Navigant Research Blog

2016 Reshuffles the Top 10 Global Wind Turbine Manufacturers

— June 8, 2017

Navigant Research’s annual World Wind Energy Market Update ranking of the top 10 wind turbine vendors is closely observed every year. This benchmarking goes back 22 years—before other similar analyses existed and when commercial wind turbines had 50 meter rotors and a top nameplate size of around 750 kW. Today in 2017, there are rotor diameters pushing beyond 140 meters for some onshore turbines and 164 meters for offshore turbines. Nameplate capacities for onshore are mostly between 2 MW and 4 MW and 9 MW for offshore, and 10 MW capacities are just around the commercial corner.

In 2016, a total of 54.3 GW was installed globally, a 14.0% annual decrease. This annual downturn is largely the result of China dropping from 30.2 GW installed in 2015 to 23.3 GW in 2016 due to changing incentive rates in that market. The new wind capacity added in 2016 brings new cumulative wind capacity up to 486.8 GW globally, a 12.1% annual increase.

The downturn in China from an unbelievable amount of capacity installed in 2015 to a merely astonishing level installed in 2016 resulted in a shake-up of the top 10 ranking, as a few Chinese vendors dropped in capacity and rank against their peers. Merger and acquisition (M&A) activity also effected the ranking, with GE now including Alstom wind activity and Nordex including Acciona activity.

The Top 10 in 2016

The actual megawatts and market share numbers installed in 2016 are available in the full report, but the following summary describes the year 2016 annual top 10 ranking:

  • Vestas regained its longtime No. 1 status globally for annual wind installations with double-digit growth rates. It even achieved higher capacity additions in the United States over GE Energy, which has normally held a perennial lead.
  • GE Energy saw its strongest year to date and moved from 3rd place in 2015 capacity in last year’s Navigant Research World Wind Energy Market Update report to 2nd place for 2016 capacity. Its acquisition of Alstom’s wind turbine division helped, but it was largely momentum with GE Energy’s wind portfolio that drove its move upwards.
  • Goldwind fell in 2016 to 3rd place from its briefly held No. 1 position in 2015, when it rode the cresting wave of the record Chinese market.
  • Gamesa took 4th place in 2016, underlining why it was a target for M&A with Siemens’ wind division, a mega-merger that was made official in April 2017. Despite no Spanish home market, Gamesa saw continued success in a variety of global growth markets, propelling it from 8th place globally in 2014 and 5th in 2015 to 4th in 2016.
  • Enercon had a strong 2016, moving up the ranks to 5th place in 2016, thanks to a strong domestic German market, a reputable direct drive turbine portfolio, and well-diversified sales internationally.
  • Siemens again fell two positions in the 2016 top rankings to 6th place from 4th in 2015—and from 2nd in 2014, when it nearly took the top slot from Vestas. In 2016, a commanding lead in its offshore wind division could not offset lower installation rates in its onshore segment.
  • Nordex broke into the top 10 category, taking 7th place globally. This jump in 2016 was due largely to its acquisition of Acciona in 2015, which rapidly shifted Acciona’s international success to the Nordex Group.
  • The final three top 10 companies in order were all Chinese: Envision, Ming Yang, and United Power. All three saw lower installation totals in 2016 than in 2015 as the Chinese market cooled. Envision moved up the rankings within the large group of Chinese turbine OEMs.

Top 10 Wind Turbine Suppliers Market Share, World Markets: 2016

(Source: Navigant Research)

 

Wind Turbine Manufacturer Trends in the US Market in 2016

— April 28, 2017

The data for year 2016 wind installations has been published in Navigant Research’s annual World Wind Energy Market Update report. There are an endless number of observations, trends, and key data points, but this blog focuses on one area: wind turbine manufacturer market share trends in the US market.

How Did Vestas Manage to Overtake GE Energy in Its Domestic Home Market?

Of the 8.2 GW built and connected in 2016 in the United States, Denmark-based Vestas surpassed US-based GE Energy for the first time in the era of the modern wind industry. Vestas took 45% market share to GE Energy’s 41%. This is somewhat surprising given GE Energy’s long-standing domestic advantage over its foreign competitors. One reason for Vestas’ success in the United States is that it has made major investments in localizing its manufacturing and supply chain in the country. From a domestic content perspective, Vestas is now comparable to GE—if not stronger—since GE has shifted in recent years to importing gearboxes from China while Vestas sources primarily from a supplier manufacturing in the state of Georgia.

