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WIND POWER INDUSTRY<br />
The wind power industry had another outstanding year thanks<br />
to record installations. Most of the top turbine manufacturers<br />
broke their own annual installation numbers. 99 By early 2016,<br />
manufacturers had full order books, with some receiving record<br />
orders for on- and offshore turbines, presaging momentum for<br />
future years. 100 But rising competition in the global marketplace<br />
and fragmentation in the market required that manufacturers<br />
and developers be flexible to adapt in different environments. 101<br />
Spain’s manufacturers, for instance, survived by exporting<br />
100% of their production. 102 Ongoing technology improvements<br />
that are increasing capacity factors (such as custom turbine<br />
configurations), as well as economies of scale and financing<br />
innovations, continued to drive down prices, making onshore<br />
wind power directly competitive with fossil fuels in an increasing<br />
number of locations. 103<br />
Costs vary widely according to wind resource, regulatory and<br />
fiscal framework, the cost of capital and other local influences. 104<br />
In 2015, the levelised cost of electricity (LCOE) from onshore<br />
wind continued to fall, while the LCOE for new fossil generation<br />
increased. 105 Wind was the most cost-effective option for new<br />
grid-based power during 2015 in many markets – including<br />
Canada, Mexico, New Zealand, South Africa, Turkey, and<br />
parts of Australia, China and the United States. 106 In late 2015,<br />
Morocco secured new record-low tender bids – averaging<br />
USD 25–30 per MWh – for wind capacity that is projected to be<br />
in operation between 2017 and 2020. 107 Although offshore wind<br />
remains significantly more expensive, the LCOE for offshore wind<br />
generation also declined further in 2015. 108<br />
As the amount of wind output and its share of total generation have<br />
increased, so have grid-related challenges in several countries.<br />
Challenges for wind power – both onshore and offshore – include<br />
lack of transmission infrastructure, delays in grid connection, the<br />
need to reroute electricity through neighbouring countries, lack<br />
of public acceptance, and curtailment where regulations and<br />
current management systems make it difficult to integrate large<br />
amounts of wind energy and other variable renewables. 109<br />
Curtailment in China cost the country’s industry an estimated<br />
USD 2.77 billion (RMB 18 billion) in 2015. 110 To reduce curtailment,<br />
China’s government has urged north-western regions to attract<br />
more energy-intensive industries and to use wind power for<br />
heating (with the added benefit that it can displace coal), among<br />
other options; new transmission capacity is under construction,<br />
and new pumped storage facilities are being planned. 111 In the<br />
United States, curtailment is down dramatically in Texas following<br />
the completion of new transmission lines. 112 Across the globe in<br />
2015, projects were in planning stages or under way in every region<br />
to strengthen and expand transmission capacity to efficiently<br />
move wind-generated electricity to where it is needed. 113<br />
Most wind turbine manufacturing takes place in China, the EU<br />
and the United States, and the majority is concentrated among<br />
relatively few players. 114 In 2015, by some estimates, Goldwind<br />
(China) surpassed Vestas (Denmark) to become the world’s<br />
largest supplier of wind turbines, marking the first time that a<br />
Chinese company has held this spot. 115 Almost all of Goldwind’s<br />
recent growth (and that of other Chinese companies) has<br />
occurred at home, although Chinese companies are increasingly<br />
active in new markets. 116 Long-term leader Vestas ranked second,<br />
followed by US-based GE, which climbed one position due in part<br />
to a strong US market and to its acquisition of Alstom (France). 117<br />
Siemens (Germany) dropped two positions to fourth (but ranked<br />
first in the offshore market), and Gamesa (Spain) was up three<br />
positions to rank fifth, followed by Enercon (Germany). 118 Others<br />
in the top 10 were all Chinese companies: United Power, Ming<br />
Yang, Envision and CSIC Haizhuang. 119 (p See Figure 25.) Suzlon<br />
(India) dropped out of the top 10 due to the sale of subsidiary<br />
Senvion (Germany) in 2015. 120<br />
The world’s top 10 turbine manufacturers captured nearly 69% of<br />
the 2015 market. 121 However, components are supplied from many<br />
countries: blade manufacturing, for example, has shifted from<br />
Europe to North America, South and East Asia and, most recently,<br />
Latin America, to be closer to new markets. 122 In Africa, major<br />
manufacturers are considering new facilities in Egypt, which has<br />
set its sights on becoming a regional manufacturing hub. 123<br />
Increasing demand for turbines and related technologies led to<br />
the construction of new factories in 2015 and plans for further<br />
development. In Europe, Vestas announced plans to begin<br />
producing 80-metre (260-foot) blades for offshore use at its new<br />
factory on the Isle of Wight (UK), and Siemens (Germany) said<br />
it would construct a new plant for offshore components – its<br />
largest German facility to be built in several years. 124 Elsewhere,<br />
major manufacturers have scrambled to meet local content<br />
requirements, adding capacity to overcome shortages in<br />
components. 125 For example, several companies announced<br />
plans for manufacturing or service plants in Brazil to focus on the<br />
local market, and, across the Atlantic, manufacturers are building<br />
facilities to provide turbines to meet local content requirements<br />
in Egypt and Morocco. 126<br />
The year saw a surge in consolidation among turbine<br />
manufacturers, developers, data and service companies. 127 For<br />
example, GE acquired Alstom’s power generation business,<br />
gaining a foothold in Europe – including the offshore market –<br />
and becoming a leader in the Brazilian market. 128 In early 2016,<br />
Nordex (Germany) acquired Acciona Windpower (Spain), which<br />
focuses on large-scale wind farms and has production plants in<br />
Brazil, Spain and the United States, with one under construction<br />
in India. 129 Vestas acquired servicing firm UpWind Solutions<br />
(United States) to expand its North American service operations,<br />
as well as German service provider Availon; and EDF Renewable<br />
Energy purchased OwnEnergy (United States) to move into the<br />
community wind market. 130 Investment firm Centerbridge Partners<br />
(United States) completed its acquisition of manufacturer Senvion<br />
from Suzlon, and asset manager Swiss Energy bought Spanish<br />
turbine manufacturer MTOI. 131 In late 2015, Gamesa acquired<br />
a 50% stake in NEM Solutions (Spain/United States), which<br />
leverages data mining to optimise equipment performance. 132<br />
Challenges are mounting for companies that only manufacture<br />
turbines; remaining pure wind turbine manufacturers (that are<br />
not part of large conglomerates) include Enercon, Nordex and<br />
Vestas. 133<br />
Projects also changed hands – particularly in the United States<br />
and Europe – purchased by companies in the same region or<br />
based in Asia and the Middle East. 134 In the United States, many<br />
utilities moved to acquire more renewable energy projects to<br />
satisfy demand from key corporate customers; an estimated<br />
3.7 GW of US wind project capacity was acquired in 2015. 135 Other<br />
players moved into wind projects to expand their foothold into<br />
02<br />
RENEWABLES 2016 · GLOBAL STATUS REPORT<br />
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