Navigant Research Blog

Shares Shift in Global Wind Turbine Market

— April 29, 2014

Market shares among the world’s top 10 wind turbine vendors shifted in 2013, as negative conditions in several key markets, particularly the United States and Spain, were not conducive to growth and affected a number of wind turbine vendors exposed in these markets.  In 2013, 19,458 wind turbines were delivered with a combined capacity of 37,478 MW, which is 13.3% lower than the previous year in terms of megawatts supplied.  The turbines were supplied by 62 wind turbine manufacturers last year; of those, 42 companies are from Asia, 18 are from Europe, and two are from North America.  China remained the largest country in terms of the number of vendors supplying wind turbines to the market, followed by India, Germany, and South Korea.

This data, along with the following 2013 market share dynamics, is detailed in the recently released World Market Update 2013 – International Wind Energy Development Forecast 2014-2018.

Major market share shifts in 2013 include the following:

  • Vestas recaptured the No. 1 position, after losing the top spot to GE Wind in 2012.  Vestas was the top supplier to Poland, Romania, and Sweden and the second-largest supplier to Germany, Canada, and the United States.
  • Goldwind ascended from No. 7 to No. 2, thanks to its strong performance both at home and in overseas markets.  The Chinese turbine supplier exported 179 wind turbines to seven countries, with 46% of these going to Australia and 25% to Latin America.
  • Enercon moved up one place to No. 3 by relying on the growth of its home market, Germany, in which it supplied nearly half of the turbines installed in 2013.   It was the third-largest supplier to Poland, Sweden, and Romania.
  • Siemens dropped one position to No. 4 in 2013 due to the slump in demand in the United States, where it traditionally performs well.  However, the company retains its position as the world’s largest offshore wind turbine supplier.
  • GE Wind suffered from the late extension of wind tax credit support in its home market, the United States, and dropped to No. 5 from the position it occupied in 2012.  However, it was the largest supplier to Brazil and the fourth-largest supplier to India in 2013.
  • Gamesa maintained the same position it held in 2012, despite installing only 55 MW in its home market of Spain last year.  It performed well elsewhere, particularly in Latin America, where it was the largest supplier to Mexico and Uruguay and the second-largest supplier to Brazil.  In addition, the company was also the largest foreign turbine supplier to India in 2013.
  • Suzlon Group dropped two positions to No. 7.  It was not a bad year for subsidiary Senvion (formerly REpower), but the contraction of Suzlon’s traditionally strong markets, India and the United States, took a toll.  Suzlon Group was the second-largest turbine supplier to the United Kingdom and Poland in 2013.
  • United Power maintained its position as the world’s No. 8 supplier, but the Chinese turbine vendor lost more than 25% market share at home in 2013.
  • Mingyang replaced Sinovel as No. 9 in 2013.  Sinovel continued to suffer in China, its home market, during 2013 and dropped to No. 13.
  • Nordex crept into last place in the top 10 supplier list in 2013, thanks to its focus on the company’s core markets in Europe and emerging markets in Latin America and Africa.  The German supplier has been out of the top 10 since 2010.

(Source: Navigant Research)



Policy Headwinds for the Wind Industry

— April 4, 2014

For the first time in 8 years, the global wind industry installed less wind capacity in an annual cycle than the year before.  A total of 36.1 GW was brought online in 2013, representing a full 20% drop from the 44.9 GW installed the year before, according to the latest figures from Navigant Research’s World Market Update – International Wind Energy Development Forecast 2014-2018.  Policy fluctuations and uncertainty are key factors for the drop and continue to frustrate those in the wind industry.  The countries where policy put the brakes on wind power development globally in 2013 or is dampening its future outlook include:

United States: The biggest dent to global wind growth came from one of the sector’s largest markets, the United States, where new installations fell 92% from a record 13.1 GW in 2012 to just under 1.1 GW in 2013.  This was the result of a dysfunctional federal government, which delayed renewing the wind industry’s key tax incentives.  Strong growth is expected this year and the next, but the broader boom and bust policy cycle is likely to continue in coming years.

Spain: For the beleaguered Spanish wind market, 2013 was the first full year in which installation data clearly reflected the downturn caused by the near total removal of incentives for wind energy.  With just 175 MW of new capacity added in 2013, Spain’s wind industry recorded its lowest growth rate in 16 years. The sector’s collapse is the result of the national government’s decision to withdraw virtually all subsidies for renewable energy projects. The latest electricity market reforms scrap production incentive payments for all new wind plants and attempt to reduce revenue for wind plants already operating.