Vestas also centralized its blade and tower manufacturing and nacelle assembly in Colorado, which is in the middle of the windy central plains corridor of the United States. GE outsources blades and towers to manufacturers located throughout the central plains. However, its nacelle assembly for the United States is primarily done in Pensacola, Florida, requiring higher transportation costs to get the nacelles to the central plains states of the United States, where most wind capacity is being added. In a cutthroat competitive turbine pricing environment, the additional costs of transport can win or lose contracts.

Why Are Other European Wind Turbine Manufacturers Not Getting Higher Market Share in the United States?

The remaining market share left to other foreign manufacturers is minimal, with Siemens at 9%, Gamesa at 3.5%, and a catchall “others” category that primarily represents Nordex at 1.4%. Siemens’ market share has dropped, even though it has made significant manufacturing and supply chain commitments to the United States. Yet, there is a view among corners of the wind industry that Siemens has not made enough investments in its geared onshore turbine platform to remain competitive, leading to fewer onshore sales—especially in the United States, where there is a preference for geared turbines.

Some of the numbers bear this out. In 2016, Siemens’ 805 MW installed in the United States represented 8.9% market share. By contrast, in 2012, Siemens installed 2,628 MW in the United States and captured 23% market share—ahead of Vestas with 11% share, according to Navigant Research’s wind capacity database. This strong share was primarily from sales of the SWT2.3-108 machine. Four years later and 100% of installed capacity in the United States was from the same SWT2.3-108 unit.

For the others, such as Nordex, Senvion, and Gamesa, those companies have not had as much localized manufacturing and supply chain activity as Vestas, GE, and Siemens, which makes it more difficult to compete on cost. Gamesa initially localized its supply chain in Pennsylvania, and it should be lauded for its efforts to revitalize blue collar and unionized factory jobs in that state. However, it may not have been a strategically wise decision to locate far away from the higher growth markets of the US central plains.

For a wealth of global and country-level wind market data and analysis, see this year’s annual World Wind Energy Market Update report from Navigant Research.

 

US Wind Market Installs 8.2 GW in 2016

— February 22, 2017

The United States had a strong year for wind energy capacity installation, with 6,478 MW commissioned in 4Q 2016. This capped off a total of 8,203 MW total for the year, according to the 4Q 2016 market data recently released by the American Wind Energy Association.

In 2Q 2016, Navigant Research forecast that final 2016 capacity additions were likely to be 8,200 MW, representing its most accurate annual capacity forecast to date. Navigant Research forecasts that there will be 45 GW of total new wind installations between 2017 and 2023, assuming there are no changes to the existing Production Tax Credit (PTC) phaseout timeline.

Key Takeaways of 2016

Total cumulative wind energy capacity installed in the United States now stands at 82,183 MW, with more than 52,000 wind turbines operating in 40 states. Nineteen states commissioned a total of 47 projects during the fourth quarter. Texas led with 1,790 MW, followed by Oklahoma (1,192 MW), Kansas (615 MW), North Dakota (603 MW), and Iowa (551 MW).

Texas continues to lead the nation with 20,321 MW of installed capacity, the first state to pass 20,000 MW. This success is thanks to a combination of energy demand, strong wind resources, a relatively easy development environment, and Texas’s proactive and massive expansion of transmission capacity. In 2016, Oklahoma surpassed California to become the third-ranked state in the nation with over 6,600 MW of installed capacity, and Kansas surpassed Illinois as the fifth-ranked state with more than 4,400 MW.

The United States also commissioned its first offshore wind project during the fourth quarter, the 30 MW Block Island wind project off the coast of Rhode Island. Among other offshore developments was an auction conducted just before the end of the year and won by Norway’s oil giant Statoil with its offer to pay the US Department of the Interior $42.5 million to lease an area of ocean off Long Island, New York. The space could be used to support more than 1 GW of offshore wind, providing validation of offshore wind’s future in the United States.

Market Developments

There are now 10,432 MW under construction and 7,913 MW in advanced development in the US wind market, a combined total of 18,344 MW of wind capacity. The industry also qualified significant additional project capacity for the full value of the PTC at year-end through safe harbor and physical construction without finalizing project capacities. This means substantial wind project capacity has until the end of 2020 to be commissioned.

