Navigant Research Blog

Wind Turbine Manufacturers Shuffle Market Share in a Record 2014

— May 20, 2015

Each spring, Navigant’s annual tally of previous-year wind turbine installation market shares are a closely watched barometer of how all the major wind turbine vendors are progressing in the global marketplace. This analysis is a key part of the 20th annual World Wind Energy Market Update 2015, produced by BTM Consult, a part of Navigant.

Last year was a high water mark for the industry overall, with 25,474 wind turbines installed, representing a record of 51,230 MW. Cumulative installed capacity climbed to 372 GW by the end of the year. China again held the title of the world’s largest annual market with 23.3 GW of new wind power installed in 2014, and Germany remained a distant second with 5.1 GW, followed by the United States with 4.9 GW.

The revival of the U.S. and German markets caused a significant shake-up in the rankings of the world’s top 10 wind turbine suppliers in 2014:

  • Vestas remained the No. 1 supplier after strong sales both onshore and offshore.
  • Siemens jumped two positions to second in 2014 due to strong sales in the offshore sector and the good shape of the German market. Interestingly, had more planned 2014 offshore wind been fully commissioned and grid-connected, Siemens would have challenged Vestas’ position for the first time in wind power history.
  • GE Energy recovered after a renewal of wind tax credit support in its home market in the United States and rose from a ranking of fifth to third in a technical draw with Goldwind. Only 31 MW separate the companies in 2014.
  • Goldwind dropped from No. 2 to No. 4 despite its strong performance at home. Its small footprint outside China means it did not benefit from the good year in Germany, Brazil, and the United States.
  • Enercon moved down two places to No. 5, as it relies largely on the growth of its home market Germany, in which it supplied nearly 40% of the turbines installed in 2014.
  • Suzlon Group rose one position to No. 6, supported by its then subsidiary Senvion (its divestment has just been finalized) and its operations in India. Navigant Research expects that with the division of the group, both Senvion and the remaining part of Suzlon will drop from the top 10 rankings in 2015.
  • United Power moved up one position as the world’s No. 7 supplier on the rush to install capacity in China in 2014.
  • Gamesa had a strong performance in the Americas and India, which allowed it to remain as one of the top 10 suppliers globally, coming in eighth place for 2014 installations, down from sixth in 2013.
  • Ming Yang remained in ninth position in 2014, pulled by the growth of its home market, China.
  • Envision crept into last place in the top 10 supplier list in 2014 thanks to the spectacular growth in its home market, becoming the fourth Chinese manufacturer in the top 10 chart. In 2013, Envision was No. 11.
  • Nordex had a record year, installing nearly 1.5 GW, up from over 1.2 GW in 2013, when it made it into the last spot in the top 10 group. However, it slipped out of the top 10 ranking based on the huge volume of wind plants installed by the other major vendors, particularly those in China. The next five in line after the top 10, in addition to Nordex, are all Chinese: XEMC, Sewind (Shanghai Electric), Dongfang, and CSIC. Acciona and Alstom are ranked a distant 23rd and 24th.

For more information, see World Wind Energy Market Update 2015.

 

Offshore Wind Farm a Milestone for New England Energy

— May 18, 2015

At an industrial facility in Rhode Island, work has finally begun on what will likely be America’s first offshore wind farm. Originally proposed in 2008, Providence-based company Deepwater Wind’s project has overcome significant headwinds to receive permits, sign power purchase agreements, and finally begin construction. Made up of only five turbines, work on the relatively small project comes at a time when New England’s energy future faces uncertainty. The region generates almost no energy locally, being dependent primarily on natural gas and coal imports from other parts of the country. As a result, consumers are susceptible to volatile rates due to severe weather and supply constraints. A proposal to expand natural gas pipelines represents one way forward for the region, while the wind farm on Block Island represents a very different path.

