union, the United States and India.⁴ Generally, the same has been true within the offshore wind energy industry in particular, with the caveat that developers constructing the first offshore wind farms along the U.S. East Coast have been importing turbines from Europe, since there are not yet any factories in the United States equipped to manufacture turbines for deployment offshore. Now, just because the global wind energy industry has remained polycentric as it moves offshore, this does not mean that the shift has not brought with it other changes in geographical organization. As the wind energy industry’s offshore market segment has emerged as something of an industry in its own right, the two main branches of wind turbine production (nacelle assembly and blade manufacturing) have been going through a major process of organizational change and geographical restructuring.

Within and across these two branches, there has been a drive towards the centralization of capital, a process of market concentration, and the vertical reintegration of production over the past decade. By the end of 2023, after a decade of many bankruptcies, mergers and acquisitions, only two companies (Siemens Gamesa and Vestas) accounted for 92% of all wind turbines installed offshore in Europe (WindEurope, 2024b: 23), and although these firms are now facing increasing competitive pressure from some of the leading Chinese OEMs (e.g. Mingyang, Goldwind), they have only one challenger emerging from within the European and North American wind energy industry (GE Vernova) (Musial et al., 2023: 78–79). Beyond the fact that there are so few firms competing in these branches, it is also notable that two of the three (Siemens Gamesa and GE Vernova) are part of industrial conglomerates in which the mother company still holds major shares. Finally, in contrast with some firms’ strategies within the onshore wind industry, the production of blades for offshore wind turbines is still undertaken primarily by the OEMs themselves, as opposed to sub-contractors.⁵

Spatially, the main branches of wind turbine manufacturing have been undergoing a process of simultaneous concentration and dispersal. First, as the ownership of capital has been centralized over the past decade, the manufacture of the newest generation of nacelles has been consolidated at a few leading production sites in Denmark, Northern Germany and the north-west of France, the first two being territories where the modern European wind energy industry first emerged. Second, reproducing spatial patterns that have unfolded in the production of onshore wind turbines, there is a growing dispersal of blade manufacturing to lower-wage regions where the (offshore) wind energy industry is entirely new, namely Southern Italy and Northwestern Poland. This two-fold movement turns on the concentration of workers with specific productive capacities within particular territories and on the international political-economic fragmentation of the working class, which allows capital to take advantage of the differentiated conditions of reproduction of labour-power in these regions. However, the fact that this dispersal remains confined to Europe shows that there are still major barriers to the further fragmentation of (offshore) wind turbine production and the relocation of key manufacturing activities to other world regions. Now, in order to move from the description of these organizational and spatial dynamics to a unified theorization of them, it is necessary to consider the internal relations between transformations in the labour process, shifts in industrial organization, and the ‘inconstant geography of capitalist industrialization’ (Storper and Walker, 1989: 34).

Capitalist competition, the production of relative surplus value, and the organizational and spatial dynamics of production

The historical specificity of the capitalist mode of production exists in the fact that the social division of labour is established indirectly through the exchange of commodities made by seemingly isolated private and independent producers (Starosta et al., 2024: 7–55). The aim of these private producers is not simply the production of use-values as such, nor even the production of use-values as bearers of value, but the production of more value than had been required to set social labour in motion, that is, the production of surplus value (Marx, 1976: 300–301). As the capitalist mode of social cooperation develops, and as the human transformation of nature takes on ever-more complex forms, general standards of productivity emerge within each branch of the social division of labour. If an individual capital can exceed prevailing standards, then they can sell their commodities at a price above their individual price of production but below the market price of equivalent and/or inferior commodities, thereby earning an extraordinary profit while also claiming some or all of the market share of their competitors (Starosta et al., 2024: 124–146; Storper and Walker, 1989: 48–58).

Historically, capital’s most potent method of heightening the productive powers of social labour has been technical change, which typically takes the form of the increasing mechanization or automation of the various dimensions of the labour process. As workers’ subjective capacities for the conversion and transfer of the objects of labour, the assembly of components, and the integration and regulation of production tasks are codified and objectified within the system of machinery, capital is typically able to raise the productivity of human labour (Gough, 2013; Grinberg, 2023; Storper and Walker, 1989; Walker, 1989). As new techniques of production become generalized across a given branch, new standards of productivity are established, and the prices of production of commodities tend to fall, thereby directly and indirectly lowering the value of the goods consumed by the working class and contributing to the production of ‘relative surplus value’ (Marx, 1976: 433–436).

