The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Wind Power Supply Chain in Trouble as Turbine Market Contracts

Global demand for wind turbines is expected to drop by as much as 5 percent this year for the first time since 2004, new analysis has found.

According to a new report from analysis firm MAKE Consulting, the predicted market contraction is due to a “perfect storm” of contributing factors leading to pressure on the wind power supply chain. Increasing competition has resulted in lower profit margins, while declining demand in key markets has forced companies to make capacity adjustments. At the same time, greater investment is required in order to enter emerging markets with local content requirements and to keep up with the industry’s growing demand for larger wind turbines.

Declining demand in key markets can be largely attributed to policy changes and ongoing policy uncertainty, the report found. In the most hard-hit markets – Spain and the U.S. – there have been significant layoffs and facility closures over the past year. In Spain, where the government has suspended all renewable energy subsidies, capped profits and increased taxes, the market contraction is so severe that suppliers must rely heavily on export orders to remain viable, the report said.

MAKE’s analysis of capacity adjustments by Spanish OEMs shows them pulling back in order to concentrate production at Spanish facilities, with a focus on exporting components to North and South America and emerging EMEA markets. And several OEMs have announced that they are even reducing their manufacturing capacity in Spain. The Spanish wind market’s future now looks bleak according to MAKE, which doesn’t predict a recovery until 2017, and a slow one then.

In the U.S., the supply chain has been stressed by slack power demand, the shale gas boom and an ongoing boom-and-bust cycle resulting from continual policy uncertainty. Doubt about the last-minute extension of the Production Tax Credit (PTC) and Investment Tax Credit (ITC) caused a drop in demand in 2013, as developers were unwilling to place new equipment orders without policy certainty. Low order intake since the first half of 2012 has reduced profits throughout the supply chain, resulting in production capacity adjustments across the industry, the report found.

As companies increasingly look away from traditional wind markets for growth opportunities, local content requirements in emerging markets are causing new problems, MAKE said. Manufacturers, many in tight financial situations, are having to carefully weigh the benefits of investing in new production facilities in order to enter these markets.

While the immediate future looks challenging, MAKE’s analysis views the current downturn as a window of opportunity for innovation and the rise of new business models. Traditional OEM procurement strategy uses multiple suppliers, creating competition that controls costs and forces innovation, but during periods of weak demand this model doesn’t work well for second- and third-tier component manufacturers. As vertically integrated wind turbine OEMs consider divesting their in-house supply chain activities, there is an increasing trend toward hybrid sourcing strategies and partnerships, and suppliers are diversifying in order to reduce dependence on new wind turbine demand, the report said.

There is even cautious optimism about opportunities in historical key markets. About the U.S., MAKE partner Dan Shreve told REW that its continuing tepid growth "provides significant challenges to turbine OEMs, but also opportunity for strong differentiation among technology leaders able to reduce their turbine's portfolio's levelised cost of energy."

Lead image:Wind turbine blade via Shutterstock

Read more wind energy news here.


Untitled Document


Global Renewable Energy Roundup: China, Kenya, Turkey, India Seeking More Renewables

Bloomberg News Editors China is being encouraged by three industry groups to double the nation’s solar-power goal for 2020 to make up for sh...

With Vast Amounts of Geothermal, Wind and Hydropower, Why No Solar In New Zealand?

James Ellsmoor, Contributor New Zealand has built an international brand on environmentalism and the great outdoors. So it is unsurprising that t...

GE low wind turbines make debut in France

Kelvin Ross

A new wind farm in France will be the first in the country to deploy GE’s 2.75-120 wind turbines.

Unlikely Allies in North Carolina Clean-Energy Fight

Mark Drajem, Bloomberg With North Carolina’s renewable energy mandate under assault from Republican legislators, green groups seeking to sav...


Free ImagineSolar Online Course Demonstration

ImagineSolar will be holding another live demonstration of PV250e: Solar PV Economics a...

Canadian Solar Announces Partnership in 200 MW Tranquility Solar Power Project

Recurrent Energy signed an agreement with Southern Power to partner on the Tranquility ...

AWS Truepower Announces Major Expansion of its Due Diligence Team in Response to Growing Market Demand

AWS Truepower, an international leader in wind and solar energy consulting and engineer...


NATiVE Recognized for Excellence at 2015 Greater Austin Business Awards

NATiVE Recognized for Excellence at 2015 Greater Austin Business Awards NEWS RELEASE AUSTIN, Texas – Aug. 27...

Solar Energy Means Jobs, Savings, and a Low-Cost Future [infographic]

There are a lot of utility-sponsored legislative and regulatory attacks on solar energy lately, and we put together t...

How To Get People To Do Stuff

It’s no secret that psychology and sales go hand in hand. If you understand the principles of human psychology ...


Tildy Bayar is a journalist focusing on the energy sector. She is a former Associate Editor on and Renewable Energy World magazine.


Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Doing Business in South Africa – in partnership with GWEC, the Glob...

Wind Energy in South Africa has been expanding dramatically, growing fro...

Distributed Wind Energy Workshop

Description: Distributed wind energy is electricity that is produced for...

2015 AREDAY Summit

The 12th Annual AREDAY Summit, August 8-13th in Snowmass Colorado. Engag...


Clean Energy Patents Maintain High Levels in First Quarter, Solar L...

U.S. patents for Clean Energy technologies from the first quarter of 201...

Koch Professor drops his Koch title, still makes same errors plus s...

The Koch Professor’s title isn’t the only thing that’s...

Fact Check: AWEA represents American wind power

The American Wind Energy Association (AWEA) is proud of its members for ...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now