LONDON — The impact of the economic crisis can be seen in BTM’s latest report, which again shows record new installations, but a much lower growth rate than in 2009. The rise of Chinese turbine manufacturers and the US financial situation have changed the balance of the market.
Yet another record year for newly installed wind capacity – to the tune of 39.4 GW – the year 2010 brought total installed capacity worldwide to around 200,000 MW, an impressive increase in cumulative worldwide installations of some 25 percent. However, in terms of the volume of annual installed capacity the increase was a far more modest three percent. Indeed, the effects of the global economic crisis can clearly be seen in this stagnation of growth: for the past five years annual installed capacity has grown by an annual average of 27.4 percent.
KEY PLAYERS IN THE WIND SECTOR
Vestas is still the world’s top turbine manufacturer in terms of its percentage of market volume, but GE Energy lost its title as the second largest supplier to China’s Sinovel. Together Vestas and Sinovel delivered 10,228 MW of capacity in 2010. The two leading suppliers’ share of the total deliveries to the market was 25.9 percent in the year, which is a one percent increase compared with that of 2009 from the two players.
Sinovel took full advantage of the boom in the Chinese market, enabling it to move up from the third position in 2009 to second in 2010. Conversely, GE Energy dropped to third place due to the economic downturns in the US market. And, GE Energy is closely followed by another Chinese supplier, Goldwind, which installed almost the same number of turbines as GE in 2010. German Enercon ranks at No. 5 in the world, and is followed by Indian-based Suzlon Group at No. 6.
In their home wind power market Chinese domestic turbine manufacturers made further gains, while foreign-owned manufacturers only achieved a 10.5 percent market share in 2010 – a 3.5 percent drop from the previous year. Along with Sinovel and Goldwind, two other Chinese manufacturers were listed in this year’s top 10 in terms of global capacity delivered. Dongfang, the third largest Chinese manufacturer, first entered the top 10 list in 2009, and United Power entered for the first time in 2010. Meanwhile, other Chinese companies Mingyang, Sewind and Hara XEMC, listed as No. 11, No. 14 and No. 15 in the world respectively, are emerging to challenge the positions of the traditional market leaders from Europe and the US.
It is worth noting that 2010 also saw more MW-rated Chinese manufactured turbines exported. During the year, five Chinese turbine suppliers installed 13 machines in five different foreign markets. Following its first three 1.5-MW direct drive wind turbines installed in the US in 2009, Goldwind installed six units of its 750-kW-rated gear drive turbines in Cuba. Meanwhile, Mingyang and A-Power installed their first wind turbines in the US market in 2010 and HEAG also installed three 1.5-MW turbines in Chile and White Russia.
THE TOP 10 SUPPLIERS OF 2010
Vestas Wind Systems (5842 MW)
Vestas Wind Systems maintained its position as the largest manufacturer of wind turbines in the world in 2010, both in terms of annual installations and cumulative installed capacity. lts market share increased from 12.5 percent in 2009 to 14.8 percent in 2010, despite the economic environment. Vestas was the top supplier to Sweden and was present among the top three suppliers in all the 10 largest markets in the world, apart from China and Canada.
Sinovel (4386 MW)
Sinovel has performed well over the past three years. The Chinese company entered the top 10 list in 2007 and became the second largest in the world in 2010. It increased nearly two percent of its global market share in 2010. The year also saw Sinovel connecting 34 of its 3-MW offshore turbines to the grid in Shanghai, China, which is the first project of this kind in Asia. For more on this groundbreaking project see our March-April 2011 edition.
GE Energy (3796 MW)
GE Energy is still the third largest wind turbine manufacturer in the world, but its overall market share has decreased from 12.4 percent in 2009 to 9.6 percent in 2010. With a strong manufacturing base, GE is naturally the largest supplier to the U.S. market, where it has more than 50 percent of the market share, and the second largest supplier to its neighbor, Canada.
Goldwind (3740 MW)
This pioneer in the Chinese wind power market installed 3740 MW in 2010. Its global market share increased from 7.2 percent in 2009 to 9.5 percent, a figure which represents one of the best performances among the top 10 turbine suppliers in 2010.
Enercon (2846 MW)
The German manufacturer Enercon installed 2846 MW in 2010, but its global market share dropped to 7.2 percent from 8.5 percent in 2009. Enercon was, nonetheless, the biggest supplier last year to both the German market – where it has a 55 percent market share – and France; it was also the third largest in Italy and Canada. It is represented in more countries than other suppliers, but at the same time is absent from the world’s two largest wind power markets – the U.S. and China.
