Navigant Research Blog

Making More with Less: Maximizing Generation in Lower Wind Resources Regions

— September 26, 2017

Wind turbine manufacturers are constantly evolving their turbines to maximize power output in areas of lower wind speeds, which opens much more geography for wind projects. A simple metric for quantifying wind resource areas for turbines is specific rating (or specific power). Specific power is the ratio of a turbine’s rated power output in watts to its swept area in square meters. A turbine with a higher specific power is designed for areas with high wind resources and vice versa. Higher specific power indicates that a turbine can generate more power with less swept area (i.e., a smaller rotor diameter). These turbines need high winds to adequately perform. Otherwise, capacity factors and associated power output are too low to make the turbine cost-effective. If the average winds are not sufficient for high specific power turbines, a turbine with a lower specific rating will be used. For developers and owners looking to find the right turbine for their location, it’s all about finding the right balance based on wind resources. For example, a 2 MW turbine with a 90-meter rotor might produce 6 GWh with an average annual wind speed of 7 m/s. A 120-meter rotor turbine with the same rating would produce 8.5 GWh in the same conditions. The 120-meter rotor turbine will be more expensive to manufacture, transport, and install, so the higher power output comes at a price—but the tradeoff can be worth it.

Changing of the Times

There are four different classes of wind turbines based on average annual wind speed, among other parameters: I, II, III, and IV. Two decades ago when wind energy costs were high, typically only wind farms in high wind resources regions with Class I turbines made economic sense. As wind costs continue dropping, wind turbine OEMs are prioritizing Class II and Class III turbines. According to the US Department of Energy’s 2016 Wind Technologies Market Report, the average wind class for turbines in the United States shifted from 1.2 in 2000 to 2.7 in 2016. As noted in the figure below, the average specific power of installed turbines in the United States has plummeted in the last 20 years, dropping from almost 400 W/m2 to 230 W/m2. Typically, a Class I turbine has a specific power of 400 W/m2 or higher. Class II turbines will be between 300 W/m2 and 400 W/m2 and Class III between 200 W/m2 and 300 W/m2. Class III turbines are the popular choice around the globe and have been for several years now.

Average Specific Power, United States: 1998-2016

(Source: Office of Energy Efficiency and Renewable Energy)

Navigant Research’s Wind Turbine Order Tracker follows the average specific power for turbines to be used in upcoming projects. Major turbine OEMs like Vestas and Siemens (now Siemens Gamesa Renewable Energy, or SGRE) have seen dropping specific powers. The average specific power for Vestas turbines dropped from 297.3 W/m2 in 1H 2016 to 250.9 W/m2 in 1H 2017. In the latest version of the Tracker to be published next month, Vestas, SGRE, Nordex, Senvion, and GE have specific ratings between 240 W/m2 and 270 W/m2. Class III turbines account for over 90% of the turbine capacity awarded between January and June 2017, and less than 2% went to Class I turbines. Clearly, the times have changed in the wind industry and low wind resources are no longer a deal breaker for potential wind sites. As costs continue to drop and technology improves, project developers and owners will continue to gain what they didn’t have much of 20 years ago: options.

 

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 Blade Strategy: Building In-House or Out?

— January 26, 2017

Wind and SolarThe continuing cascade of merger and acquisition (M&A) activity in the wind sector has primarily centered on a few high profile wind turbine OEMs, but it has also been accompanied by a few blade manufacturer acquisitions. Wind turbine OEMs are continually revaluating whether to build blades in-house, outsource them, or juggle a careful blend of the two sourcing strategies. There has been a trend over the past few years toward more outsourcing arrangements. However, two recent acquisitions of independent blade manufacturers are raising the question of whether the trend toward more outsourcing is slowing.

The largest of the deals was in October, when US industrial conglomerate GE inked a $1.65 billion contract to acquire LM Wind Power, the world’s largest independent wind blade manufacturer. LM’s annual blade manufacturing capacity is estimated by Navigant at around 6,300 MW. A much smaller deal announced in November saw German turbine OEM Senvion acquiring European blade design and manufacturing company Euros for an undisclosed cash sum.

Reversing Course?

So is the era of blade outsourcing reversing? In short, no. Instead, it is a continued validation of the “make and buy” sourcing that balances both in-house manufacturing with outsourcing. Over the past few years, wind turbine companies have increasingly gone down this path because it brings the advantages of both sourcing options instead of being wedded to the limitations of one. Having in-house capacity guarantees supply and ensures that increasingly sophisticated blades are designed and manufactured strictly to the wind turbine OEM’s needs. Outsourcing can give turbine vendors more flexibility in using globally located independent manufacturers while avoiding the need to build new factories to serve all global markets.