Technological change and the organizational dynamics of capital accumulation

In general, the production of relative surplus value through continuous technical change is necessarily realized through the growing concentration and centralization of capital within and across branches of industry (Marx, 1976: 779–780). As firms accumulate surplus value as capital and as the total magnitude of their capital increases, they are able to invest more money capital in sub-dividing and mechanizing complex labour processes, developing qualitatively new products, and expanding the scale and scope of their operations (Storper and Walker, 1989: 50–54). However, because individual capitals tend to accumulate at different rates, and since they enter into a given branch of industry at different levels of concentration, not all firms are able to reach the magnitude of capital required to keep pace with generalized productivity standards through the processes of accumulation and ‘simple concentration’ alone (Marx, 1976: 777). Therefore, the organizational centralization of capital through mergers and acquisitions becomes one of the necessary concrete forms through which the productive forces of social labour are developed. This is particularly the case in those branches of production with long turnover periods, in which ‘extended operations of long duration require greater advances of money capital for a longer time’ (Marx, 1978: 433).

In opposition to the centripetal forces of the concentration and centralization of capital, there is also a tendency for individual capitals to be spun off as the division of labour is deepened, and for firms to form that are specialized in the performance of specific tasks within a production-system (Marx, 1976: 777). When individual capitals are separated organizationally and linked together through subcontracting relationships, the contracting firms are able to specialize more narrowly on core labour processes, benefit from the indirect exploitation of cheaper labour-power, and shift some of the necessary costs of circulation onto subcontractors while maintaining tighter control over the speed and quality of production than would be possible through incidental forms of market exchange (Starosta, 2010: 552–555; Starosta et al., 2024: 174–175; Walker, 1988: 389–391). However, as the natural sciences become increasingly central to the development of the productivity of social labour, and as research and development (R&D) labour attains a new centrality within the overall process of production, then leading firms need to have access to the necessary magnitude of capital required to drive forward several forms of technical innovation at different stages of technological readiness concurrently, investing in multiple new R&D activities without any guarantee of success and before all such investments have been fully valorized. Therefore, as the process of production of capital is progressively ‘transformed into a process of the technological application of scientific knowledge’ (Marx, 1976: 775), then the tendency towards the centralization of capital can assert itself all the more forcefully in the form of the vertical (re-)integration of production (Starosta et al., 2024: 185).

The spatial division of labour and the geography of industrialization

Beyond heightening the productivity of social labour through technological change, capital can also seek to raise profits by decreasing expenditures on constant and variable capital. While there are many methods of cutting costs (Gough, 2013: 54–56), it is something that firms and whole industries often seek to accomplish through the deepening of the division of labour and the relocation of some tasks to territories where they can access cheaper inputs and labour-power with lower costs of reproduction (Grinberg, 2023: 176–178; Starosta, 2010: 547). That said, the ability of any capital to relocate production is always a function of its ‘locational capabilities’, meaning its capacities to divide and reintegrate complex production processes, its freedom from particular natural conditions and reserves of qualified labour-power, and its financial and organizational capacities ‘to secure what it needs – labour, suppliers, buyers – at a given location’ (Storper and Walker, 1989: 73–74).