Suzlon Group (2736 MW)
Suzlon Energy, the major Indian company, completed the acquisition of REpower in 2009 and now holds over 90 percent of the shares and voting rights in the company. Suzlon installed 1876 MW in 2010 while its subsidiary group REpower succesfully installed 859 MW over the year. Together the two players accounted for 6.9 percent of world market share, which overall makes the Suzlon Group the world’s sixth largest wind turbine supplier. Furthermore, Suzlon was the No. 1 supplier to India in 2010. Meanwhile, REpower claimed the No. 2 spot for wind turbine suppliers to France and was the third largest supplier to its German home base market.
Dongfang (2624 MW)
Dongfang, the third largest Chinese manufacturer and the world’s No. 7, installed 2624 MW in its homeland during 2010. The company entered the top 10 list for the first time in 2009 and maintained its global market share in 2010.
Gamesa (2587 MW)
Spanish group Gamesa fell back to become the eighth largest supplier in 2010 from being the third largest in 2008. The company’s world market share dropped from 12 percent in 2008 to 6.6 percent over the year. It did, however, maintain its leading position in Spain, and was also the largest supplier to the Italian market.
Siemens Wind (2325 MW)
Germany’s engineering major Siemens installed 2325 MW in 2010, representing a 2.6 percent increase in market share when compared with 2009. It is a coincidence that its overall global market share was 5.9 percent in both 2009 and 2010. Siemens Wind was the largest supplier to both the UK and Canadian markets last year and retained its position as the largest supplier to the global offshore market.
United Power (1600 MW)
United Power was established in 2007 by China Guodian Corporation, one of China’s ‘big five’ state-owned utilities. The company, listed as the world’s No. 12 in 2009, installed more than 1600 MW in China in 2010, making it one of the top 10 players for the first time.
OTHER TOP 10 CONTENDERS
All candidates for a place in the Top 10, the next five manufacturers in line in terms of market share include Nordex, a recurring player in the top 10 list in recent years, which was ranked No. 12 in 2010. It follows eleventh place Mingyang, which successfully exploited the booming domestic market. Japanese industrial conglomerate Mitsubishi supplied some 643 MW over 2010, while Chinese players Sewind and Hara XEMC delivered 598 MW and 507 MW respectively and have already pushed a number of the established turbine suppliers from Europe out of the top 15 rankings.
SUPPLY SIDE: GLOBALISATION AND CONSOLIDATION
For the industry as a whole, the year-on-year growth rate in 2010 in fact decreased from 35 percent in 2009 to just 3%. Remarkably, it is the first year that the market has shown a slowdown in growth since 2004. Indeed, to achieve this three percent market growth rate in 2010 seems almost miraculous, and results largely because wind power installation rates fell by nearly 50 percent in the U.S., the world’s second largest wind market.
China made the greatest contribution to the global wind power installations in 2010 and it is important to note that 48 percent of the world’s installations over the year took place in the country. Vestas Wind Systems and GE Energy are still two large manufacturers of wind turbines in the world and now together hold 24.4 percent of the global market. However, their leading position was challenged by leading Chinese turbine suppliers in 2010. Sinovel has already replaced GE Energy as the worId’s second largest turbine supplier and four other Chinese supply companies in the Top 10 list together account for a total of 31.2 percent of the global market share. Indian Suzlon Group consolidated its leading position in the wind industry by completing the acquisition of the Martifer Group’s stake in REpower in 2009, although its global market share actually decreased by 2.8 percent in 2010.
Another characteristic of the 2010 supply pattern was that the ‘top’ lost market share to the ‘bottom’. Before 2007 it was usually the case that the group of companies below the Top 10 accounted for five to six percent of the total market. This started changing two years ago. ln 2008 it was 15.8 percent, mainly caused by the rapid growth of Chinese companies. Last year it increased further to 20.2 percent.
Consolidation among turbine suppliers has been a particularly strong feature over the past three years. Following the 2009 acquisitions of Scanwind by GE Energy, Darwind by Hara XEMC and DeWind by Daewoo, Areva completed the purchase of Multibrid in 2010. At the end of 2010, United Technologies Corp. (UTC) completed its purchase of Clipper by acquiring all remaining shares.
The offshore sector has expanded, with a total capacity of 1444 MW installed in 2010, which represents a 109 percent annual increase. Nine new offshore wind farms, with a combined power generating capacity of 1405 MW, were installed in Europe, especially the UK. The remainder of new offshore capacity was in China, where Sinovel installed the first Chinese offshore wind project in Shanghai in 2010. Although the new offshore installations in 2010 represented only 3.7 percent of the global total, many projects are in the pipeline over the next couple of years, particularly in the UK and Germany. China and South Korea are also expected to emerge as significant markets for offshore wind.