As a former resident of Block Island, I have been intently following the progress of this project since its initial announcement. While working on the ferry to the mainland, I spent many hours on a nearly empty ship hauling truckloads of diesel fuel to be burned at the island’s one power plant. It comes as no surprise that island residents have to pay some of the highest electricity rates in the country, around $0.50 per kWh. These rates are significantly higher than even Hawaii, where expensive electricity has set off a rush of solar PV and other local energy generation.

Looking Ahead

The wind farm is a crucial component of Block Island’s energy future. Deepwater Wind claims that once operational, the farm could reduce island electricity rates by nearly 40%. Many island communities around the world have recently initiated ambitious plans to wean themselves off imported fuels completely by integrating locally generated energy. Local energy storage has been an important aspect of many islands’ plans to reduce dependence on imported energy, as discussed in a recent post by my colleague Anissa Dehamna. A great example of this can be found on Kodiak Island in Alaska. Global power electronics provider ABB worked with the local electric cooperative to install both battery and flywheel-based energy storage systems to help stabilize the output from the island’s wind turbines, and to store excess power generated at night to be used at times of high demand. The addition of energy storage on Kodiak Island has enabled up to 100% penetration for renewable energy and greatly reduced diesel consumption.

The development of the wind farm on Block Island will present great opportunities to demonstrate the value that other clean energy technologies can provide. The island is an interesting case due to the dramatically smaller population outside of the summer months. There are only around 1,000 year-round residents on the island, meaning demand for electricity most of the year is only a fraction of summer demand. For most of the year, the 30 MW output from the wind farm will be far more than is needed to power the island. By integrating local energy storage, the island could easily be a net exporter of energy through the soon-to-be-built transmission line connecting the mainland while only ever using locally produced clean energy. This can provide substantial benefits to residents through lower electricity rates and a much cleaner, more reliable power system.

 

New Jersey Takes Slow, Steady Approach to Offshore Wind

— May 11, 2012

Europe has been operating huge wind turbines offshore for more than a decade, while here in the U.S., this cutting edge clean technology seems perennially “five years off.”

The infamous project proposed offshore of Cape Cod, Massachusetts has been under deliberation for more than 10 years. During that time, Denmark, Germany, the United Kingdom, and seven other countries have already installed 53 offshore wind farms totaling 3,813 megawatts (MW) of carbon free electricity. That is enough power to keep the lights on for more than 2.8 million American homes, or a city larger than the size of Chicago.

The international wind power industry is watching Washington, DC to see if lawmakers will extend the federal production tax credit (PTC) for wind power. But their eyes are also focused on Trenton, the state capital of New Jersey, to see if state regulators there will help launch America’s long-awaited offshore wind energy industry.

In August of 2010, New Jersey Governor Chris Christie signed into law the Offshore Wind Economic Development Act, which authorizes up $100 million in ratepayer-funded subsidies for offshore wind developments in the Atlantic Ocean that connect to the New Jersey grid.  Special “offshore renewable energy credits” (ORECs) help make projects more economic, but unlike the Solyndra federal government loan guarantees, these subsidies are only awarded after projects meet a cost/benefit criteria and produce renewable energy delivered state consumers. In addition, a “Clean Energy Manufacturing Fund” offers additional grants and loans based on local job creation.  Many experts consider New Jersey’s offshore wind program to be the most well conceived state policy initiative in the nation.

Perhaps the most unusual company pursuing the Garden State’s offshore wind power opportunity is Fishermen’s Energy, based in Cape May, New Jersey.  Several of the East Coast’s largest commercial fishing companies have partnered to create the company, which has been developing a 25 MW project for several years. In contrast to Cape Wind and other ambitious proposals, the New Jersey-based consortium chose a step-by-step approach: a demonstration project. It is siting its five turbine windfarm within the three-mile state-controlled boundary off Atlantic City, a city looking to extend its image – and economy – beyond casino gambling.  If building America’s first offshore windfarm were a race, Fishermen’s Energy might look like the tortoise to Cape Wind’s hare.