In general, there is a tendency for technical change to free capital from dependence upon particular workers with embodied productive capacities (i.e. ‘skills’). As such, the objectification of embodied tacit knowledge is often part of the fragmentation of product design and manufacturing and the dispersal of some branches to new territories (Grinberg, 2023: 116–122; Starosta, 2010: 547). However, workers with advanced technical and scientific skills are also needed to organize processes of technical change on site, to operate advanced industrial machinery, and to continuously develop new products (Starosta, 2016: 87; Walker, 1989: 82–83). Therefore, the drive to mechanization can also take the form of the consolidation of different stages of the overall process of production and its continued concentration in space (Gough, 1991: 438, 2013: 165–168), particularly when new products are continuously being introduced. Not only are the social productivity of labour and the reliability of manufactured machinery generally enhanced through intensive collaboration across product design and manufacturing (Gertler, 1995), but many forms of new product development and production technique innovation can only be effectively carried out within the context of high-volume serial production (Schwarz-Kocher et al., 2019: 77–84). Conversely, when processes of mechanization are held back for whichever reason and the demand for labour-power grows in proportion with the total volume of production, then competitive pressures tend to increase towards relocation to territories with lower costs of reproduction. In such instances, workers bearing suitable forms of labour-power must still be found and/or trained to work according to existing specifications at the new location, and any increased spatial distance to the final site of (productive) consumption must not translate into too large increases in the costs of circulation. In sum, the relation between technical change and the changing spatial division of labour is complex and product-specific, such that the analysis of these dynamics needs to focus on the materiality of the process of production within each particular branch of capitalist industry (Butollo, 2021; Storper and Walker, 1989). This is done in the following section, which seeks to explain the particular forms taken by processes of organizational change and geographical restructuring in the manufacture of offshore wind turbines.

A unified approach to the analysis of industrial organization and the changing spatial division of labour in the North Atlantic offshore wind energy industry

In section ‘Capitalist competition in the offshore wind energy industry and the changing organizational and spatial dynamics of wind turbine production’, some essential changes in the geographical organization of the offshore wind energy industry were summarized, namely the centralization of capital and market concentration in the production of wind turbines, the organizational consolidation and spatial concentration of nacelle assembly in a few of the ‘territorial production complexes’ (Storper and Walker, 1989: 13) where the wind energy industry first emerged, and the dispersal of blade production to new territories. The aim of this section is to show that these tendencies are not simply the result of individual firm strategies, but rather, that these organizational and spatial changes ought to be understood as necessary forms of realization of the alienated development of the productive forces of labour throughout the offshore wind energy industry as a whole. In order to understand the paths of ‘geographical industrialization’ (Storper and Walker, 1989: 9) that have unfolded within this particular industry, it is first necessary to consider the main determinants of output in the production of electric power from wind energy and some of the ‘specificities’ (Baglioni and Campling, 2017) of offshore wind as a natural resource.

The main determinant of a wind turbine’s output is the machine’s ‘nameplate capacity’, or the maximum potential output of the electric generator. Though shaped by many factors, nameplate capacity is largely a function of the strength of the magnetic field between the rotor and the stator, which is determined in doubly fed induction generators (DFIG) by the diameter of the copper wire used in the coil winding and in permanent magnet direct drive (PMDD) generators by the energy density and total volume of the permanent magnets. So, whichever type of generator is being built, there is a strong positive correlation if not a one-to-one relationship between the turbine’s nameplate capacity and the size of the rotor and the stator composing the generator. A second key determinant of output is the ‘capacity factor’, or the ratio between actual output and maximum potential output. This can be heightened by lengthening the turbine’s rotor blades, which raises the diameter of the area swept by the turbine and thereby the amount of kinetic energy intercepted and transformed. Third, another key determinant of output is the ‘hub height’ of the turbine, or the distance between the ground and the generator, largely because wind speeds tend to be greater at higher altitudes.

So, given these three main determinants of turbine output, project developers operating both on- and offshore have attempted to raise their total output and lower their prices of production by introducing increasingly powerful turbines with higher towers and longer blades (Millborrow, 2020). Although installation, operations and maintenance processes have become somewhat more complex and more costly per wind turbine, the shift towards turbines with higher nameplate capacities and higher capacity factors has enabled developers and contractors to lay out proportionally less capital on these stages of the production process when measured against the total power output of the plant (Lacal-Arántegui et al., 2018). At the same time, this shift also comes with certain risks, since ‘each shutdown of a 10 MW turbine would cause a loss of production equivalent to two 5 MW turbines’ (Hofmann and Sperstad, 2014: 232). Reliability, therefore, has become increasingly crucial, both from a use value perspective and in terms of the valorization of the developers’ capital. This is even more so in the offshore wind industry, since the very natural conditions that make power production most favourable – consistently high wind speeds – tend to be spatially correlated with high humidity, high precipitation and high waves, all conditions that can exert wear and tear on the equipment. So, turbine OEMs wanting to remain competitive in both the on- and offshore markets have needed to continuously introduce ever more powerful machines with longer, wider and thicker blades while maintaining the reliability of their turbines and strengthening their capacity to withstand structural loads. While this competitive dynamic has had consequences for geographical organization across and between the on- and offshore wind energy industries, the shift in turbine size and its effects have been all the more significant as the share of new power capacity installed offshore has grown.