DEMAND SIDE AND MARKET GROWTH
In terms of annual installations 2010 saw a modest increase of just three percent. This outcome happened in the second year after the financial/economic crisis struck the world, including some of the wind industry’s most important markets in the US and Europe. Nonetheless, highlights on the demand side include:
- Cumulative installed capacity by the end of 2010 reached 199,520 MW. Around 24,000 new wind turbines were erected across more than 50 different countries.
- Europe lost its previous position as the largest wind power continent, though 27.9 percent of all new installation in 2010 took place in Europe. Four years ago the European share was 51 percent.
- The Americas dropped dramatically compared to 2009. This was caused by a dramatic fall in the US market, where 5115 MW of new capacity was added. That was around half of the installations in 2009. Altogether the Americas accounted for a 16.8 percent share.
- Asia experienced significant growth, including the OECD Pacific region which increased its cumulative capacity from 42,037 MW in 2009 to 63,645 MW in 2010, a growth of 51.4 percent. China was by far and away the leading country, with 18,928 MW of new capacity in 2010. India also saw an increase to see 2139 MW of new installations. The region as a whole accounted for 54.8 percent of the year’s global total.
- Among the top 10 markets, China kept its position as the largest in 2010, followed by the US. Germany installed 1551 MW in 2010 while the UK and Spain improved their positions, with 1522 MW and 1516 MW respectively.
- Penetration of wind power in the world’s electricity supply has reached 1.92 percent, the proportion expected to be produced in 2011.
- In the offshore market, nine new projects were installed. The total offshore installation in 2010 was 1444 MW. Most of the new offshore wind is installed in the UK, but Denmark and Belgium contributed with large-scale projects. Germany saw its second and third projects developed: Baltic 1 and Bard 1 (phase 1). China, which entered the offshore arena in 2009 with Donghai Bridge, completed the project in 2010. The cumulative capacity of offshore wind came to 3554 MW in 2010.
TECHNOLOGY TRENDS – DIRECT DRIVE CONCEPT
Another interesting change in the wind industry is in the supply of direct drive wind turbines. Until recently, this was the sole preserve of the German company Enercon, but a large part of new installations in China have come from direct drive turbines, most significantly from Goldwind and Hara XEMC. ln total, direct drive turbines supplied by these three companies in 2010 accounted for 16.8 percent of recorded global supply, a 2.9 percent increase from 2009.
CONTINUED UPSCALING OF TURBINES
Wind turbine generators continue to get larger, but at a very slow pace. Despite the fact that larger turbines are being marketed in Europe, the average size of wind turbine installed increased only slightly to 1655 kW during 2010, an increase of 56 kW from 2009. This was mainly due to the impact of the new entrant Chinese companies, which mostly supply 1.5-MW machines, and the fact that most of the GE turbines installed are its 1.5-MW model.
PRODUCT SIZE SEGMENTATION IN THE 2010 MARKET
There are still no signs of a pause in the up-scaling in the size of wind turbines. At present the onshore market has been accepting the largest turbine models, some of which were designed with offshore installation in mind, although some logistical challenges have to be dealt with in terms of transport by road of very large components. Logistics might be a limiting factor for further up-scaling. Certain geographic areas are simply not accessible for large machines.
Enercon now manufactures the world’s largest commercially available onshore wind turbines, with a rated capacity of 7.5 MW and a rotor diameter of 127 metres. The REpower 6M 6.15 MW turbine is the largest commercial turbine currently commercially available for offshore projects. A 10 MW offshore turbine is under development by OEMs like Clipper, SWAY, AMSC and Sinovel. Most recently, the results of a feasibility study for a 20 MW offshore turbine was presented by UpWind, a research programme supported by the EU.
FORECASTS AND PREDICTIONS FOR 2016-2020
BTM has upgraded its forecast slightly compared to last year’s, predicting an average growth rate of 15.5 percent per year for new annual installations up to the end of 2015. By then the annual rate of new capacity is expected to surpass 81,000 MW per year. The cumulative level of installations expected over all five years is 314,175 MW, resulting in nearly tripling the current total. A growth of 16 percent over 2010 is expected in 2011.
For 2016-2020 BTM predicts an improved average growth rate of 11.5 percent. It says that Europe will lose its leading role by 2015 and account for 29 percent of cumulative demand over the forecast period; that the Americas, particularly the U.S. and Canada, will increase their contribution by the end of the forecast period; South and East Asia will take the leading role and see a rapid increase, particularly in China and India, and will account for 41.4 percent of all installations over the forecast period; the OECD Pacific will see stable growth led by Australia and Japan.
And, by the end of 2015, cumulative installations in the world will have reached 513.6 GW of which 179 GW will be in Europe, 188.3 GW in South & East Asia and 121.7 GW in the Americas.
The International Wind Energy Development report is published by BTM Consult – A Part of Navigant Consulting.
Tildy Bayar is a freelance journalist focusing on the energy sector.