EXECUTIVE SUMMARY: Global Wind Energy Outlook · Global Wind Energy Outlook ... Suzlon GE Sinovel...

Global Wind Energy Outlook

© 2011 Pike Research LLC. All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the express written permission of Pike Research LLC.

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Dexter Gauntlett Industry Analyst

Clint WheelockPresident

EXECUTIVE SUMMARY: Global Wind Energy Outlook Onshore and Offshore Wind Energy Market Opportunities and Challenges, Technology Issues, Key Industry Players, and Global Capacity, Installation Cost, and Production Revenue Forecasts NOTE: This document is a free excerpt of a larger report.

If you are interested in purchasing the full report, please contact Pike Research at [email protected].

Published 3Q 2011



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Section 1 EXECUTIVE SUMMARY

1.1 Global Wind Energy Market Outlook

Throughout the past decade, the wind energy industry has continued to mature. In fact, wind energy now accounts for the majority of the world’s non-hydropower renewable electricity installed capacity. Additionally, though still primarily driven by policy, the costs of wind technology are coming down while costs for conventional fossil fuels are slated to rise over the long-term. Now that wind has reached approximately 20% of total electricity generation in some countries (with occasional peaks as high as 50%) most in the energy industry have come to appreciate it as a mainstream energy technology that is key to:

Meeting rapidly increasing electricity demand around the globe

Reducing carbon emissions

Providing a low cost, clean energy source

Driving economic growth in the 21st century

The market for installed wind turbines surpassed $59 billion in 2010 and is forecast to reach $152 billion by 2017. Pike Research forecasts approximately $820 billion invested in onshore and offshore wind turbines installed between 2011 and 2017. The turbine itself accounts for 65% to 75% of costs for the onshore market and about 30% to 40% of costs in the offshore market. The industry supports an estimated 670,000 jobs worldwide. Moreover, wind energy has reached grid parity in some markets – a trend that will continue around the world.

The financial crisis and the recession had a delayed impact on the wind power market in terms of new installations, given wind power’s approximate 18-month project cycle from feasibility study to electricity production. Wind power experienced strong cumulative growth in 2008 (29%) and 2009 (32%), due to a large volume of projects that had been initiated in late 2006 through 2008. However, 2010 results (22% growth) reflect the impact of the recession on the market.

In Asia Pacific, 2008 through 2010 was a time of robust growth for wind development, led primarily by relentless growth in China. In fact, China’s annual installations totaled 6.3 GW in 2008, 13.6 GW in 2009, and 16.5 GW in 2010, prompted by massive public investment, low-interest loans, and government directives to utilities to increase purchases of non-hydro renewables. The Chinese wind industry evolved from a group of small, domestically focused and government-supported companies in 2005 to having three of the top seven manufacturers globally and installing 46% of global capacity in 2010. India, which in 2006 had more than twice as much cumulative wind capacity installed as China, was eclipsed in 2008. Despite being home to 17 wind turbine manufacturers, India did not enjoy the same level of government support during the slowdown.

For European companies, the period of 2008 through 2010 was marked by growth and/or expansion in new markets, and an increasing eye toward the offshore sector at home. Europe boasts some of the world’s most ambitious carbon reduction targets, most of the world’s top industry innovators, and some of the most generous government subsidies. As a result, the European wind industry was largely able to weather the economic storm – but at a cost. The feed-in tariffs and other generous incentives that caused the rapid



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deployment of renewables in Europe also contributed to individual countries’ fiscal crises; consequently, many deployments have been scaled back or shifted. Led by Germany and Spain, Europe installed 8.8 GW in 2008, 10.4 GW in 2009, and 9.7 GW in 2010, reaffirming the region’s commitment to meet its 20% renewable energy consumption target by 2020, which we expect it to achieve.

In North America, the period of 2008 through 2010 was characterized by rapid growth and equally rapid contraction. Clearly, the financial crisis crippled the U.S. economy and along with it, the wind industry. The full effects were not seen until 2010: While 2008 and 2009 were record years for the region with a respective 8.9 GW and 10.9 GW installed, only 5.8 GW was installed in 2010. The primary cause for the drop was the U.S. market, where growth fell 49% in 2010 (5.1 GW installed) from its peak in 2009 (9.9 GW installed). Canada followed the same pattern, though on a much smaller scale: 504 MW was installed in 2008, 969 MW in 2009, and 690 MW in 2010 fueled by provincial-level renewable portfolio standard (RPS) targets and, in some cases, very generous subsidies in Ontario, home to one-third of the country’s cumulative installed capacity to date.

