Wind turbines will become even bigger and better in order to maintain a downward trend in the levelised cost of electricity, according to a new report by consultancy Wood Mackenzie Power & Renewables.
The ‘Global Wind Turbine Technology Trends’ report expects further innovation up to 2027 that will reduce the LCOE, while improving reliability and performance.
Wood Mackenzie said the average selling price per MW for turbines has fallen 28% since 2010, while annual energy production per MW has increased by over 50%.
Wood Mackenzie senior analyst and lead author of the report Shashi Barla said: “Rapid technology developments have been a large driver of elevating wind to a competitive source of power generation globally.
“Now that auction systems are driving down power prices worldwide, product and service evolution is paramount. While the shift away from generous incentive mechanisms leads to a short-term market dip, the forecasted growth over the next decade makes the market ripe for innovation.”
Turbine manufacturers are being forced to make large investments in technology innovation to withstand increasing price pressure, the report said.
Companies with global operations, strong financial capabilities and relationships with leading asset owners will harness these commercial advantages to cement market leadership, it added.
Barla said: “We expect the global market share of the top five turbine (manufacturers) to rise to more than 73% come 2027, compared to just 54% in 2016.
“Fierce competition is also leading to shorter product lifecycles, as turbine (manufacturers) introduce new product platforms to increase efficiency and performance.
“The rapid pace of new product introductions will only begin to slow down post-2020. In recent years, new products were released at an accelerated pace, with (manufacturers) embracing an evolutionary strategy that led to the new breed of 4.X MW turbine platforms.
“This left a series of 3.X turbines in their wake with barely a chance to recoup their tooling costs.”
Wood Mackenzie said the US, Latin America and smaller emerging wind markets will transition to 4.X turbines, which were previously expected to be limited to the European market, in the next two years.