Material transformation and organizational change in the manufacture of wind turbines

Within Europe, the share of new wind power capacity installed offshore has steadily risen over the past two decades, from a 3-year rolling average of 3.1% in 2004 to 14.6% in 2016 and 16.7% by 2023 (EWEA, 2015: 11; WindEurope, 2024b: 13). Towards the end of this period, the nameplate capacity of newly installed offshore wind turbines increased sharply. As recently as 2014 and 2015, turbines of 3.6 MW capacity with blades measuring 58.5 m were being installed offshore in the North Sea. By August 2023, GE Renewable Energy’s 13 MW Haliade-X turbine was generating electric power in U.K. waters as its 107-metre-long blades rotated at the Dogger Bank offshore wind farm. Meanwhile, by the end of 2023, multiple Chinese OEMs already had 16 MW turbines installed offshore (Buljan, 2023). With competition from Chinese firms like MingYang and Goldwind on the horizon, the three main Western OEMs have all recently developed offshore wind turbines with capacities between 14 and 15 MW, with some of these machines bearing blades up to 115.5 m in length. As noted above, this continuous increase in offshore wind turbine capacity and the doubling of the typical length of rotor blades over the course of the past decade has necessarily unfolded through major transformations in industrial organization.⁶

Following a series of bankruptcies, mergers and acquisitions between 2014 and 2017 (Backwell, 2018: 146–157), there are now just three OEMs from Europe and North America left competing in the market for offshore wind turbines – Siemens Gamesa, Vestas and GE Vernova. This is largely because the magnitude of capital needed to rapidly design, develop, test and serially manufacture ever more powerful turbines that are capable of withstanding the meteorological and oceanographic conditions of the North Atlantic Ocean constitutes a major hurdle to smaller capitals.⁷ In addition, as turbines grow in their size and capacity, ‘bigger balance sheets’ are required ‘to cope with any claims on warranties due to turbine failure, particularly in the offshore arena’ (Backwell, 2018: 33). In recent years, this point has become even more salient. With the continuous demand for ever-larger turbines, the shortening of product cycles and speed-up of time-to-market, there has allegedly been insufficient quality testing and a growth in the regularity of serial defects, component failures and mechanical breakdowns across the Western wind energy industry. As a consequence, OEMs with turbines under warranty have been saddled with billions of euros in costs related to turbine maintenance and component replacement.⁸ These hurdles help explain not only the process of the centralization of capital and the very high degree of market concentration, but also the type of firm that remains actively competitive in offshore wind turbine manufacturing. Conglomerates like Siemens and GE have been capable of shouldering the costs of continuous innovation and warranty fulfilment on account of their diversification and the substantial profits they routinely register in other major branches of industry.⁹ Vestas, meanwhile, has recently had its balance sheet brought back into the black with profits from the company’s Service division, which provides maintenance, parts replacement and various other technical solutions to increase the output of turbines owned and operated by electric utilities and independent power producers (Vestas, 2024: 6).

With the growing concentration and centralization of capital in the production of offshore wind turbines, the tendency has been largely unidirectional. When it comes to the spatial dimensions of geographical organization, the dynamics have been more complex. The following sections focus on some of the most significant trends in the restructuring of wind turbine manufacturing, grounding tendencies towards the simultaneous concentration and geographical dispersal of production in the changing materiality of the production process and the differential ‘locational capabilities’ (Storper and Walker, 1989: 73) of capital within the different branches of wind turbine manufacturing.

