A growing disparity between MW growth and the number of turbines deployed will impact component suppliers as price pressure percolates down the supply chain, according to a new report from Wood Mackenzie Power & Renewables.
The report – ‘Global wind turbine supply chain trends’ – said the potential worth of the supply chain is $540bn over the next 10 years.
But, while annual installations are expected to grow to 75GW by 2027 from 53GW in 2018, larger turbines will lead to a decline in the number of individual units installed.
“Pressure to lower the levelised cost of electricity is accelerating technology developments, which is causing a wider proliferation of next-generation 4.X/5.X/6.XMW turbines,” said Wood Mackenzie Power & Renewables senior analyst Shashi Barla.
“As a result, we expect a 20% decline in the total number of turbines deployed, from over 20,000 turbines in 2018 to just over 16,000 by 2027,” he said.
Barla added that the top five turbine manufacturers are also expected to increase market share to 73% by 2027, compared with 54% in 2016.
“It is therefore imperative that component suppliers secure strategic relationships with these winning (turbine manufacturers) to solidify their own future success,” he said.
The report said that India currently stands to benefit as the trade tariff tussle between the US and China intensifies.
It also highlights the logistics challenges for blades and towers as component sizes become longer and taller, respectively.
Wood Mackenzie Power & Renewables expects the industry to circumvent these obstacles with new transportation methods and on-site/closer-to-site manufacturing.
Turbine manufacturers also continue to leverage independent suppliers to out-source component manufacturing, while the component design continues to move inwards, Wood Mackenzie said.
“After exploiting the low-cost footprint advantage in China, Western turbine (manufacturers) are now searching for out-sourcing partnerships with Chinese component suppliers as a way to squeeze costs further,” said Barla.
“Offshore growth in Asian markets will facilitate expansion opportunities for independent blade suppliers, as western markets are primarily served by turbine (manufacturers’) in-house capacity,” he added.
As blade length increases on next generation turbines, carbon fibre utilisation for structural blade support is expected to increase its share of the market from 25% in 2018 to around 57% by 2027, because of its lighter weight, the report said.