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Vestas Wind Systems

Website:

www.vestas.com/en
Type:

Wind Turbine Production Company

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Vestas Wind Systems is an energy company that manufactures and installs wind turbines, blades, and wind towers for onshore and offshore facilities. 1 Vestas had more than 177 gigawatts of wind-power installations as of 2023. 2 Vestas advocates in favor of government-approved acceleration of the permit process for wind energy development as well as “greenlighting more projects.” 3

Vestas has previously donated to left-of-center group Rocky Mountain Institute, 4 which opposes the use of nuclear power. 5 6

Background

Vestas claims to have over 30,000 employees working in at least 77 countries as of 2023. 7

In April 2002, Vestas Wind Systems claimed it was moving its North America headquarters from Palm Springs, CA to Portland, OR. At the time, Vestas claimed the move would add up to 1,000 new jobs and at least $150 million in local investment. 8 By 2010, the group moved its North American headquarters to Portland in 2010. The state of Oregon gave Vestas $2.5 million to incentivize the move. 9

Financials

Vestas reported a net profit of €77 million (approximately $87 million) in 2023 after a net loss of €1.57 billion (approximately $1.72 billion) in 2022. 10 Vestas reported total revenue of €15,382,000,000 (approximately $12.92 billion) and gross profits of €1,283,000,000 (approximately $1.4 billion) in 2023. 11

Advocacy

Lobbying

In 2023, Vestas claimed it was going to advocate directly with government officials and public stakeholders through informational campaigns as well as meeting with officials on issues related to wind energy. The company further claimed it would take part in indirect lobbying via trade-group associations, spending approximately €3.8 million (about $4.16 million) on membership fees to trade associations in 2023 and another roughly €2 million ($2.19 million) on “external assistance.” 7

Vestas spent $750,000 on lobbying efforts from 2021 to 2023, according to Open Secrets. 12

Support for the Rocky Mountain Institute

Vestas was listed as a donor to the Rocky Mountain Institute, giving between $100,000 to $499,999 in both 2014-2015 13 and 2015-16. 4

Controversies

Russia

A Finnish client, Fortum, pursued arbitration against Vestas in 2023 for over €200 million (over $218 million) when Vestas canceled a contract to deliver wind turbines to Russia. Vestas was contracted to deliver over 50 wind turbines to WEDF, a Russian subsidiary of Fortum. Vestas was given advance payments on the project, but the project was canceled due to sanctions against Russia in the wake of its 2022 invasion of Ukraine. 14 Vestas claimed it had invoked sanctions-specific clauses in the contracts that gave it the right to terminate the contract. 15 Following the sanctions, the company attempted to smuggle out $11 million worth of wind turbines out of Russia but the country seized the turbines first. 15

ActionAid Human Rights Report

According to a 2018 report by the Dutch office of human rights watchdog group Action Aid, the minerals used in the production of wind turbines were listed as coming from several low- and middle-income countries. Those cited included China, Brazil, Russia, India, Chile, Turkey, South Africa, Indonesia, the Philippines, the Democratic Republic of Congo, Gabon, Guinea, Malaysia, Peru, and Mexico. 16 The report claimed that several mining companies operating in these countries “are known to produce minerals required for wind turbines in a way that is highly damaging to the environment and local communities.” 16 One example cited was that half of the world’s supply of cobalt, a key mineral in wind turbine production, comes from the Democratic Republic of the Congo where local groups employ miners as young as seven years of age to work roughly 10-12 hours a day. 16

Vestas was one of four companies highlighted in the report that it claimed did not “appear to have identified nor addressed risks in their minerals supply chain in accordance with the recommendations in the OECD [Organisation for Economic Co-operation and Development] Guidelines and UN [United Nations] Guiding Principles on Business and Human Rights.” 16

The report continued by claiming Vestas does not, “appear to do its own due diligence” in regards to its supply chain. 16 According to later in the report, Vestas had confirmed, “with SOMO [a Dutch NGO by the English-language name Centre for Research on Multinational Corporations] that it has not identified any human rights impacts associated with metals and minerals in its wind turbines as a risk in its supply chain,” which ActionAid claimed in the report as being  “unlikely.” 16

Kenyan Wind Project

Vestas was listed as a shareholder in the Lake Turkana Wind Power Limited project based in Kenya. By February 2024, the site had 365 Vestas turbines. 17