Among the key factors that will shape the wind market over the next six years are the following:

Wind energy’s price compared to that of natural gas

China’s continued domestic growth and international expansion

Countries’ and states’ ability to follow through on RPS and carbon-reduction targets

Grid infrastructure improvements

Successful installation of larger, more efficient turbines at scale – particularly in the offshore environment

Reduced operation and maintenance costs of wind turbines

Wind industry growth is enabled by the interrelationship between technological innovation, the policy environment, and the capital environment. As a framework for this report, the following table provides a relative rating of each major region’s technology, policy and capital environments.

Table 1.1 Comparing Technology, Policy, and Capital Environments

Segment Technology Environment Policy Environment Capital EnvironmentNorth America ++ + +Asia Pacific + +++ +++Europe +++ ++ ++

Ratings: + (Lagging); ++ (Moderate); +++ (Leading)

(Source: Pike Research)

1.2 Global Wind Power Market Forecasts

Pike Research has developed three scenarios for its global wind industry forecast, estimating capacity, power production revenue, and installation costs on a country-by-country and state-by-state level in the case of offshore wind.



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1. The baseline scenario assumes the status quo in terms of current public policies and technology advances. Pike Research assigns this scenario a 65% probability.

2. The regional austerity & delays scenario illustrates what the world would look like if certain key incentives and targets erode during the next few years under increased fiscal austerity measures. This forecast also reflects uncertainty about expected project cost reductions, available financing, and supply chain/infrastructure development. Pike Research assigns this scenario a 25% probability.

3. The government pullback scenario is the least likely. This scenario starts with the austerity and delays scenario but assumes deeper austerity measures in the face of renewed fiscal crises, further delays, and a bleak outlook for offshore wind beginning in 2014. Pike Research assigns this scenario a 10% probability.

Chart 1.1 Cumulative Wind Power Generation Capacity by Region, Baseline Scenario, World Markets: 2008-2017

-

100,000

200,000

300,000

400,000

500,000

600,000

2008A 2009A 2010A 2011F 2012F 2013F 2014F 2015F 2016F 2017F

Middle East and Africa Onshore Latin America OffshoreLatin America Onshore Asia Pacific OffshoreAsia Pacific Onshore North America OffshoreNorth America Onshore Europe Offshore

(MW

)


1.3 Key Trends and Profiles of Wind Turbine Manufacturers and System Designers

Of the wind turbines installed around the globe in 2010, the top ten wind manufacturers manufactured 79% of them. This figure compares with 80% in 2009 and 88% in 2008, illustrating the rapid growth of new entrants – all from China. Despite the challenging market conditions, this is an exciting time for wind turbine innovation as companies are pushing turbines to sizes never thought practical or economical. Some of the world’s top engineering challenges of the 21st century are taking place in factories longer than football fields. However, much is at stake as companies push limits and take major risks in an increasingly competitive sector.



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Major wind turbine manufacturers and component suppliers were able to cushion decreased sales in the United States and Europe with increased sales in China as the country leapt to become the world’s largest market for wind turbines.

Although there are more than 80 wind turbine manufacturers in China, the country’s “Big Four” – Sinovel, Goldwind, Dongfang Electric Company, and United Power – together supplied 32% of all wind turbines in 2010. During this time, Sinovel overtook GE Wind Energy to become the second largest wind turbine supplier worldwide, and is now less than 1% (350 MW) behind industry leader Vestas. The keys to growth for the Chinese turbine manufacturers have been low-cost manufacturing and China’s 70% domestic content requirement, which existed until 2009. Critics point to poor-quality turbines that are both less efficient and more likely to break down; the country lacks technical quality standards and Chinese manufacturers rely heavily on less precise manual labor for processes typically performed with machines.

Over the past three years, numerous high-level mergers and acquisitions in the wind industry have resulted in more dynamic, vertically integrated companies. While the majority are pure technology plays (AMSC acquired Windtec, The Switch Engineering, Blade Dynamics; GE acquired Converteam, ScanWind; Suzlon acquired 100% of REpower), there is an increasing trend for manufacturers to acquire wind farm development companies (or “downstream integrate”) as a strategy for ensuring the use of their turbines. Siemens, for example, has done just this in the United States with the Cape Wind offshore installation.