Material transformation and spatial consolidation in the manufacture of wind turbines

Since its emergence in the late 1970s, the wind energy industry has gone through many rounds of restructuring as new industrial clusters have sprung up, as technical change has enabled the geographical relocation of production, and as markets have become more or less attractive based on changing subsidy regimes (Backwell, 2018). In the present moment, with increasing competition from China and amidst major strains on profitability, the main Western turbine OEMs have been reorganizing their production systems at a continental scale, across and between the on- and offshore wind energy industries. This restructuring process can be summarized in three main movements. First, we have seen the closure of ‘backward’ plants outfitted to produce low-capacity nacelles and shorter rotor blades and the reallocation of new investment into the purchase of means of production and labour-power for the manufacture of offshore wind turbines. Second, there has been a consolidation of production onto more advanced plants where the intellectual and manual workers are capable of continually introducing and manufacturing the newest wind turbine models, with major expansions underway at a few leading sites in Denmark and Northern Germany. Third, some new investment is now being dispersed to lower-wage coastal territories where the wind energy industry is new, namely Southern Italy and Northwestern Poland. In one way or another, these movements all express the historical tendency for a growing share of wind energy development to be undertaken offshore, the industry-specific competitive dynamics of new product introduction, and the political-economic fragmentation of the various regional and national divisions of the European working class.

As project developers have demanded more powerful wind turbines, the market for smaller-capacity nacelles and shorter rotor blades has essentially collapsed. In the process, factories set up to produce nacelles and blades for lower capacity turbines have become obsolete. While some of these sites have been brought up to prevailing standards through renewed investment, this could not have happened everywhere without a major expansion in the size of the market. This is largely because the magnitude of investment per unit of output has increased with the growth in turbine size, and with a minimum volume of output necessary for profitable production at any given site, OEMs have tended to disinvest from their more ‘backward’ production sites while concentrating new investment at a smaller number of plants, particularly those outfitted to manufacture nacelles and blades for the newest offshore wind turbines (Buljan, 2024; Marketwire, 2023). While several manufacturing sites have been closed down across Europe over the past years, the ongoing shift has particularly affected plants in Spain, where Vestas shut down two nacelle and generator factories in 2018 and 2021, and where Siemens Energy ‘has been gradually dismantling’ its industrial footprint, having ‘closed down three Siemens Gamesa Renewable Energy SA plants’ (Gualtieri and Eckl-Dorna, 2022) absorbed in the 2017 merger of Siemens Wind Power with the Spanish OEM Gamesa.

Whereas Spain has been bypassed by new investment in turbine manufacturing associated with the growth of the offshore wind energy industry, investment has flowed into the expansion of production in Denmark, one of the key ‘territorial industrial complexes’ (Storper and Walker, 1989) where the wind energy industry first emerged, and to some extent also into Northern Germany, the north-west of France and the English region of East Yorkshire. At the time of writing, the industry-leading OEM Siemens Gamesa assembles the nacelles for the newest and most powerful offshore wind turbines in Brande in Central Denmark and in the coastal town of Cuxhaven in the Northern German state of Lower Saxony, with the production of older model nacelles undertaken in Le Havre in Normandy. Meanwhile, the firm’s offshore wind turbine blades are developed and manufactured in Aalborg in Northern Denmark, with additional production at sites in Le Havre and in Kingston-Upon-Hull, England. Vestas’ offshore wind turbine nacelles are assembled in the port of Odense in Southern Denmark, while the blades for the company’s flagship offshore wind turbine blades are manufactured in the town of Nakskov on the southern Danish island of Lolland. GE Vernova, which still has a smaller market share than Siemens Gamesa and Vestas, has its offshore turbine nacelle factory on the outskirts of the city of Saint-Nazaire in the French département of Loire-Atlantique, while its fully owned subsidiary LM Wind Power manufactures blades for GE’s Haliade-X offshore wind turbine series in the city of Cherbourg in Normandy. In sum, the development and production of new nacelles and blades has been strongly concentrated in Denmark, where all the western OEMs invested in offshore wind turbine production maintain leading manufacturing plants and/or R&D centres. In addition, some workers in Northern Germany and the north-west of France are actively participating in the development of the productive forces through the design and manufacturing of the most advanced wind turbines outside of China, while England occupies a more marginal position in the international division of labour through the manufacture of rotor blades designed, developed and introduced elsewhere. So, with the re-consolidation of production in just a few territories where wages are well higher than the European average, it is evident that capital is rather constrained in its ‘locational capabilities’ (Storper and Walker, 1989: 73). In explaining why this is the case, it is necessary to consider the relation between the turbine manufacturing process and the process of offshore wind power generation in which the turbines are put to use as means of production.

