Big Prospects for Small Wind Turbines

Markets for turbines of less than 100 kW offer huge potential for growth if government incentives are set up, according to GlobalData's report on the sector.

Raghunandan Kothamasu, GlobalData
February 28, 2012 | 8 Comments

While 2011 figures have yet to come in, we know that the global small wind turbine market grew from 105.9 MW in 2006 to 275.8 MW in 2010. GlobalData's recent report – Small Wind Turbines (less than 100kW) – Global Market Size, Analysis by Power Range, Regulations and Competitive Landscape to 2020 – predicts even higher growth in the coming years, spurred by increasing incentives announced by various governments and by growing end user awareness. End user price is the most crucial factor affecting the growth of the market in both developed and developing countries. Also important are rebate programmes, property tax exemptions, financial incentives, annualised net metering and permitting issues.

According to the World Wind Energy Association (WWEA), it is difficult to assess the total number or capacity of small wind turbines, but in China alone there are roughly 300,000 small wind turbines generating electricity. In the US, the small wind turbine market grew 53% in 2010 to reach US$139 million; installations totaled 25.6 MW, up from 20.9 MW in 2009, according to a report by the American Wind Energy Association (AWEA). RenewableUK identifies over twenty manufacturers of small wind turbines in the UK alone.

The payback period of a small wind turbine is a major aspect of owning a system. This period depends largely on wind resource quality, tower height, siting, prevailing energy costs and turbine performance. Against this backdrop, with increasing incentives by governments and increasing energy security concerns, the report predicts that the small wind market will grow significantly from 275.8 MW in 2010 to 3726.5 MW in 2020 at a CAGR of 29.7%.

Global power generation from small wind turbines increased from 119 GWh in 2006 to 310.3 GWh in 2010 at a CAGR of 27.1%, and is expected to increase from 310.3 GWh in 2010 to 4203.8 GWh by 2020 at a CAGR of 29.8%.

Cost Analysis

The report assesses the cost of building a wind turbine according to its type, size, design and location. Installation cost is affected by the costs of construction, transportation, location, maintenance and transformers.

Of the major cost components, up-front or capital cost constitutes the primary cost of the wind turbine. Other components of the up-front cost include, for example, the cost of electrical equipment, grid connection and foundations. Up-front and capital costs constitute about 75%-90% of the total wind farm development cost depending on the speed of the wind, the supply of wind turbines in the market, and the arrangement of the wind turbines in the farm.

Land cost or land rent is the second largest component of wind energy development, constituting about 4% of the total cost. Other identified costs relate to electric installations, consultancy, financial costs, non-electrical infrastructure and control systems. Further development is hampered by a lack of available small to medium sized turbines. The factors contributing to this limited availability are: a focus on the development of large turbine models which have a greater worldwide demand; a lack of hardware availability due to shortages of raw materials; and difficulty in obtaining certification for establishing new or additional manufacturing capacity.

Installation costs include transportation, construction and interconnection cost. Transportation costs differ with the size of the tower: the larger the tower, the greater the transportation cost will be. New tower technologies such as self-erecting designs are in development and have the potential to bring down transportation costs.

Turbine value is also affected by the cost, availability, and supply of spare parts. Some turbine components, such as gearboxes, require regular maintenance. The maintenance requirement and hence the cost of such components also depends on their design.Tough turbines are designed to operate in extreme weather conditions but they involve a tradeoff, such as lower efficiency and higher cost. Thus the cost of operating a wind turbine differs according to weather conditions or location.

Global Market Share

Many companies are currently manufacturing small wind turbines. Globally there are over 250 manufacturers of turbines with a rated capacity of less than 100 kW. In 2010, Southwest Windpower of the US sold up to 21.1% of the total number of small wind turbines sold worldwide. Northern Power Systems with 17.7% and Entegrity Wind Systems with 8.2% are followed by Southwest Windpower. Bergey Windpower stands at fourth with 3.9%. As the small wind turbine market is highly fragmented, other manufacturers’ total market share stands at 45.2%.

