OFFERING MEMORANDUM Global Offering of up to ... - Nordex

The Wind Turbine Market
Supply of the global market for wind turbines is dominated by a small number of companies while
demand is highly fragmented on a global, national and regional level. The wind turbine market is a
growth market and has experienced rapid growth at times, particularly during the 1990s. As a result of
extraordinary factors, growth in the United States and Spain, two major wind energy markets, declined
in 2000 due to tax-related issues and unusually lengthy approval processes. In 2001, however, wind
turbine manufacturers expect growth to recover strongly, both in terms of the number of turbines sold
and in terms of revenues.
Key factors driving growth in recent years were continuous improvement in the efficiency of wind
turbines and a trend toward increasingly large and powerful turbines as well as a favorable climate in
terms of tax legislation and environmental laws. As there is a limited number of suppliers of wind
turbines, so the number of outside suppliers of complex components for wind turbines, such as rotor
blades, is also limited. Consolidation has occurred in the area of outside suppliers as well, to such an
extent that the entry into the market or the insolvency of a major outside supplier can have a
noticeable knock-on effect on the price structure of individual manufacturers of wind turbines.
The wind turbine market is closely linked with the market for electricity from renewable sources. In the
past, the share of electricity used in Germany produced from renewable energy sources increased from
approximately 4.6% in 1997 to approximately 6% in 1999, and amounted to approximately 5,528
million kW/h (Elektrizitätswirtschaft, 1999 (2000) vol. 24).
According to a study by BTM Consult ApS 1 dated March 2000, newly installed megawatt capacity
worldwide is expected to grow from 3,922 megawatts in 1999 to 9,175 megawatts in 2004, an increase
of approximately 234%. This study also anticipates that increased cost-efficiency of wind turbines,
taking account of environmental factors, will result in average annual growth of approximately 18.8%
worldwide.
According to a study by the Paris-based International Energy Agency (IEA) (World Energy Outlook
2000), global electricity consumption is expected to increase by approximately 32% in the period
between 2000 and 2010 to approximately 19,989 TWh. According to the provisional figures from the
study by BTM Consult ApS relating to 2000 (which has not yet been published), the production of
electricity from wind power is expected to increase from a forecast level of 40.73 TWh in 2000 to
approximately 392.45 TWh in 2010. A comparison of these two studies suggests that the proportion of
electricity from wind energy will increase from approximately 0.27% in 2000 to approximately 1.96% in
2010.
Market Development from 1997 to 1999 and in 2000
The aggregate megawatt capacity of wind turbines sold worldwide grew from approximately 7,636
megawatts in 1997 to 10,153 megawatts in 1998 and 13,932 megawatts in 1999. This statistic shows
an acceleration in the increase in megawatt capacity sold and reflects the trend toward wind turbines
with increasingly large nominal outputs. Whereas megawatt capacity sold rose by 33% from 1997 to
1998, it increased by 37% from 1998 to 1999.
1 BTM Consult ApS describes itself as an independent consulting firm focusing on renewable energy sources and was formed in 1986 with
its registered office in Denmark. The company’s employees have, in some cases, up to twenty years experience in the wind energy market.
Five years ago, BTM began producing an annual survey of the wind energy market. The sources of BTM’s market data include relevant
professional energy sector journals and estimates by consultants, top employees of wind turbine manufacturing companies and
governmental institutions. The figures used in this document are based on a market study conducted by BTM in March 2000 relating to
1999 and the provisional figures provided by BTM from the market study relating to 2000, which is expected to be published at the
beginning of April 2001.
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