Figure 1.1 Global Wind Turbine Market by Manufacturer: 2008-2010

Gamesa

Siemens

United Power

Vestas

Enercon

Suzlon

GESinovel

Goldwind

Dongfang

0

12

3

4

56

7

8

910

11

12

1314

15

16

1718

19

20

2008 2009 2010

Year

Mar

ket

Shar

e (%

)

(Sources: Emerging Energy Research, Make Consulting, and Pike Research)



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Table 1.2 Wind Energy Industry SWOT Analysis

Strengths Opportunities

Technologically proven over past 30 years

No fuel inputs and therefore no fuel costs

Clean, renewable, zero-emission source of electricity and therefore not subject to potential price on carbon

The price for wind energy sold to the grid is declining and has met, or is approaching, ‘grid parity’ in many markets – a trend we expect to continue

Scalable

Can be installed on land or at sea

Lowest cost renewable resource (LCOE)

Larger, more efficient turbines to generate larger amounts of wind at lower cost

Direct drive wind turbines that could potentially reduce O&M costs

Offshore wind

Expansion into China, Latin America, Eastern Europe, and other emerging markets

Pairing with natural gas to address intermittency issue

Unique storage techniques and technologies

A national clean energy standard could be in the making in the United States that would provide increased investor confidence in wind projects

Weaknesses Threats

Intermittent resource (difficult to predict when windwill blow)

Less efficient than fossil fuels

Integration into the grid at scale requires institutional change among utilities and grid operators (and, in many cases, these organizations are not accommodating)

Higher cost than fossil fuels in most markets

Market is driven in large part by policy, making it subject to sudden political changes

Scale-up of wind means increased “Not-in-my-backyard” (NIMBY) issues that need to be dealt with on a case-by-case basis

Lack of long-term policy in the United States for spurring investor confidence

Policy shifts (primarily in the United States) that make wind less economically competitive with fossil fuels could stop the industry dead in its tracks

Double-dip recession and/or return of credit freeze prevents projects from being developed

Offshore wind deemed too difficult or too expensive

Rare earth metals required for direct drive turbines become even more scarce as technology gains acceptance and hits scale, causing delays and driving up costs

Raw material prices soar as economies come out of recession

Natural gas prices stay at historic lows

Public loses concern about carbon emissions,making it more difficult to maintain supportivepolicies and incentives




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Section 8 TABLE OF CONTENTS

Section 1 ...................................................................................................................................................... 1 Executive Summary .................................................................................................................................... 1

1.1 Global Wind Energy Market Outlook .............................................................................................. 1 1.2 Global Wind Power Market Forecasts ............................................................................................ 2 1.3 Key Trends and Profiles of Wind Turbine Manufacturers and System Designers ......................... 3

Section 2 ...................................................................................................................................................... 6 Market Issues .............................................................................................................................................. 6

2.1 Defining the Market & Macro Trends .............................................................................................. 6 2.2 Wind Power Growth during the Financial Crisis and Recession .................................................... 7

2.2.1 Asia Pacific .............................................................................................................................. 8 2.2.2 Europe ..................................................................................................................................... 9 2.2.3 North America .......................................................................................................................... 9

2.3 Wind Power in the Context of All Electricity Sources ................................................................... 10 2.4 Offshore Wind ............................................................................................................................... 11

2.4.1 Better Power Production Capacity Factors ........................................................................... 13 2.5 Industry Growth Drivers ................................................................................................................ 13

2.5.1 Comparing Technological Innovation: Europe Leads, North America Gains, China Joins the Race ..................................................................................................................................... 14

2.5.1.1 Technological Innovation: Europe ................................................................................ 14 2.5.1.2 Technological Innovation: North America ..................................................................... 14 2.5.1.3 Technological Innovation: Asia Pacific ......................................................................... 14

2.5.2 Comparing Policy Environments: China Sets Ambitious Path, Europe Adjusts But Stays on Target, United States Scrambles as States Lead .................................................. 15

2.5.2.1 Policy Environment: Asia Pacific .................................................................................. 15 2.5.2.2 Policy Environment: Europe ......................................................................................... 15 2.5.2.3 Policy Environment: North America .............................................................................. 15

2.5.3 Comparing Capital Environments: China Unfazed, Europe Slows, United States Falters ... 16 2.5.3.1 Capital Environment: Asia Pacific ................................................................................. 16 2.5.3.2 Capital Environment: Europe ........................................................................................ 16 2.5.3.3 Capital Environment: North America ............................................................................ 16