As discussed above, the reliability of (offshore) wind turbines is crucial to the valorization of the developers’ capital, especially as the machines grow larger. This is not only because the amount of power forgone during maintenance becomes greater as the capacity of each turbine increases, but also because the costs of replacing large components are significantly higher offshore than they are onshore given the heavy lift vessels and specialized labour-power required and the narrow window of favourable weather when major maintenance tasks can be safely performed. In the difficult weather conditions that prevail offshore, condensation is one of the main causes of electrical faults in wind turbines, and while no nacelle can be completely airtight, each one needs to be assembled in such a way as to keep out as much humidity and salt as possible. Within the nacelle, the main components of the electric generator – the rotor and the stator – need to be closely fitted with an accuracy of up to hundredth of a millimetre such that the air gap between these parts is equivalent around the whole circumference of the generator. If that gap is uneven, then the output of electric power will end up being suboptimal and the potential for mechanical damage within the generator will increase. With such a low tolerance for error in the fitting of electrical and mechanical subsystems and a constant renewal of product lines, the nacelle assembly process has historically been characterized by close cooperation between electro-mechanical technicians, process engineers, and product engineers.¹⁰ In other words, the integration of the design, manufacturing and testing of new model wind turbine nacelles necessitates a high degree of collaboration and face-to-face contact between semi-skilled workers and skilled engineers with varying specializations and the ability to articulate innovations in the engineering and operations of wind farms with advances in turbine design and manufacturing. To some extent, OEMs have been able to attract skilled and semi-skilled labour-power towards the specific localities where production is based, but much of this attraction has occurred within the territories of Denmark and Northern Germany, where there is already a very dense concentration of mechanical, structural, electrical and power systems engineers with specialized education and years of practical experience in the wind energy industry. Insofar as some of these skilled workers do also originate from abroad, many of them have developed their labour-power and become integrated into the labour market of these territories through internationally oriented educational programmes.¹¹ Now, while tendencies towards the spatial concentration of production continue to dominate, there are also indications that new investment in offshore wind turbine production is beginning to be dispersed, particularly in the manufacture of blades, but also to some extent in the assembly of nacelles.

The fragmentation of the production process and the increasing dispersal of production

Facing pressures on profitability related to the inflated costs of raw materials, the high costs of warranty fulfilment, and growing competition from innovative and highly concentrated Chinese firms, Western OEMs are investing in the expansion of production in regions of Europe where the costs of labour-power are much lower than in Denmark and Northern Germany. This is seen, for example, in Vestas’ strategy to re-tool their plant in Taranto in Southern Italy to produce blades for the firm’s new 15 MW offshore wind turbine and in the firm’s move to develop a factory complex in Szczecin, Poland equipped to manufacture both blades and nacelles for the same model.

The enhanced capability of OEMs to relocate blade production to regions with lower costs of labour-power is rooted in the increasing codification of the blade manufacturing process. The general compulsion for them to cut costs by reducing their expenditure on variable capital is compounded by the fact that the manufacturing process remains ‘immensely time-consuming and extremely labour-intensive due to the manual production required: for each turbine blade, around 1400 fibreglass sheets have to be placed in a mould by hand’ (Siemens Gamesa Renewable Energy, 2022: 24). While the mechanization of blade manufacturing is possible, it has proven to be very complex on account of the materiality of the fibreglass sheets and the peculiar shape of the blade mould. In addition, these technical obstacles are further compounded by the ‘pressures of value production and realization’ (Gough, 1996: 2066). With developers demanding ever-larger wind turbines, investment in the fixed capital needed to automate the ‘layup’ of fibreglass sheets has proven unprofitable. With continuous increases in the length and width of turbine blades, much of the machinery purchased to mechanize the production of one particular blade model would become obsolete well before passing all of its embodied value onto the final commodities. Faced with this predicament, OEMs have responded by shifting investment in blade manufacturing capacity towards more peripheral regions in Europe, where they have found the combination of workers bearing the skills demanded by the production process. While most of the workers involved in the blade manufacturing process are production operatives, many of whom come to the job without specific prior training, process engineers with a university education and experience in the design and structural analysis of composite materials are also required. This latter type of worker is increasingly available in, or willing to move back to, the regions where blade manufacturing is now expanding, a set of circumstances that has come about through the growing Europeanization of higher education and the development of skilled labour-power originating from more peripheral regions at universities in the European core where there are specializations in materials science, wind power engineering and aeronautical engineering.¹²