Proven Energy Ltd of the UK was in fifth place, with a global market share of 3.9%, throughout 2010. In late 2011, however, the company entered receivership after the discovery of a technical fault in its flagship turbine model, the Proven 35-2. According to the company, the main defect was in the manufacture of the rotor shaft, because of which blades could fly off under high wind speeds causing severe safety concerns. It is estimated that Proven Energy sold around 500 turbines of the Proven 35-2 model, which has an average supply and installation cost of approximately £60,000 (US$92,796). This technical snag and the subsequent call by the company to shut down systems led to both capital and revenue losses for end users (an average lost revenue of £8538 ($13,292) per day). The total estimated capital cost lost by end users (agricultural sites, commercial premises and small wind farms) on their investment is around £30 million ($46.7 million). Receivers KPMG sold Proven Energy’s business and assets to Kingspan Renewables Ltd in October 2011.

The Proven Energy crisis will be an eye-opener for other companies operating in the same market space, and there will be greater emphasis on quality from the consumer end and more government scrutiny involved in the certification of small wind turbines in the UK. On a macro level Proven Energy’s problems illustrate the dependence of FiT projects (usually agreements valid for over 20 years) on the long-term sustainability of their technology. This brings the longevity of turbine manufacturers to the foreground, and this requirement could become an entry barrier to new players.

Key Global Market Drivers

Financial incentives and government policies are the main drivers for wind uptake. Governments have introduced or are in the process of formulating policies to promote renewable energy development, which is the main force behind the explosive growth of the wind power market worldwide. There are three main markets for small wind technology.

In the US, the wind market is primarily driven by federal tax credits and state-level RPS, the key regional market on the continent. PTCs have traditionally played a vital role in boosting US wind power capacity, making the country the largest wind power market in the world. The extension of PTCs for three years and the introduction of federal ITCs in 2009 are expected to fuel the growth of wind installations in the US. High up-front cost has been the major concern among small wind power users. Financial incentives reducing installation and operation costs are the key to stimulating interest among buyers. The introduction of ITCs is expected to give a huge boost to the small wind industry, while policies targeted at reducing investment costs will be effective in increasing mid-sized wind installations.

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8 Comments

Anatoly Arov
March 5, 2012

Dear sanman,
As I understood from your description, that you are offering CAES system (Compressed air energy storage and retriever device). My advice to you, try somehow find financing in your Country for prototype, this is media sicializing site about RE and mostly visited by entusiasts and not investing experts, in addition try to give some advantages of your idea and not only green perspective, maybe somebody will notice.
Good luck

Karen Grigoryan
March 4, 2012

Dear Mr.
Our company is officially registered in Armenia and works as a researcher in "Green Energy" area.
We have invented a way of producing electricity by means of compressed air, and I think, that it can be successfully combining to wind generators- in such days when the wind is weak or in general is absent.
Allow me, to give an interesting idea about association of wind generators with our invention. Probably it will interest and we can co-operate, because we have workings out in sphere of alternative energy sources, and we want to use these ideas…
As a result of long-term works on search of alternative energy sources, we managed to construct an engine (mechanism) - working with compressed air, which is connected to the dynamo-machine , and makes an electricity . In our deep belief, the engine (mechanism), in the near future will become the most simple and accessible energy source, because during its work it "uses" two components only, which stocks are practically inexhaustible in the nature - the water and the atmospheric air. The word "uses" is taken in inverted commas, as engines work occurs in the course of air expansion, and even, it is possible to consider, that air is rented from atmosphere -used in mechanism, and released back to atmosphere, without mechanical, chemical or physical change. Restoration of an initial stock of compressed air, occurs during work of the engine .
The engine is ecologically pure and absolutely safe because, there is no process of combustion and no harmful emissions in atmosphere. Examination, carried out for the purpose of licensing of the new engine, has shown- it is valid innovation and has enough a big future.
In the absence of financial and material means, we did not yet manage to finish the program and to create an engine prototype, that on practice to show its abilities.
It has forced us to search for partners or investors. +37491221700

David Bainbridge
March 3, 2012

SWWP turbines have also been severely overrated by marketing literature in the past. How many people can actually take advantage of a roof top mounted wind turbine like SWWP promotes? It is no surprise they have such a large market share when so many people have little knowledge of good quality turbines and how to properly install them. Many dealers/installers of these very small turbines (<10KW) also do not know how to properly install/site them. The number one thing people skimp on when installing these small turbines is tower height. If someone can't afford a 1KW turbine on a 100ft tower they may just sell them a 60ft tower instead even though the customer has 60ft trees close by. There needs to be a minimum standard installers should abide by in order to get the warranty (30ft tower height above anything within 300ft for instance). It is just hurting the image of the industry to have so many improperly installed in the US.

