The long-term global outlook for wind power investment is a growth story driven by government mandates for increased clean energy, says Jamison Bender, associate partner with Ducker Worldwide (www.duckerworldwide.com). The International Energy Agency (IEA) projects the demand for global electricity to double by 2030, growing 2.6% each year. Bender’s firm recently completed a study of global wind-production issues. A summary of the report appears here with more information at www.windpowerengineering.com.
Future estimates from industry associations and national agencies all vary somewhat. However, the consensus is that about 250 GW of turbine capacity will be added to the market by 2015, and potentially almost 600 GW added through 2020. China, Europe, and the U.S. are expected to drive the most long-term volume.
Despite a robust long-term outlook for wind power, equity investments have caused the overall market to lag. Over recent months, lower fossil fuel prices, tighter credit markets, project delays, and increased global turbine capacity have all significantly damped the performance of companies pursuing wind-market opportunities over recent months.
In the face of this challenging environment, says Bender, corporations and private investors can look to a range of viable opportunities for greater returns on invested capital. Ducker Worldwide, a growth consulting firm in Troy Michigan, recently conducted a survey of wind energy executives that revealed a range of high-growth technologies and markets.
In China, the average installed turbine size increased from 850 KW in 2005, to 1.4 MW in 2009 (higher in 2010). While turbines in the range of 1.5 MW are expected to remain the “land standard” for the next five years, larger offshore turbines will dominate. While European suppliers have been leader s in the “size race” to date, Asian suppliers are entering the race. Several Chinese manufacturers have produced limited quantities of 3+ MW turbines to date: Golden Wind (3 MW), Sinovel (3 MW), Shanghai Electric (3.6 MW), China Creative Wind Energy (3.6 MW) – some with imported components. Korean suppliers Hyundai Heavy Industry and Doosan have 3+ MW turbines.
While industry analysts (BTM) have recently reported bearing and gearbox supplies are in line with expected production levels, Ducker believes that bearings and gearboxes will become a supply bottleneck again as turbine sizes increase. Chinese offshore power installations are planned for only 10% of total installed capacity through 2020, but larger offshore installations in India – and particularly the U.K. – will test the limits of bearing and gearbox suppliers for 3 MW and larger turbines. Most respondents report no more than three manufacturers can effectively and reliably supply the large rolled rings, bearings necessary for turbines 5 MW and higher.
Offshore power cables: Demand and supply are aligned for now, but offshore cable manufacturing bottlenecks could form soon after 2015. This is due to demand escalating from Round 3 wind farms in the UK, and the oil and gas industries looking to replace diesel generators with grid or offshore wind power. There is still room for technological improvements. As distance between wind farms and on-shore connections increase, limitations of high-voltage ac cables will emerge.
Offshore installation vessels: It appears that European design firms, working in concert with Chinese and Korean shipbuilders will benefit from the clear need for advanced ships. The Community of European Shipyards Associations and the European Wind Energy Association are committed to creating a European Union development and capital-raising plan focused on the offshore-wind market. To meet future demand for offshore wind turbine installation in European market, Bender says the total investment for new wind-farm installation vessels could be $4 billion from now through 2020. Over the next ten years, the UK alone will install about 6,000 turbines offshore. It is expected that about new 30 vessels will be needed to finish the installation work.
Carbon fiber blades: As turbine size increases and blade length increases geometrically, the relative value of using carbon fiber over fiberglass for weight reduction makes carbon fiber more attractive. The aerospace-grade carbon fiber-reinforced plastics used to make aerospace products has triple the strength, but six to ten times the cost of E-glass. For domestic consumption, Chinese manufacturers tend to use a combination of fiberglass and carbon fiber in blades. Performance is often perceived as less robust when compared with carbon-fiber-only products from foreign producers. Bender believes further automation will be necessary to maximize CFRP penetration.
Direct drive, permanent magnet generators: Proponents say eliminating the gearbox, its lubrication, and maintenance reduces weight, decreases manufacturing and shipping costs (magnets are lighter than the copper coils in turbines with gearboxes), reduces noise, and increases up-time with less maintenance. Gearbox and direct-drive advocates disagree over which solutions provide smoother ac output to the grid – direct drive requires additional power electronics. However, Ducker’s survey of executives suggests the tide is turning toward direct-drive technology.
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