2.6 Increasing Demand for Energy over the Long Term .................................................................... 17 2.7 Cost of Conventional Energy Source Trends ............................................................................... 17

2.7.1 United States ......................................................................................................................... 17 2.7.2 Europe ................................................................................................................................... 18 2.7.3 Asia Pacific and the Rest of the World .................................................................................. 18

2.8 Carbon Emission Reduction ......................................................................................................... 19 2.9 Renewable Energy Targets .......................................................................................................... 19

2.9.1 European Union..................................................................................................................... 20 2.9.2 North America ........................................................................................................................ 21 2.9.3 Asia Pacific ............................................................................................................................ 22

2.10 Incentives and Subsidies .............................................................................................................. 22 2.10.1 North America ........................................................................................................................ 22 2.10.2 Europe ................................................................................................................................... 23 2.10.3 Asia Pacific ............................................................................................................................ 24

2.11 Job Creation ................................................................................................................................. 24 2.12 Implementation Issues.................................................................................................................. 26

2.12.1 Grid Integration ...................................................................................................................... 26



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2.12.2 United States ......................................................................................................................... 26 2.12.3 China ..................................................................................................................................... 26 2.12.4 Europe ................................................................................................................................... 27

2.13 Overcoming Intermittency and Institutional Barriers .................................................................... 28 2.14 Land Use Impacts ......................................................................................................................... 29

2.14.1 Less Land Use Impact than Solar ......................................................................................... 30 2.15 Permitting Delays ......................................................................................................................... 31 2.16 Wind Power Cost Competitive With Fossil Fuels? ....................................................................... 32

2.16.1 Net Installation Cost of Onshore Wind Power ....................................................................... 34 2.16.2 Turbine costs ......................................................................................................................... 34 2.16.3 Balance of System Costs ...................................................................................................... 34 2.16.4 Operations and Maintenance Costs ...................................................................................... 35 2.16.5 Refurbishment Costs ............................................................................................................. 37 2.16.6 Net Cost of Offshore Wind Power ......................................................................................... 37 2.16.7 Financing ............................................................................................................................... 38

Section 3 .................................................................................................................................................... 40 Technology Issues .................................................................................................................................... 40

3.1 Wind Turbine Basics ..................................................................................................................... 40 3.1.1 Towers ................................................................................................................................... 40 3.1.2 Nacelles and Interior Components ........................................................................................ 40 3.1.3 Gearboxes and Generators ................................................................................................... 42 3.1.4 Rotors – Blades and Hub ...................................................................................................... 44 3.1.5 Wind Turbine Raw Materials ................................................................................................. 44

3.1.5.1 Rare Earth Metals ......................................................................................................... 45 3.1.6 Types ..................................................................................................................................... 45

3.1.6.1 Horizontal versus Vertical Axis ..................................................................................... 45 3.1.6.2 Upwind Versus Downwind ............................................................................................ 46 3.1.6.3 Three Blades versus Two Blades ................................................................................. 46

3.2 Efficiency ...................................................................................................................................... 46 3.3 Reliability ...................................................................................................................................... 47 3.4 Scalability ..................................................................................................................................... 47 3.5 Availability ..................................................................................................................................... 47 3.6 Technology Trends ....................................................................................................................... 48

3.6.1 Technology Trend: Innovation in Component Design & Reliability ....................................... 48 3.6.2 Technology Trend: Direct Drive Gaining Versus Traditional Geared Turbine ...................... 48 3.6.3 Technology Trend: Self-Erecting Towers & On-Site Manufacturing ..................................... 49 3.6.4 Technology Trend: Increasing Turbine Capacities to Increase Economies of Scale ............ 49 3.6.5 Technology Trend: Wind Energy Storage ............................................................................. 50 3.6.6 Technology Trend: Wind Forecasting Improvements ........................................................... 51

Section 4 .................................................................................................................................................... 52 Market Forecasts ....................................................................................................................................... 52

4.1 Global Renewable Energy Generation Trends ............................................................................ 52 4.2 Wind Energy Market Forecasts: Three Scenarios ....................................................................... 54

4.2.1 Scenario 1: Baseline Forecast ............................................................................................. 54 4.2.2 Scenario 2: Regional Austerity & Delays Forecast .............................................................. 57 4.2.3 Scenario 3: Government Pullback Forecast ......................................................................... 59

