The Global Wind Turbine Market, 2nd Edition.pdf

SBI 11200 Rockville Pike Rockville, Maryland 20852 800.706.8242 240.747.3097 www.sbireports.com The Global Wind Turbine Market, 2nd Edition November 2011 This page intentionally left blank THE GLOBAL WIND TURBINE MARKET, 2ND EDITION NOVEMBER 2011 The Global Wind Turbine Market, 2nd Edition has been prepared by SBI Energy. Our market intelligence reports are specifically designed to aid the action-oriented executive by providing a thorough presentation of essential data and concise analysis. Vice President of Publishing Don Montuori Publisher Shelley Carr Author Norman Deschamps Research Director David Sprinkle Production Assistant Farah Pierre Assistant Editor Daniel Granderson Publication Date November 2011 Copyright © 2011 SBI Energy SB6459620 1-59814-407-3 This page intentionally left blank Company Background SBI Energy (Specialists in Business Information), a division of MarketResearch.com, publishes research reports in the industrial, energy, building/construction, and automotive/transportation markets. SBI Energy also offers a full range of custom research services. To learn more, visit www.sbireports.com. Why Buy From Us? In-depth researchexpert analysis. Our reports are written by analysts with years of experience as professionals tracking various industries. This experience and our time-intensive research methodology result in authoritative analysis that aids the decision-making processes of our clients. Our reports continue to provide a broad, top-level overview of a market and offer not only the raw data, but focus on interpretation of that data to make it more relevant and usable by our clients. The right informationat the right time. From identifying the effects of emerging markets across major industries, to covering the trends in niche markets, our reports are timely. Our editorial team tracks the trends that will shape these markets in the coming months, and years. SBI Energy provides the expert analysis our clients have come to rely on to make the right strategic decisions, at the right time. Products you needwith flexibility in pricing and delivery you want. With Buy By The Slice, you save money by purchasing smaller section(s) of a report (when you dont need the entire report) which you can read immediately online. Instant Online Delivery is a unique online delivery method that enables you to purchase, read and use the research you need immediately. Personalized Client Support SBI Energy is unrivaled in the level of client support that we provide to our clients. From assistance in identifying the most relevant research, to post-sale question and answer support, our goal is to develop long-term relationships that meet the ongoing needs of our clients. Norman Deschamps (New Brunswick, Canada) holds a Bachelor of Science in Physics and a Masters in Aerospace Engineering. His research work has included developing a mathematical model to quantify anthropogenic environmental disasters, quantifying window energy loss, and analysis of magnetostrictive materials which was published in the Journal of Condensed Matter Physics. Norman now works as a science writer and as a consultant to businesses who are interested in obtaining independent scientific analysis for their products. About the Author This page intentionally left blank The Global Wind Turbine Market, 2nd Ed. Table of Contents November 2011 © SBI Energy i Table of Contents Chapter 1 Executive Summary . 1 The Global Wind Turbine Market . 1 Figure 1-1 Wind Turbine Installations by Country by Year, 2006-2010 (in MW). 2 Wind Turbine Competitors 2 Figure 1-2 Market by Competitor, 2011 (in percent) . 3 China 3 U.S. 4 India 4 Figure 1-3 Top Five Global Wind Turbine Market Countries, 2006-2010 (in billion $) . 5 Germany . 5 Spain 6 Wind Turbine Generating Set Imports and Exports 6 Figure 1-4 Exports of Wind Turbine Generating Sets, 2000-2020 (in billion $ and percent) . 7 Wind Turbine Market Forecast . 8 Figure 1-5 Global Cumulative Installed Wind Forecast, 2011-2020 (in GW) . 9 China Forecast . 9 U.S. Forecast . 10 India Forecast . 10 Figure 1-6 Global Wind Turbine Market Forecast by Country, Median Scenario, 2011-2020 (in billion $) . 11 Germany Forecast 11 Spain Forecast . 12 Wind Turbine Market Trends . 12 Figure 1-7 Key Drivers MWh) 14 The Offshore Wind Turbine Market 14 Table 1-2 Cumulative Offshore Wind Installations by Geographical Region, 2006-2020 (in MW) . 15 Curtailment Concerns . 15 Wind Turbines: Bigger is Better 16 Figure 1-8 Average Size of Installed Wind Turbines, 2006-2011 (in kW)16 Employment Trends . 17 Table 1-3 Wind Industry Jobs by Country, 2010-2020 17 Financial Trends: FITs and Investments . 17 Figure 1-9 Countries with Wind Feed in Tariffs, 2011 . 18 Table of Contents The Global Wind Turbine Market, 2nd Ed. ii © SBI Energy November 2011 Small Turbine Trends . 18 Chapter 2 Introduction . 