John Simon
March 2, 2012

Entegrity Wind Systems went bankrupt in 2009. Seaforth Energy, who manufactures the AOC 15/50, bought the assets and IP in 2010.

Anatoly Arov
February 29, 2012

Thanks for good article with ref. to supplir sites, it will be adwantage to add more data - such as 1KW cost for hardware plus grid conversion cost. Other point is storage or ability to share power with local community as alternative to storage.
Can you look also to our carousell type vertical turbines with no noise, safer and more effective than propeller type 50-100KW, for more info pips.arov@bellnet.ca

ANONYMOUS
February 29, 2012

Excellent article and the two comment. But I believe that with education for the end users and the necessary policies of the governments it will be possible to developed the market of small wind turbines.
Education and Energy are the best way to make possible to reduce the dependency in fossil fuels.
Carlos Loures

shamil ayntrazi
February 29, 2012

VI. PHYSICAL DISADVANTAGES of WT PRESENT DESIGN
1. Taking a modest 100 meter deep sea bed, then the WT Nacelle is at a minimum of 191 meters above the sea bed (100+9m clearance +164/2 Blade length) which is equivalent to a 64 floors high building. Just imagine that a weight of 350 tons is installed at the roof of a 64 floors high building.
2. Adding 550 tons steel foundation gives a total of 900 ton structure acting at the sea bed.
3. Add the horizontal forces of approximately 4 tons at a wind speed of 50 Km/hour and 86 tons at 240 Km/hour wind speeds in addition to wind and cross currents forces acting at the WT support. Add the vibrations acting on the WT support you end up with an engineering structural feat.
4. Stay wires with respective anchors at the seabed are needed to counteract horizontal wind forces and cross currents. These may become useless in the long term due to settling of the anchor of the WT support.
5. Stay wires are installed under water making the offshore sea area of around 10 square kilometers required for 24x6-megawatt wind turbines out of bound for navigation.
6. A team of research engineers from the Technical University of Denmark report that stone armor around the 4.2 m diameter mono-pile foundations of the vast Horns Rev offshore wind farm in the North Sea was found to have unexpectedly sunk by up to 1.5 m.
7. Imagine the service and lifting equipment required for servicing and maintenance.
8. Some firms are proposing helipads at each WT supporting structure.
VII. ELECTRICAL DISADVANTAGES of WT PRESENT DESIGN
1. The conversion of WT AC outputs to DC and back to AC reduces the overall efficiency of the system, imposes additional costs for expensive conversion/inversion equipment and control gear, and additional operation and maintenance costs..

shamil ayntrazi
February 29, 2012

For detailed discussion of WT visit www.renewableenergypumps.com
Follows a sample:
IV. WIND TURBINE WEGHTS
1. The heavy weight of wind turbines matters financially because it not only makes it difficult to install them but also to transport them. The combined weight of the SWT-6.0-120?s nacelle and blades is 350 tons (no small matter).Source: Clean Technica (http://s.tt/12Ftj
2. The first foundation of the offshore wind farm Thornton Bank 2 has been successfully installed off the coast of Belgium. The around 50 meter high and 550 ton steel foundation (a so-called jacket foundation) was manufactured in Hoboken near Antwerp, and in the past few days it was transported via pontoons through the Scheldt estuary to its final destination around 30 kilometers off the Belgian coast.
3. Thornton Bank´s second construction phase will have 24x6-megawatt wind turbines on around 10 square kilometers area. The total weight that the individual foundations will carry is around 700 tons.

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Raghunandan Kothamasu

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