The split of lubricant consumption by region tracks the division of global installed capacity. China is the largest market for lubricants used in wind energy, accounting for 34% of total demand, followed closely by the United States with 21%. Germany and India account for an approximate share of 6% each.
However, Germany’s demand is slightly more than that of India according to the recent Lubricants for Wind Turbines: Global Market Analysis and Opportunities report by global market research and management consulting firm Kline.
The overall demand for lubricants used in the wind-energy industry will increase from 37.6 kilo-tonnes in 2015 to 53.7 kilo-tonnes by 2020, reflecting a compound annual growth rate (CAGR) of 7.4%.
Lubricant demand growth will be influenced primarily by three factors: growth in wind energy capacity, the penetration of direct drive machines, and drain interval extensions. The main lubricants used in a turbine include gear oils, greases, and hydraulic fluids.
“Wind energy is rapidly gaining significance as a source of electricity due to its environmental friendly nature,” says Sushmita Dutta, a Project Lead in Kline’s Energy Practice. “Electricity produced from wind energy does not use any non-renewable resource and does not produce carbon emissions. Furthermore, governments around the world have supported the wind energy industry through tax holidays, mandatory usage requirements, pricing support, and subsidies.”
He says that driven by this support, wind capacity has grown rapidly, increasing at a CAGR of 24% since 2000.
“Furthermore, the need to reduce gearbox failures and increase reliability under extreme operating conditions while extending drain intervals has contributed towards increased usage of synthetic lubricants,” adds Dutta. “The wind energy industry is unique compared to other end-use industries in that it has a very high share, exceeding 80%, of synthetics in overall demand in all regional markets including Asia.”
As the wind industry is risk averse, the fear of gearbox failure and the need to maintain long drain intervals to control costs make synthetic products attractive choices.
“The use of biodegradable fluids is practically nonexistent,” continues Dutta. “The service conditions in a wind turbine are too severe and biodegradable oils tend to breakdown to release acids which attack the bearings and other copper parts. In the future, biodegradable oils may carve out a niche in the offshore market if their service life could be increased.”
Global lubricant demand in the wind energy industry has positively correlated to the growth in the total installed wind energy capacity. Lubricant demand growth has slightly trailed the increase for wind energy installed capacity. There are several reasons for this, including the penetration of direct drive turbines, which dampens demand for lubricants as does the extension of drain intervals.
Drain intervals will slowly increase from three years in 2015, to five to six years by 2020 for on-shore installations, and five years in 2015 to six to seven years in 2020 for off-shore installations. As turbine capacity has increased, especially beyond 3 MW, the amount of lubricant consumed per megawatt is also reduced.
Existing lubricant marketers will face the threat of new lubricant suppliers emerging, especially in the service fill market. This threat is particularly notable in China where there is a trend towards “buy Chinese.” Besides continuing to partner with OEMs and emerging customer groups, lubricant marketers need to strengthen market entry barriers by stressing their track record and knowledge of products and technology.
To learn about the Lubricants for Wind Turbines: Global Market Analysis and Opportunities report, click here to register for the complimentary webinar, which will take place on Wednesday, November 2, 2016 at 9:00 AM EDT.