4.3 Regional Forecasts ....................................................................................................................... 62 4.3.1 North America ........................................................................................................................ 62

4.3.1.1 United States ................................................................................................................ 62 4.3.1.2 Canada ......................................................................................................................... 63

4.3.2 Latin America ......................................................................................................................... 63 4.3.2.1 Brazil ............................................................................................................................. 64 4.3.2.2 Mexico........................................................................................................................... 64



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4.3.3 Europe ................................................................................................................................... 64 4.3.3.1 Germany ....................................................................................................................... 65 4.3.3.2 Spain ............................................................................................................................. 66 4.3.3.3 Italy ............................................................................................................................... 66 4.3.3.4 France ........................................................................................................................... 66 4.3.3.5 United Kingdom ............................................................................................................ 66 4.3.3.6 Portugal ........................................................................................................................ 67 4.3.3.7 Netherlands .................................................................................................................. 67 4.3.3.8 Denmark ....................................................................................................................... 67 4.3.3.9 Romania ....................................................................................................................... 67 4.3.3.10 Turkey ........................................................................................................................... 68 4.3.3.11 Sweden ......................................................................................................................... 68 4.3.3.12 Norway .......................................................................................................................... 68 4.3.3.13 Ireland ........................................................................................................................... 68 4.3.3.14 Finland .......................................................................................................................... 68

4.3.4 Asia Pacific ............................................................................................................................ 69 4.3.4.1 China ............................................................................................................................. 69 4.3.4.2 India .............................................................................................................................. 70 4.3.4.3 Japan ............................................................................................................................ 70 4.3.4.4 Australia ........................................................................................................................ 70 4.3.4.5 South Korea .................................................................................................................. 70

4.3.5 Africa and Middle East .......................................................................................................... 71 Section 5 .................................................................................................................................................... 72 Key Industry Trends and Company Profiles .......................................................................................... 72

5.1 Trends among Turbine Manufacturers, Component Suppliers, and Design Service Providers .. 72 5.1.1 Companies’ Global Footprint Cushions Regional Economic Troubles ................................. 72 5.1.2 Chinese Turbine Manufacturers Leap Ahead and Abroad Amid Criticism ........................... 72 5.1.3 Consolidation Leads to More Vertically Integrated Companies ............................................ 72

5.2 Key Profiles .................................................................................................................................. 73 5.2.1 Wind Turbine Manufacturers and System Designers ............................................................ 73

5.2.1.1 ACCIONA Energia ........................................................................................................ 74 5.2.1.2 Enercon ........................................................................................................................ 74 5.2.1.3 Gamesa ........................................................................................................................ 74 5.2.1.4 GE Wind Energy ........................................................................................................... 75 5.2.1.5 Mitsubishi Heavy Industries .......................................................................................... 75 5.2.1.6 Nordex .......................................................................................................................... 76 5.2.1.7 Suzlon Energy .............................................................................................................. 76 5.2.1.8 REpower Systems AG .................................................................................................. 77 5.2.1.9 Siemens AG .................................................................................................................. 77 5.2.1.10 Vestas ........................................................................................................................... 78 5.2.1.11 Sinovel Wind Group ...................................................................................................... 79 5.2.1.12 Goldwind Science & Technology Co. Ltd ..................................................................... 79 5.2.1.13 Dongfang Electric Corporation Limited ......................................................................... 79 5.2.1.14 American Superconductor (AMSC) .............................................................................. 80 5.2.1.15 Clipper Windpower ....................................................................................................... 80 5.2.1.16 Nordic Windpower ........................................................................................................ 81

5.2.2 Turbine Component Manufacturers....................................................................................... 81 5.2.2.1 Bosch Rexroth .............................................................................................................. 81 5.2.2.2 LM Wind Power ............................................................................................................ 82

Section 6 .................................................................................................................................................... 83 Company Directory ................................................................................................................................... 83 Section 7 .................................................................................................................................................... 86 Acronym and Abbreviation List ............................................................................................................... 86



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Section 8 .................................................................................................................................................... 88 Table of Contents ...................................................................................................................................... 88 Section 9 .................................................................................................................................................... 92 Table of Charts and Figures..................................................................................................................... 92 Section 10 .................................................................................................................................................. 94 Scope of Study .......................................................................................................................................... 94 Sources and Methodology ....................................................................................................................... 94 Notes .......................................................................................................................................................... 95



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Section 9 TABLE OF CHARTS AND FIGURES

