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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 />

79

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