GE bringing blade production in-house does not refute or reverse the trend toward outsourcing. Rather, it rebalances GE’s previous 100% outsourcing to an OEM that can make and buy. It still plans to source from the independent vendors—although inevitably at lower rates now that it can satisfy in-house needs from LM under its ownership. Senvion already chose a route of make & buy, and the Euros acquisition just brings more expertise in-house at a time when sophisticated large blade rotors are so important to turbine design.

Furthermore, there has been well-reasoned speculation that GE’s LM acquisition may have been a preemptive defensive move to prevent Siemens—which has been on its own M&A spree —from acquiring LM. Siemens has and still produces all blades 100% in-house, but the company’s acquisition of Gamesa, which makes and buys, may have ignited a new interest in acquiring more blade production capabilities and options. Having more options and controlling interests in more companies would provide more solutions to the complicated blade sourcing strategy of the larger merged company as Siemens/Gamesa turbine designs and technologies are increasingly harmonized.

A Significant Market

Blades are costly and increasingly strategically important parts of the wind turbine supply chain. Blade costs are typically around 22%-24% of the overall cost of the wind turbine, or between $90,000 to $140,000 per blade, depending on size, materials, and other particulars, according Navigant’s recent Wind Turbine Blade Technology & Supply Chain Assessment report. The global wind blade market is significant, with between $6.6 billion and $7.7 billion in revenue expected annually from 2016 to 2025.

Going forward, there likely will still be some shake-ups among turbine OEMs and blade and other subcomponent suppliers, and some strategic moves may be made to in-source previous outsourcing. In general, however, wind turbine OEMs are expected to continue on a trajectory of blending in-house production with cost-effective flexible outsourcing.

 

Evaluating New Frontiers in Wind Energy: Saying Goodbye to Blades, Part 2

— January 13, 2017

Tablet Device with StatisticsThis blog is the second part in a continuing series examining new and innovative technologies in the wind energy industry.

The first blog in this series discussed the Vortex Bladeless wind turbine. The Spanish company behind the Vortex has been successful in securing funding, but it has yet to move out of the R&D phase and still has a long road ahead before actual orders are placed. In addition to the oscillating tower design, wind turbine engineers have explored other concepts that can generate electricity from wind. One particular company, Saphon Energy out of Tunisia, has come up with a design inspired from ancient sailboats and movements of fish and birds. The turbine is unique, and the small startup has big aspirations for how its machine could revolutionize the industry.

The Saphonian does not work in the same manner as a typical wind turbine—in fact, the company does not define it as a wind turbine at all. The system works with a disk that moves around in a figure eight motion driven by the wind. While specific details of the exact process for how exactly the unit uses this mechanical motion to generate electrical energy have not been disclosed by the company, it is believed that the machine uses a system of hydraulic cylinders and fluids to essentially run a hydraulic pump backwards in order to extract energy from wind.

Saphon Energy’s Saphonian

Saphon Energy

(Source: Saphon Energy)

Excitement and Skepticism

Saphon Energy has made several claims with its machine which, if true, would make it a very desirable option for developers interested in distributed wind. So the question is, if these claims are true, why hasn’t the Saphonian made bigger noise in the wind energy industry? Saphon says its wind system can generate twice as much energy as a conventional wind turbine with the same swept area while also boasting an efficiency of 70%. Because the Saphonian is not classified as a turbine, it is not subject to the Betz Limit, which says that a turbine can convert no more than 59% of the kinetic wind energy into electrical energy. These claims need to be shown in real-world applications before they can be taken seriously. Additionally, the figure eight motion would likely cause significant stress on the rotor system and quickly lead to material fatigue. The only explanation currently offered by the company is a vague state-of-the-art design statement that does not disclose how the machine counters mechanical stress. As of now, the system is only designed for power outputs of 20 kW to 50 kW. Developing a machine that is scalable up to commercial-scale size of 3 MW or more while maintaining a competitive cost will prove to be a significant challenge.

While skepticism for the Saphonian should be expected, there’s still reason for optimism for the young company to eventually break into the market. Microsoft signed an alliance with the Saphon Energy in 2014 as part of its 4Afrika initiative. The company has also been the recipient of several awards, including the 2015 Gulfstream Navigator Award. The company also has reportedly signed an agreement to make a 1 MW test site in India, where it will install 50 of its 20 kW machines by 2018. An agreement to actually install the machines is a major first step for a small wind startup like Saphon, and while news has been relatively quiet for the company in recent months, there’s reason to believe the company has the opportunity to make a dent in the global wind market. Though a substantial uphill climb remains, this innovative startup is worth committing to memory for the time being.

 

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