Italy: Newly installed wind capacity in Italy was down 65% from 1,272 MW in 2012 to just 450 MW in 2013. The decline in new installations was widely expected, with Italy switching policy from a system of tradable green certificates to a structure based on competitive bidding for a capped volume of fixed-price 20-year contracts. The contract prices are significantly lower than prices for wind under the certificate program. The change in market structure set off a rush among developers to connect wind projects to the grid before January 1, 2013 and the drop-off for the full year 2013.

Canada: Wind plant construction hit a record 1,599 MW in Canada last year, but medium- and longer-term forecasts are lower due to policy changes at the provincial level.  Ontario scrapped its feed-in tariff (FIT) program of premium fixed power purchase prices for wind power after the World Trade Organization found the local content rules to be in violation of international law.

Australia: 2013 was a strong year for wind plant construction in Australia, with 655 MW connected, but the future of Australia’s wind power industry is in serious doubt following the late 2013 election that resulted in a conservative coalition government that is openly hostile to wind power.  The new government is planning a number of policy reversals in 2014 that will dilute or collapse price support for wind power generation and strengthen the fossil fuel industry.

European Union: The EU is making progress toward meeting its 2020 climate and energy target, but the view beyond has grown less positive for renewables.  The European Commission proposed a new framework for a climate and energy policy for the 2020-2030 timeframe that includes a proposed renewable energy target of 27% by 2030, lower than the previously discussed 30%.  In addition, under the proposal, the target would not be formally translated into national, binding, country-level commitments, as it is currently structured through 2020 for all EU member states.

For further details on policy headwinds, how they contributed to changing market shares of the top wind turbine OEMs globally and within country specific markets, and a range of other current topics, check out the recently released World Market Update – International Wind Energy Development Forecast 2014-2018.


High-Voltage DC Unlocks Distant Offshore Wind Sites

— February 24, 2014

Germany is on track to commission close to 1 GW of offshore wind in 2014 and will follow up with another 3 GW between 2015 and 2016.  Goals have been revised downward recently, but the government still aims to bring 6.5 GW by 2020 and 15 GW by 2030.  These ambitious installation levels are driven by strong government-backed renewables goals and supportive incentives, but also by a novel solution to the challenge that most of Germany’s ideal offshore wind sites are very far from shore – most over 75 km.  At these distances, losses are so great over typical high-voltage alternating current (AC) subsea transmission cables that they can negate the construction of a wind plant.

The solution – a first in the offshore wind market – is the construction of a network of oversized high-voltage direct current (HVDC) converter stations and connecting cables that will allow much of Germany’s pipeline of offshore wind plants to efficiently deliver power to the mainland.  Direct current (DC) is neither new nor novel.  Its use fell out of favor many decades ago as AC power was cemented as the market standard.  But growing need for electricity and the increasing distances required for some generation projects has sparked a rebirth.  These factors have also sparked fierce innovation and competition among power giants such as ABB with its HVDC Light, Siemens’ HVDC Plus, and Alstom Grid’s MaxSine, each using advanced voltage source converter (VSC) technology.  Likewise, a relatively small number of companies provide large HVDC cables for subsea use, resulting in shortages and order backlogs.  This is prompting new entrants into the market and advances in cable technology, such as crosslinked polyethylene (XLPE) HVDC cable.

Towering Turbines

Offshore wind is a leading driver of the HVDC renaissance, and the scale of the effort is impressive.  The larger units look like offshore oil rigs, topping 93 meters in height and weighing upwards of 9,300 metric tons (not including foundation).  In the first German stages, the HVDC buildout is composed of four grid clusters in the North Sea known as SylWin, HelWin, BorWin, and DolWin. These initial phases combined provide around 5.9 GW of capacity and utilize around 800 km of undersea HVDC cable.  Multiple wind farms connect to the converter clusters in order to share and reduce the overall cost to build the HVDC network.

Germany is not alone.  The United Kingdom is also making enormous progress deploying offshore wind farms and will rely on HVDC for many new wind plants.  The first wind plants under the United Kingdom’s Round 3 offshore wind development are entering construction in 2014 at distances from shore that range from 30 km to 185 km. Close to 20 GW are located beyond 100 km and will rely on HVDC.  By 2020, as much as 30 GW of offshore wind will likely be connected by HVDC globally.  Corresponding HVDC export cable route lengths are expected to reach roughly 4,000 km.

The downside to HVDC is its high cost, driven by the large converter stations.  The challenge to the offshore wind industry, the hardware providers, and grid integrators is to bring costs down by standardizing hardware and voltages and by finding efficiencies of scale in converter component manufacturing and offshore construction.

More detailed information and analysis of the HVDC technology, deployments, cable providers, transmission integrators, and the pipeline of wind plants and their developers connecting to the systems are available through the following Navigant Research reports:  International Wind Energy Development: Offshore Report 2013, High Voltage Direct Current Transmission Systems, and Submarine Electricity Transmission.


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