Chart 1.1 Cumulative Wind Power Generation Capacity by Region, Baseline Scenario, World Markets: 2008-2017 ..................................................................................................... 3 Chart 2.1 Annual Wind Power Capacity Additions, World Markets: 2008-2010 .................................... 8 Chart 4.1 Cumulative Wind Power Generation Capacity by Scenario, World Markets: 2008-2017 .... 55 Chart 4.2 Annual Wind Power Capacity Additions by Scenario, World Markets: 2009-2017 .............. 55 Chart 4.3 Cumulative Wind Power Generation Capacity by Region, Baseline Scenario, World Markets: 2008-2017 ................................................................................................... 56 Chart 4.4 Annual Wind Power Generation Capacity Additions by Region, Baseline Scenario, World Markets: 2009-2017 ................................................................................................... 57 Chart 4.5 Cumulative Wind Power Generation Capacity by Region, Austerity & Delays Scenario, World Markets: 2008-2017 ................................................................................... 58 Chart 4.6 Annual Wind Power Generation Capacity Additions by Region, Regional Austerity & Delays Scenario: 2009-2017 ................................................................................................ 59 Chart 4.7 Cumulative Wind Power Generation Capacity by Region, Government Pullback Scenario, World Markets: 2008-2017 ................................................................................... 60 Chart 4.8 Annual Wind Power Generation Capacity Additions by Region, Government Pullback Scenario, World Markets: 2009-2017 .................................................................... 61 Chart 4.9 Cumulative Wind Power Generation Capacity, Baseline Scenario, North America: 2008-2017 ............................................................................................................................ 62 Chart 4.10 Cumulative Wind Power Generation Capacity, Baseline Scenario, Latin America: 2008-2017 ............................................................................................................................ 64 Chart 4.11 Cumulative Wind Power Generation Capacity, Baseline Scenario, Top Eight European Countries: 2008-2017 .......................................................................................... 65 Chart 4.12 Cumulative Power Generation Capacity, Top Four Asia Pacific Countries: 2008-2015 ...... 69 Chart 4.13 Cumulative Power Generation Capacity, Middle East and Africa: 2008-2017 ..................... 71 Figure 1.1 Global Wind Turbine Market by Manufacturer: 2008-2010 .................................................... 4 Figure 2.1 Wind Energy Market Definition ............................................................................................... 7 Figure 2.2 U.S. Annual Power Capacity Additions by Percentage ........................................................ 11 Figure 2.3 European Offshore Wind Projects, in MW: June 2010 ........................................................ 12 Figure 2.4 World Net Electricity Generation by Fuel: 2007-2035 .......................................................... 17 Figure 2.5 Share of Consumption of Energy from Renewable Sources, Select European Cities: 2005, 2020 ........................................................................................................................... 20 Figure 2.6 Renewable Portfolio Standards, Goals, United States ........................................................ 21 Figure 2.7 Summary of European Government Support Mechanisms ................................................. 23 Figure 2.8 China’s Regional Fixed Wind Energy Prices........................................................................ 24 Figure 2.9 Current Online Wind-Related Manufacturing Facilities in the United States ....................... 25 Figure 2.10 Comparisons of Line Losses between AC and DC Transmission Cables ........................... 28 Figure 2.11 Land Conversion from Agriculture: Wind versus Concentrated Solar Energy ..................... 30 Figure 2.12 Energy Projects Currently Being “Stalled, Stopped or Killed” .............................................. 31 Figure 2.13 Comparing the Price of Wind and Natural Gas, U.S. Market: 2003-2009 ........................... 32 Figure 2.14 NREL Ranking of Overnight Capital Costs for Power Plants ............................................... 33 Figure 2.15 Cost Elements of Capital Investment in New Wind Projects (Europe) ................................ 34 Figure 2.16 Comparisons of Operations and Maintenance Costs per MWh of Generation .................... 35 Figure 2.17 Types of Repairs for Onshore Wind Turbines (2.5 kW to 1.5 MW), 2008 ........................... 36 Figure 2.18 Cost of Wind Turbine Components ...................................................................................... 37 Figure 2.19 Prospective Impact of Innovations in Onshore Wind Turbines on Cost/kWh ...................... 38