Showcasing a savvy approach, Fishermen’s Energy has trimmed pre-development costs and shortened the development cycle to what may be less than half that of the Cape Wind project by doing the following:

  • Sited its first project in state waters, thereby eliminating redundancy in permits/paperwork and limiting federal agency reviews to the Army Corps of Engineers
  • Relied upon shore-based anemometers, radar, and new laser-based technologies to collect data, eliminating the need for site-based meteorological towers in the ocean
  • Engaged environmentalists and recreational fishermen in dialogue about the merits of its pilot project in advance of large-scale developments off the New Jersey coastline
  • Discovered data on avian and sea life studies performed by a credible third-party company – Geo-Marine – that covers almost 127 miles of coastline (including its project site), to help secure its permits from the Department of Environmental Protection
  • Used one of its company’s vessels – an 85-foot former fishing boat – to install a buoy at the installation site to monitor whale activity for two years
  • Recruited financial support from XEMC, a Chinese industrial giant known as “China’s GE,” in planning for a 5MWdirect drive wind turbine

All these innovative steps – and more – add up to project savings, a critical accomplishment in light of the tight fiscal constraints imposed by the state OREC program.

The New Jersey Board of Public Utilities (BPU) is currently reviewing the company’s proposed pilot project.  By modestly committing consumer dollars to the pilot project, New Jersey would lock in its leadership of an entirely new industry: offshore wind power.  If the Fishermen Energy’s pilot project is allowed to move forward, more than 500 MW of additional offshore wind capacity could come online to serve New Jersey within the next five years, creating as many as 11,000 manufacturing, installation and ongoing operation and maintenance jobs for the Garden State.

 

Renewables in U.K. at a Turning Point

— April 18, 2012

The United Kingdom seems to always be trailing the European renewable energy starting line-up of Germany, Denmark, Spain, Sweden, and any one of Holland/Finland/Portugal.

As we’ve observed in our offshore wind, small wind, and marine and hydrokinetics reports, though, the U.K. has taken enormous strides to stimulate its renewable energy industries and is taking on some of the most difficult technological challenges in cleantech today.  (See this map to locate offshore wind and marine energy activity.)  Below are a few of the highlights:

  • The U.K. has a current target of 15% target for renewables across electricity, heat and transportation sectors and has enacted almost 50 policies and programs to achieve that goal
  • The U.K. has been at the forefront of offshore wind since 2000 and is one of the world’s leaders in terms of current installations, nearing 2 gigawatts (GW), and a potential pipeline of more than 40 GW
  • The U.K. is the clear leader in incubating marine energy companies with leases approved for 1.6 GW of wave and tidal projects; with Scotland aiming for 2 GW installed by 2020
  • The UK is home to one of the largest markets for small wind turbines, in large part thanks to a generous feed-in tariff scheme passed in April 2010 and great wind resources

Current events, including the recent announcement by German utilities RWE and E.ON that they are scrapping their plans to build two nuclear reactors in the U.K., plus The Economist’s apparent obituary on new nuclear plants in Europe (and the United States), seem to underscore the trend in favor of renewables.

At the same time, however, U.K. members of Parliament are increasingly scrutinizing the country’s renewable energy incentives, and there are even hints that the U.K. is moving closer to a “low carbon” strategy, opening the door to a wider role for nuclear which currently provides approximately 20% of the U.K. electricity mix.

No doubt the financial crisis has changed the equation for many U.K. political leaders, and each country will choose its own carbon reduction path – but members of Parliament must keep in mind that there are trade-offs.  The most critical trade-offs include the possibility that tying up precious capital on nuclear could reduce investment in smart-grid/transmission infrastructure required to realize the ambitious offshore targets and to enable distributed generation to succeed at scale.   Opting out of new nuclear, of course, is the path that Spain, Sweden, Denmark and Germany decided to take, instead doubling down on renewables (Germany’s reduction in solar feed-in tariff rates notwithstanding).  That’s why they’re in the starting line-up.

 

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