19 Scope 19 Methodology 20 A Note on Trade Codes and Import and Export Data 21 Table 2-1 Wind Turbine Import and Export HS Codes . 22 Terminology 24 Wind Turbine Technology . 24 Table 2-2 Turbine Component Weights and Costs (in percent) 25 Parts of a Nacelle Assembly 26 Figure 2-1 The parts of a Wind Turbine . 26 Direct compiled by SBI Energy. Note that countries in the table are the top five countries by cumulative wind installs as of the end of 2010, but the countries are ordered in terms of the MW of wind turbines installed in 2010. From a total installed wind energy perspective, there is a very clear division between the top five countriesChina, the U.S., India, Spain and Germanyand the rest of the world. The top five countries accounted for 76.5% of all the wind installed in the world, while the next five countries in the list only hold 11.7% of the worlds wind turbine installations. Wind Turbine Competitors The utility-scale wind industry is dominated by a short list of top manufacturers, including global industry giants such as General Electric (GE) and Siemens, as well as pure play wind companies such as Vestas and Sinovel. In 2011 the top ten wind manufacturers will account for 76.1% of the global wind turbine market. Vestas will continue to maintain its role as the number one wind turbine manufacturer in the world, while GE will manage to regain second place from Sinovel, who will drop to third. 010,00020,00030,00040,00050,00060,000 Others Ger. Spain India US China Pre-200620062007200820092010 The Global Wind Turbine Market, 2nd Ed. Chapter 1: Executive Summary November 2011 © SBI Energy 3 Figure 1-2 Market by Competitor, 2011 (in percent) Gamesa, 7.3% Dongfang, 4.2% Enercon, 7.5% GE, 9.8% Goldwind, 8.5% Siemens, 8.2% Sinovel, 9.4% Suzlon+ REpower, 7.2% Others, 23.9% Vestas, 14.1% Source: estimated by SBI Energy China After more than doubling its market year after year between 2006 and 2009, even China bowedslightlyto the world wide recession by posting a market gain of only 11.9% in 2010. From a minimal market of $1.2 billion in 2006, Chinas wind market has surged to $15.0 billion in 2010, a CAGR of 89.6%. 2011 will be the first time in five years Chinas wind market drops, as SBI Energy expects to see the country post a value of $14.0 billion for the year as a result of smaller installation numbers and a continuing drop in turbine prices in the country. While Chinas wind industry is completely dominated by domestic production, there is also little export of Chinese wind products. Imports accounted for just 2.2% of the total Chinese market while exports counted for just 5.7% of domestic production. As much as Chinese manufacturers would like their export numbers to grow faster, they will be hampered by more traditionally exporting countries such as Germany and Spain which are also seeking to make use of excess production capacity in the midst of slowing domestic markets. Chapter 1: Executive Summary The Global Wind Turbine Market, 2nd Ed. 4 © SBI Energy November 2011 Somewhat surprisingly, Chinas two main wind provinces are not on the coast; Inner Mongolia and Gansu are right in the middle of China. Inner Mongolia had a total wind capacity of 13.9 GW installed as of the end of 2010 and was also the province with the most new wind capacity installed as well. China has only recently begun looking at offshore wind and the country did not install its first test offshore system until 2007. Offshore only accounted for less than 1% of the countrys wind capacity installed in 2010 and 2011. U.S. From 2006 to 2009 the U.S. wind turbine market grew strongly, climbing from $3.2 billion in 2006 to almost five times that amount in 2009 at $15.0 billion. This incredible growth was spurred by the production tax credit (PTC) and extremely strong support behind the growth of domestic wind turbine manufacturing. Then the recession took its toll and the market dropped 51.4% in 2010 to just $7.3 billion. However, 2011 is seeing a renewal of the wind market, with SBI Energy expecting the market to grow 57.7% and reach $11.5 billion for the year on the strengths of Section 1603 of the American Recovery and Reinvestment Act of 2009 (ARRA) and the last vestiges of the U.S. Department of Energys (DOE) Guaranteed Loan Program. U.S. wind capacity is quite regional; Texas alone has over 10 GW of installed capacity and the top five states together account for 53.0% of the nations total installed wind capacity. The U.S. has always been a strong wind turbine market for other countries rather than being a world leader in exports. Imports have remained essentially stagnant between 2006 and 2010 at a little over $2 billion, with over half of all imports coming from Denmark and India. However, with the growth of the domestic market, imports as a percentage of the total domestic market have dropped from 65.4% in 2006 to an estimated 27.5% for 2011. India The Indian wind industry has been in a strong position ever since 2003, the result of incentives