The project faced controversy due to accusations that indigenous peoples’ rights were being violated by the construction project. In addition, a court case was filed not too long after regarding illegal acquisition of the land used in the project. 18 In 2016, the website DanWatch reported that Google had considered buying Vestas’ 12.5 percent share in the project for $40 million, but that activist investors were “deeply concerned” over potential human-rights violations. 18

In February 2024, Vestas sold its shares in the project to the Climate Finance Partnership, which is managed by BlackRock. 17

Technical Problems

In June 2022, a Vestas-built wind turbine built on the Alinta wind farm in Geraldton, Australia collapsed, causing the farm to shut down all 54 other wind turbines as a result. 19 Iberdrola Australia CEO and Managing Director Ross Rolfe called the turbine collapse “a serious event.” 19

In October 2022, a Vestas wind turbine built on the Diamond Trail Wind Farm in Iowa County, Iowa caught fire, spreading to other turbines and resulted in the others being shut down to be inspected. The fire spread to the field below the turbine and several other turbines had to be taken offline and inspected. 20

In October 2023, a Vestas wind turbine caught fire at the Arbor Hill Wind Farm in Adair County, Iowa; destroying one of the turbine’s blades and spreading debris to nearby crop fields. The fire destroyed one of the turbine’s blades and burning debris fell into nearby crop fields. 21

Health Violations

In 2010, Vestas Towers America Inc. was fined $1,500 for safety violations in its Windsor, Colorado, turbine-blades facility by the U.S. Department of Labor’s Occupational Safety and Health Administration. Alleged violations included not identifying respiratory hazards in the workplace, not inspecting respirators properly, and not effectively informing and training employees about hazardous chemicals in their workplace. 22

In 2011, Vestas Towers America Inc. was fined $164,000 by OSHA for “willful” and “serious” health and safety violations in its Pueblo, Colorado, turbine-tower facility. The violations ranged from allegations of failing to properly train employees to injuries that resulted in amputations. 22

OSHA cited Vestas Towers America in Pueblo, Colorado, with one willful and 23 serous serious safety and health violations, leading to an inspection of the facility. The inspection took place following a worker suffering a serious injury including the partial amputation of an employee’s two fingers in November 2010. OSHA claimed that Vestas Towers America Inc. deliberately removed support equipment while welding sections of wind towers togethers. OSHA also accused the company for improper machine guarding, damaged electrical equipment, improper forklift operations, no guardrails, not having personal protection equipment, and failing to train employees on how to handle hazardous chemicals. 22

Embezzlement by Plant Finance Director

Denna Randall-Martinez was the former finance director of the Vestas American Wind Technology wind turbine plant in Windsor, Colorado, and pled guilty to embezzling $1.4 million from the company. The plea deal called for Martinez to repay the $1.4 million. Vestas alleged that Martinez stole from the company from August 2007 until she was fired in December 2010. Martinez was accused of using a company credit card to buy personal items among other offenses. 23 She was sentenced to eight years in prison in 2011. 24

