EUROPEAN climate policy has spent vast amounts of public money, sent power utilities to the brink and done little to reduce emissions of carbon dioxide, an impressive display of multi-pronged incompetence. But might all that money at least have built a robust, world-beating European renewables industry?

Not yet. European makers of solar panels have been largely wiped out by a combination of the financial crisis and competition from cheaper Chinese rivals. Q-Cells of Germany, once the world’s largest solar manufacturer, went bust in 2012. SolarWorld, Germany’s largest remaining maker, begged successfully for investors’ patience to avoid bankruptcy late last year. The EU, like America, is bringing anti-dumping complaints against Chinese firms, but even if these were to succeed it is clear that the future of solar-panel manufacturing lies beyond Europe.

Besides barely-green biomass, geographically limited hydropower and unproven tidal power, that leaves wind turbines as the best hope for European green energy. The picture is brighter than for solar. But Prokon, a German wind-park developer that offered generous profit-shares to small investors, filed for bankruptcy in January. And Europe’s makers of wind turbines have gone through a dark few years, shedding jobs and racking up losses.

Vestas, of Denmark, was once the pin-up of the wind-turbine industry. But it overinvested just as others piled into the market. As its balance-sheet deteriorated, investors took fright, forcing the management to announce huge cost-cuts and lay-offs, culminating in the sacking last year of Ditlev Engel, its boss. His successor, Anders Runevad, announced last month that the restructuring was paying off, producing €211m ($288m) in operating profit before special charges.

Kristian Tornoe Johansen, an analyst at Danske Bank, thinks that Vestas’s new “asset-light” model, with many of its production processes outsourced, puts it in a strong position to compete in Europe, America and emerging markets. HSBC’s wind-sector analysts are also bullish on Vestas, as they are on two European competitors, Nordex of Germany and Gamesa of Spain, saying that the industry is ready for a turnaround, as it were.

Perhaps it is appropriate that Mr Runevad came from Ericsson, a Swedish telecoms-equipment maker. Tom Brookes of the European Climate Foundation compares the renewables firms’ boom and bust to Nokia and Ericsson, which lost their early lead in mobile telephony when Apple and Google entered the market and became “killers”. The two killers the wind-turbine makers should fear are not the Chinese but GE and Siemens, two huge Western conglomerates. GE has overtaken Vestas to become the world’s biggest wind-turbine maker. Siemens outsells Vestas in the small but growing market for offshore windpower installations. Both conglomerates boast that they can offer their customers a complete package of transmission, storage and other capacities, in contrast to Vestas’s focus on generation only.

Free as the wind

In some countries, such as Brazil, windpower is already competitive without subsidies, and as the technology continues to develop there will be more such markets. But in Europe that point is still far off: Siemens is aiming to cut the cost of electricity from offshore turbines to ten euro cents a kilowatt-hour by 2020, from around 14 cents now, but this is still well above the current cost of fossil-fuel generation.

So Europe’s specialist renewables firms are pleading for help. A group of the firms’ bosses, including Mr Runevad, has gone to Brussels to call on the EU to impose a further round of binding renewable-energy targets on each member, for the decade to 2030. The EU’s initial proposals for energy policy during this period, announced in January, did not include these.

Mr Runevad and his fellow windpower bosses argue that compulsory targets would encourage power utilities to buy lots of wind turbines, helping their makers achieve economies of scale. Maybe, but there is a more sensible way for Europe to accelerate the switch to renewable energy and boost its wind-turbine makers. It should reform its crippled market in emissions permits, in particular by scrapping the exemptions from having to buy permits that many polluting industries enjoy. If the turbine-makers were to lobby for this, rather than pleading for a guaranteed market share, it would be a sign of an industry confident of its future.