enacted that year that allow accelerated depreciation of the project cost for tax purposes. While the market has fluctuated between 2006 and 2010, the overall market trend has been positive, with a CAGR of 6.5% for the period. Growth will continue in 2011 with SBI Energy estimating the market to surpass 2008s high and reach $3.4 billion for the year, keeping the country in third place. The Global Wind Turbine Market, 2nd Ed. Chapter 1: Executive Summary November 2011 © SBI Energy 5 Figure 1-3 Top Five Global Wind Turbine Market Countries, 2006-2010 (in billion $) Source: SBI Energy. Like China, Indias wind turbines are mainly supplied by domestic manufacturing, with over 95% of the market being provided from within India. As a result, imports are not a large factor in the Indian wind market. Exports continue to be a strong part of Indias wind industry, comprising 12.5% of domestic production in 2010. The U.S. is Indias strongest wind trading partner, along with Brazil; however the export market to Brazil will decline now that Suzlon has built manufacturing facilities in the country. Exports of Indian wind turbine generating sets grew from $199.0 million in 2006 to $302.3 million in 2010, a CAGR of 11.0 percent. Germany Since 2006 Germanys domestic wind market has stagnated, seeing a CAGR of just 1.0% between 2006 and 2010. In fact, Germanys total market was the only market of the top five countries to actually decline over the last five years, going from $2.9 billion in 2006 to $2.2 billion in 2010, as the domestic market has withered and increasing exports have been unable to fully compensate. Offshore wind is going to be one of two key wind growth areas for Germany, with installations accounting for 12.0% of all new 2011 wind capacity for the $7.4 $12.4 $15.0 $7.3 $2.4 $2.2 $5.0 $2.4 $3.6 $2.2 $2.3 $2.8 $7.3$6.2$10.8$13.6$12.8 $13.4 $1.2$3.1 $6.6 $15.0 $3.2 $3.1 $1.9 $2.7 $2.0 $2.8 $2.0 $2.5 $0 $10 $20 $30 $40 $50 $60 20062007200820092010 OthersChinaUSIndiaSpainGermany Chapter 1: Executive Summary The Global Wind Turbine Market, 2nd Ed. 6 © SBI Energy November 2011 country. The other major segment of the German wind industry is going to be repowering upgrading turbines to better utilize the more valuable wind resource locations. SBI Energy expects Germany to post a market of $2.3 billion in 2011. Germany is unique in that it has both strong import and export markets for wind turbines. Whereas both imports and total market have remained flat over the last five years, Germanys exports have grown from $1.3 billion in 2006 to $2.3 billion in 2010, a CAGR of 15.8% for the same period. 2011 will continue this trend, with SBI Energy anticipating total exports to reach $3.0 billion for the year. Germany mainly exports wind turbines to the rest of Europe, particularly France, Italy and the United Kingdom (UK). Spain Like Germany, Spains wind installations have lagged considerably over the past five years, and the market has slowed as a result. From a total market of $2.0 billion in 2006, Spains wind turbine sales have risen to $2.2 billion in 2010, a CAGR of just 1.4% for the period. Spains market is going to radically drop in 2011, going down 39.2% due to the Spanish governments project-licensing register and lower feed in tariffs (FIT) which came into effect at the end of 2010. To compensate, wind turbine manufactures in Spain have been steadily ramping up exports, which rose from $360.5 million in 2006 to an estimated $1.8 billion in 2011. The markets for those exports have shifted dramatically over the last five years as well, going to emerging wind countries such as Mexico and Brazil. Between 2006 and 2010, Spanish exports of wind turbine generating sets climbed from $327.0 million to $747.0 million, a CAGR of 22.9%. Wind Turbine Generating Set Imports and Exports Exports of wind turbine generating sets have grown tremendously over the past decade, climbing from just a half a billion in 2000 to $4.6 billion in 2010. However, there is a notable downward trend in this percentage; in general, exports are decreasing over time as manufacturers work to keep production closer to existing markets. 2011 is seeing a surge in exports as the result of stagnating markets in strong wind turbine manufacturing countries such as Germany and Spain and SBI Energy estimates exports of wind turbine generating sets to reach $5.9 billion for the year. In general, the percentage change in year over year (YoY) exports tends to follow the same trends as the YoY percentage changes in capacity additions, implying that the lead time between the transport of the wind turbine generating sets and their The Global Wind Turbine Market, 2nd Ed. Chapter 1: Executive Summary November 2011 © SBI Energy 7 installation is not usually long enough that the change in exports provides an indication of longer term market trends. Figure 1-4 Exports of Wind Turbine Generating Sets, 2000-2020 (in billion $ and perc