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Wind Energy Market and Industry
Market Opportunities
  • Saturated markets like Germany will see a lot of activity in re-powering sites that are coming to the end of their first lease.
  • The biggest market with agressive growth is China.
  • In Europe, the biggest opportunity is offshore in the North Sea, especially in the UK, as the UK market is not saturated. By April 2010, the UK has reached 1GW off-shore capacity with a further 4GW already approved, and potential for another 40GW
  • Latin American countries Chile, Peru and Brazil
Technology Opportunities
  • Unlike in solar, device efficiency has not improved much in the past years. Rotor efficiency is not driving costs in wind energy.
  • Technological advances will be evolutionarily driven by the size of the turbine and off-shore with pressure on material (weight, strength and cost) and operations & maintenance costs.

 

 

 

Wind Energy Market

The countries with the largest cumulative wind energy capacity are China, USA, Germany and India. Early adopters of wind energy like Denmark, Germany and Spain have moved into lower growth (less than 10% p.a.) since 2008. Higher growth markets have moved to China, the United Kingdom (mostly off-shore) and South America. In Africa, wind energy is still in its infancy, largely driven by Egypt and Kenya.

(based on data from European Wind Energy Association)

The Wind Energy Industry

The demand for wind energy converters (WECs) is met by a highly competitive industry. There is no oligopoly here. No company has more than 20% market share. The largest manufacturers are Vestas, Siemens-Gamesa and Goldwind. We have seen some market consolidation over the last decade - the most prominent merger being Siemens and Gamesa - but not nearly as dramatic as in solar.

There are a distinct regional flavours to this picture: For instance, the German market is dominated by Enercon with a market share of 60%. Enercon may find it difficult to maintain its global market share if the market in Germany slows down. Similar GE Energy has a dominant position in the U.S. and Gamesa in Spain. With ever larger models, however, capital requirements increase, favouring larger companies. We predict therefore some M&A activities in the future.

Cost Structure

Cost Structure of Wind FarmsNot surprisingly, the turbine itself accounts for most of the costs of an installation. However, costs for cabling to the transformer, grid connection, foundation and roads can be significant.

Project development includes in-depth wind studies, permitting, but may also include noise studies and other nevironmental assessments.

Altogether, wind turbines come to around €1,000 per installed kW of rated power.

In offshore installations, the foundation has a much larger share in the total.

 
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