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Figure 3.1 Diagram of a Typical Nacelle ............................................................................................... 42 Figure 3.2 Growth in Rotor Diameter and Turbine Capacity ................................................................. 44 Figure 3.3 Cost Rationale for Offshore Wind ........................................................................................ 50 Figure 4.1 Forecasted Energy Use by Fuel Type Through 2035 .......................................................... 52 Figure 4.2 EIA Forecasts of Net Electricity Generation Fuels by 2035 ................................................. 53 Figure 4.3 Cumulative Installed Capacity by Region and Technology: 2009 ........................................ 53 Figure 5.1 Global Annual Wind Turbine Market Share by Manufacturer: 2008-2010 ........................... 73 Table 1.1 Comparing Technology, Policy, and Capital Environments ................................................... 2 Table 1.2 Wind Energy Industry SWOT Analysis ................................................................................... 5 Table 2.1 Offshore Wind SWOT Analysis ............................................................................................ 12 Table 2.2 Comparing Technology, Policy, and Capital Environments ................................................. 13 Table 2.3 Wind as a Percentage of Electricity Generation, Top Countries .......................................... 29



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Section 10 SCOPE OF STUDY

Pike Research has prepared this report to provide participants in the wind power market (including utilities; wind turbine manufacturers; transmission, tower, foundation, crane, and vessel vendors; installation and service providers; banks and financial institutions; and other balance of system component manufacturers) with a study of the market potential for wind power products and services. The report examines proposed and currently operating projects globally, analyzes the current status of this emerging industry, and identifies major demand drivers. Key industry players operating within the competitive landscape are also discussed, with a special emphasis on turbine manufacturers and component suppliers.

The report’s purpose is not to provide an exhaustive technical assessment of all the technologies related to wind power market. Rather, it aims to offer a strategic examination of key policies, significant market drivers, and emerging concerns over sufficient available financing. The study also provides granular market forecasts of future growth for both onshore and offshore markets. Pike Research looks at capacity, installation costs, and power production revenue. In addition, three different scenarios are provided (baseline, regional austerity & delays, and government pullback) on a country-by-country and regional basis.

Pike Research strives to identify and examine new market segments to aid readers in the development of their business models. All major global regions are included and the forecast period extends through 2017. Pike Research considers factors such as the current economic recession, current costs of deployment, and likely regulatory barriers and opportunities over the next six years. Thus, unlike forecasts of wind energy provided by other organizations, this report assesses market opportunities through a realistic view of what might be possible by 2017.

SOURCES AND METHODOLOGY

Pike Research’s industry analysts utilize a variety of research sources in preparing Research Reports. The key component of Pike Research’s analysis is primary research gained from phone and in-person interviews with industry leaders including executives, engineers, and marketing professionals. Analysts are diligent in ensuring that they speak with representatives from every part of the value chain, including but not limited to technology companies, utilities and other service providers, industry associations, government agencies, and the investment community.

Additional analysis includes secondary research conducted by Pike Research’s analysts and the firm’s staff of research assistants. Where applicable, all secondary research sources are appropriately cited within this report.

These primary and secondary research sources, combined with the analyst’s industry expertise, are synthesized into the qualitative and quantitative analysis presented in Pike Research’s reports. Great care is taken in making sure that all analysis is well-supported by facts, but where the facts are unknown and assumptions must be made, analysts document their assumptions and are prepared to explain their methodology, both within the body of a report and in direct conversations with clients.

Pike Research is an independent market research firm whose goal is to present an objective, unbiased view of market opportunities within its coverage areas. The firm is not beholden to any special interests and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech markets.



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NOTES

CAGR refers to compound average annual growth rate, using the formula:

CAGR = (End Year Value ÷ Start Year Value)(1/steps) – 1.

CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer years are given, the CAGR is for the range presented. Where relevant, CAGRs for shorter timeframes may be given as well.

Figures are based on the best estimates available at the time of calculation. Annual revenues, shipments, and sales are based on end-of-year figures unless otherwise noted. All values are expressed in year 2011 U.S. dollars unless otherwise noted. Percentages may not add up to 100 due to rounding.



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Published 3Q 2011

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This publication is provided by Pike Research LLC (“Pike”). This publication may be used only as expressly permitted by license from Pike and may not otherwise be reproduced, recorded, photocopied, distributed, displayed, modified, extracted, accessed or used without the express written permission of Pike. Notwithstanding the foregoing, Pike makes no claim to any Government data and other data obtained from public sources found in this publication (whether or not the owners of such data are noted in this publication). If you do not have a license from Pike covering this publication, please refrain from accessing or using this publication. Please contact Pike to obtain a license to this publication.

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