References

  1. Global Data. Vestas Wind System As: Overview. Accessed March 10, 2024. https://www.globaldata.com/company-profile/vestas-wind-systems-as/#:~:text=Vestas%20Wind%20Systems%20AS%20(Vestas,wind%20turbines%2C%20blades%20and%20towers.
  2. Vestas. Annual Report. 2023. Accessed March 10, 2024. https://mb.cision.com/Main/18886/3923785/2587209.pdf
  3. Vestas. Bureaucrats Must Accelerate Permitting To Save The World. Accessed March 10, 2024. https://www.vestas.com/en/about/Our-policy-recommendations/permitting
  4. Rocky Mountain Institute. 2015-16 Annual Report. Accessed April 1, 2024. https://rmi.org/wp-content/uploads/2017/04/RMI_Annual_Report_2015-2016-4.pdf
  5. Rocky Mountain Institute. Research And Analysis. Amory Lovins. Accessed April 1, 2024. https://rmi.org/insight/origins-of-the-nuclear-power-fiasco/
  6. Rocky Mountain Institute. Staff. Amory Lovins. Accessed April 1, 2024. https://rmi.org/people/amory-lovins/
  7.  Vestas. Sustainability Report. 2023. Accessed March 7, 2024. https://www.vestas.com/content/dam/vestas-com/global/en/investor/reports-and-presentations/financial/2023/2023-annual-report/Sustainability%20Report%202023.pdf.coredownload.inline.pdf
  8. Gillian Flaccus. “Wind Turbine Maker Will Shift Production To Portland”; The Olympian. April 4, 2002. Accessed March 6, 2024.
  9. Portland Tribune. “Vestas May Leave Portland”; Portland Tribune. May 12, 2014. Accessed March 6, 2024. https://www.portlandtribune.com/news/vestas-may-leave-portland/article_bfd6e65f-7e3b-51f0-9323-13c902c38833.html
  10. Agence France Presse. “Danish Wind Energy Giant Vestas Swings To Profit”; Barron’s. Feb. 7, 2024. Accessed March 10, 2024. https://www.barrons.com/news/vestas-swings-to-2023-profit-on-record-orders-8cc8f188
  11. Vestas. Annual Report. 2023. Accessed March 7, 2024. https://www.vestas.com/content/dam/vestas-com/global/en/investor/reports-and-presentations/financial/2023/2023-annual-report/Annual%20Report%202023.pdf.coredownload.inline.pdf
  12. Open Secrets. Client Profile: Vestas Wind Systems. Accessed March 10, 2024. https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2021&id=D000073634
  13. Rocky Mountain Institute. 2014-15 Annual Report. Accessed April 1, 2024. https://rmi.org/wp-content/uploads/2017/04/RMI_AnnualReport_2014-2015.pdf
  14. Louise Rasmussen. Jacob Gronholt-pedersen. “Fortum Chases $218 Million From Vestas Over Russia Wind Project”; Reuters. April 12, 2023. Accessed March 10, 2024. https://www.reuters.com/world/europe/vestas-says-fortum-seeks-compensation-over-russia-wind-farms-2023-04-12/
  15. Andrew Lee. “Vestas Turbine Blades Seized As Wind Giant Tries To Keep Them Out Of Russian Hands”; Recharge. Aug. 9, 2023. Accessed March 10, 2024. https://www.rechargenews.com/wind/vestas-turbine-blades-seized-as-wind-giant-tries-to-keep-them-out-of-russian-hands/2-1-1498509
  16. ActionAid. Human Rights In Wind Turbine Supply Chains. January 2018. Accessed March 7, 2024. https://www.somo.nl/wp-content/uploads/2018/01/Final-ActionAid_Report-Human-Rights-in-Wind-Turbine-Supply-Chains.pdf
  17. Vestas. Vestas Divests Its Shares In Lake Turkana Wind Project. Feb. 19, 2024. Accessed March 8, 2024. https://www.vestas.com/en/media/company-news/2024/vestas-divests-its-shares-in-lake-turkana-wind-power-li-c3931244
  18. Louise Voller. “Google Investors ‘Deeply Concerned’ Over Human Rights Violations In Kenyan Wind Project”; DanWatch. Oct. 3, 2016. Accessed March 8, 2024. https://danwatch.dk/en/google-investors-deeply-concerned-over-human-rights-violations-in-kenyan-wind-project/
  19. Jessica Moroney. “Alinta Wind Farm In Walkaway Remains Shut Down Amid Turbine Collapse Investigation”; Midwest Times. June 21, 2022. Accessed March 10, 2024. https://www.midwesttimes.com.au/news/midwest-times/alinta-wind-farm-in-walkaway-remains-shut-down-amid-turbine-collapse-investigation-c-7231026
  20. Hannah Holt. “Vestas Onshore Turbine ‘Engulfed In Flames’ In US”; Windpower Monthly. Oct. 26, 2022. Accessed May 3, 2024. https://www.windpowermonthly.com/article/1803241/vestas-onshore-turbine-engulfed-flames-us
  21. Natasha Keicher. “Wind Turbine Engulfed In Flames At Wind Farm In Adair County”; WHO-TV. Oct. 17, 2023. Accessed April 3, 2024. https://who13.com/news/wind-turbine-engulfed-in-flames-at-wind-farm-in-adair-county/
  22. David Young. “Vestas Fined For Health Violations”; Fort Collins Coloradoan. May 18, 2011. Accessed March 6, 2024.
  23. Associated Press Staff. “Ex-Vestas Finance Director Pleads Guilty To Threat”; Fort Collins Coloradoan. Accessed March 10, 2024.
  24. Greeley Tribune Staff. “Ex-Vestas CFO Sentenced To 8 Years”; Greeley Tribune. Oct. 5, 2011. Accessed March 10, 2024. https://www.greeleytribune.com/2011/10/05/ex-vestas-cfo-sentenced-to-8-years/
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