Now, the fact that the geographical dispersal of production functions as a method to cut costs should not pass as a self-evident matter of course. Rather, geographical unevenness in the conditions of work and the reproduction of labour-power is a historical product of the incapacity of the working-class to universalize working conditions at ever-higher scales. While workers have the potential to act as a class in shaping the economic geography of capitalism (Herod, 1997), the reality of the past several decades is that working-class organizations have been entirely incapable of developing forms of transnational political mediation adequate to the heightened ‘locational capabilities’ (Storper and Walker, 1989: 73) of capital in many key industries. Competition between firms and localities thus unfolds as a seemingly objectivistic process (Gough, 1991, 1992), and wage workers dependent on the competitiveness of specific firms and the reproduction of the accumulation process within particular territories have often adopted ‘concession bargaining’, aiming ‘to defend the national, regional or local production, and the particular enterprise, production site or department against (potential) competitors, closures or relocation’ (Hürtgen, 2021: 74). Given historical differences in the capacity of various national and regional fragments of the working class to make advances in the sale of labour-power to capital (Starosta, 2010, 2016), the geographical organization of production is constituted partly through the very absence of a powerful transnational workers movement, which reproduces a situation wherein individual capitals can compete by cutting costs through relocation. That being said, there are major barriers to the further organizational and spatial fragmentation of production, and these barriers could be the basis for progressive forms of working-class political intervention.

The contradictions of geographical industrialization and the barriers to fragmentation

Notably, the dispersal of investment in blade and nacelle production remains confined to Europe. With continuous increases in equipment size, transportation costs are rising, and not only for the reason that blades and nacelles are progressively heavier and take up more space, but also because specialized vessels are required to ship them, and such vessels are becoming scarcer as the offshore wind energy industry expands globally. Thus, the drive to increase the nameplate capacity and capacity factor of turbines militates against the profitability of importing equipment from Asia. At the same time, the further spatial (and organizational) fragmentation of the production system is presently held back by the necessity for both product design and innovation in the mechanization of the manufacturing process to be undertaken at sites where there is high-volume serial production.

As argued in section ‘Capitalist competition, the production of relative surplus value, and the organizational and spatial dynamics of production’, capital’s aim with mechanization is not only to minimize the potential for human error and drive down the amount of labour-time required to produce each commodity, but also to reduce its dependence on workers’ tacit knowledge and thereby enhance its own locational capabilities. However, the process of mechanization is itself a labour process dependent on the skills of scientific-technical workers, and in the two main branches of wind turbine manufacturing, some of the major advances towards greater mechanization have required face-to-face collaboration between process engineers and design engineers from OEMs and engineers employed by firms specialized in metrology and industrial automation. Major process innovations in manufacturing and innovations in the design of wind turbines for modularization and mechanization continue to originate primarily from Denmark and Northern Germany and diffuse outwards from there, and not only because of the spatial concentration of engineers with experience in wind turbine design, but also because these are two of the territories in Europe where robotics and industrial automation are most well developed as autonomized branches of the social division of labour (Cséfalvay, 2023). While new products and manufacturing processes are eventually introduced in other territories, this is done on the basis of lessons learned from ‘zero series’ production and serial production at the leading sites. That being the case, it presently remains necessary for the OEMs to maintain and expand production capacity in the higher-wage core regions where the modern European wind energy industry first emerged.