Out of the 8,203 MW installed in 2016, Vestas (43%) and GE Renewable Energy (42%) led in market share, followed by Siemens (10%), Gamesa (4%), and Nordex USA (1%). Goldwind, Vensys, and Vergnet each composed less than 1% share. This is the first time in history that Denmark-based Vestas surpassed US-based General Electric in a given installation year. One likely reason is Vestas’ major commitment to siting its supply chain in centrally located Colorado, providing potential cost reductions relative to General Electric (which assembles its nacelles in Pensacola, Florida, requiring further transport to the major centrally located state markets).

Project developers signed 816 MW of power purchase agreements (PPAs) during 4Q 2016, contributing to a total of 4,040 MW of PPAs signed during 2016. Utilities and rural electric cooperatives represent 56% of total project capacity contracted (2,266 MW) during 2016. For the year, non-utility purchasers had 39% of the remaining capacity contracted (1,574 MW). Of the 8,203 MW commissioned during 2016, 67% of that capacity has a PPA or Public Utility Regulatory Policies Act contract in place. The remaining capacity is under utility or direct ownership (12%), has a merchant hedge contract in place (12%), or is fully merchant (9%).

 

Wind Energy Surpasses Coal Generation in Europe

— February 15, 2017

TurbineEurope is widely considered to be the birthplace of the modern wind energy industry and its corporate and technology home base. Installation rates announced by WindEurope for 2016 show continued and stable momentum, with 12.5 GW installed across 28 EU member states (10,923 MW onshore and 1,567 MW offshore). This was 3% less than the new installations in 2015, which is less a downturn than a reflection that 2015 was a record installation year as German projects raced to get installed before wind incentives became less generous. Activity in 2016 otherwise shows stable installation rates expected for the continent.

Growing Role of Wind and Renewables

Total wind capacity in Europe now stands at 153.7 GW, and wind energy covered 10.4% of Europe’s electricity needs in 2016. Germany installed the most new wind power capacity last year with 44% of the EU total. Five member states—France, the Netherlands, Finland, Ireland, and Lithuania—had record years. France’s record was due to previously stalled wind incentives back in place for 2016 commissioning; Ireland saw a rush to connect projects before incentives are rolled back; and the Netherlands, Finland, and Lithuania all hit records with modest capacity additions outweighing previous small installation rates.

Renewables altogether accounted for 86% of new EU power plant installations in 2016, representing 21.1 GW of a 24.5 GW total. Investment in new onshore and offshore wind farms reached a record €27.5 billion (~$29.2 billion). Offshore wind investments rose 39% year over year to €18.2 billion (~$19.3 billion), while onshore investments were down 29% at €9.3 billion (~$9.9 billion).

Offshore wind represented 13% of the annual EU wind energy market installed capacity with 1,567 MW of new gross capacity connected to the grid in 2016. This is a 48.4% decrease compared with 2015, which was an exceptional year for offshore wind installation and grid connection due to delays in Germany getting resolved and 3.7 GW being installed. See Navigant’s Offshore Wind Market Update for detailed analysis of the market and supportive policies by country.

Offshore wind is a key growth area for wind in Europe, while onshore wind remains largely flat and is decreasing in some markets. This is the case in the United Kingdom, where onshore incentives were scrapped in early 2016 but retained for offshore. Similarly, incentives in Germany were reduced for onshore wind while being maintained for offshore wind.

Coal No Longer King

Also notable is that the installed wind capacity of 153.7 GW now has wind overtaking coal (152 GW) as the second largest form of power generation in Europe. In 2016, wind accounted for 51% of all new power installations in the region, and renewable energy accounted for 86% of all new EU power installations (21.1 GW of a total 24.5 GW of new power capacity). Solar had a strong showing with 6,700 MW, or 27.4% of 2016 installed capacity.

Conventional power sources such as fuel oil and coal continue to decommission more capacity than they install. Despite having decommissioned more than 2 GW this year, net gas-fired generation capacity continues to remain positive. Natural gas power plants saw 3,115 MW installed, representing 12.7% of all 2016 power generation capacity.

Since 2000, the net growth of wind power (142.6 GW), solar PV (101.2 GW), and natural gas (98.5 GW) capacity has coincided with the net reduction in fuel oil (down 37.6 GW), coal (down 37.3 GW), and nuclear (down 15.5 GW). The share of wind power in total installed power capacity has increased from 6% in 2005 to 16.7% in 2016, overtaking coal as the second largest form of power generation capacity in the EU and remaining first among renewables. Over the same period, renewables increased their share from 24% of total power capacity to 46%.

 

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