Although not immediately evident, some of the key organizational and spatial dynamics discussed in this paper can be rather advantageous for working-class organization. At a basic level, ‘the massing of hundreds of workers in a single space’ can be the ground for economic and political organization through which workers ‘develop a strong sense of their collective power’ (Walker, 1988: 387). Indeed, such organization can be hindered by ideological divisions between different groups of workers, such as between scientific-technical workers and semi-skilled technicians. That said, if such divisions can be overcome through conscious political mediation, then the indispensability of some of these workers in developing the productive forces can be the basis for workers’ ‘structural power’ (Silver, 2003) to win more universal improvements in working conditions and conditions in the sale of labour-power to capital. At another scale, the growing concentration and centralization of capital can actually facilitate the construction of the political unity of workers across space. In the absence of transnational political mediation, workers’ support for localism predominates, and the working class has been largely unable to contest the ‘permanent transnational restructuring’ (Hürtgen, 2021: 71) of the (offshore) wind energy industry. One consequence of this has been that productive capacity in territories such as Spain has been largely ‘dismantled’, with many thousands of workers expelled from socially useful production and deprived of the potential to further develop their own capacities for the transformation of the natural world. With the growing centralization of capital, working-class organizations face the potentiality to shape the process of restructuring in such a way as to limit the fettering of the greatest productive force of all – human labour-power. Although competition between workers within multi-site firms can be just as exacting as competition between workers employed by different firms, competition within firms can actually be made much more transparent than the seemingly objective, market-mediated competition between firms, enabling working-class organizations such as trade unions and political parties to politicize decisions over investment (Gough, 1992).

Conclusion

In this article, I advanced a Marxian approach to theorizing the dynamics of industrial organization and the development of the spatial division of labour in the North Atlantic offshore wind energy industry. By focusing on the materiality of offshore wind as a natural resource and the dynamics of competition between offshore wind developers, I showed the centralization of capital to be a necessary concrete form of the development of the productive forces. Maintaining a focus on transformations in the material process of production in two of the key branches of wind turbine manufacturing, I also cast light on capital’s demand for skilled labour-power as a key determination of the spatial re-consolidation of production in a few territorial industrial complexes in Northern and Western Europe. I then turned to an analysis of the incipient dispersal of production to new regions in Central and Southern Europe, arguing that capital has been driven towards relocation through the same dynamics of competition that have forced organizational centralization. That being said, I also suggested that capital presently faces certain constraints on its ‘locational capabilities’ (Storper and Walker, 1989: 73) that may limit the increasing fragmentation of production in years to come.

The key scientific contribution of the article was to reassert the relevance of a particular sort of Marxian approach in analysing the growth of the global renewable energy industry, recovering the neglected scholarship of radical industrial geographers and synthesizing their work on geographical organization and the labour process with contemporary research on global production undertaken by Marxist scholars associated with the ‘practical criticism’ approach to the critique of political economy (e.g. Starosta et al., 2024). This was not done out of abstract theoretical interest, but because such a materialist approach has the capacity to inform conscious political intervention in the world. While the (offshore) wind energy industry remains limited in size, it will likely become one of the industries at the heart of global capitalism over the coming decades. If workers in the industry were to become more well-organized across space, then they might be able to exercise a very considerable degree of structural power, which they could leverage not only in advancing their own conditions of labour and reproduction, but those of the broader working class. This article uncovered some of the fundamental dynamics of capital accumulation out of which such structural power could be developed in the near future. Still, there remains much more work to be done in analysing the dynamics of geographical organization in other key branches of the industry, the changing composition of the collective worker, and the development of workers’ political consciousness within Europe and across the world.

Footnotes

Acknowledgements

I would like to thank Christian Stache, Christin Bernhold, Guido Starosta, James McCarthy, Max Ritts, Sarah Knuth, Brett Christophers and three anonymous reviewers for their incisive comments on previous drafts of this article. Conversations with André Novas Otero, Cassius Smith-Frazer, Clara Hertz and Debora Darabi were also very helpful in refining the arguments.

Declaration of conflicting interests

The author declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The author disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The article is based on research that was generously supported by the German Academic Exchange Service (DAAD), the Hans-Böckler-Stiftung, and the Edna Bailey Sussman Fund.

ORCID iD

William Westgard-Cruice

Notes

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