Global Outlook of the Wind Energy Market: Current Status and Future Direction

Global Outlook of the Wind Energy Market: Current Status and Future Direction

Georgina Benedetti, Industry AnalystNicolas Escasany, Research Associate

Energy & Power Systems February 2, 2011

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Today’s Presenters

Georgina Benedetti,

Industry AnalystFrost & Sullivan

Nicolas Escasany,

Research AssociateFrost & Sullivan

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Focus Points

• Overview of the Wind Power Markets

• Wind Power Market Drivers and Restraints

• Wind Power Market Status and Forecasts

• Ranking of Major Participants

• Market Trends Analysis

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Market Overview

• The global wind power market has experienced tremendous growth during the last three years.

• The market has been driven by government concerns about energy security and independence, rising

energy prices; volatility of fuel costs; and government incentives on renewable energy.

• Revenues declined in 2010 as a consequence of the lower demand and the reduction of wind turbine

prices due to the global economic crisis.

• Installed capacity reached 194 GW by the end of 2010.

• APAC is projected to become the main location for new wind power installation, increasing almost five

times their installed capacity by the end of the forecast period.

• Wind turbine prices dropped 16.1% as compared to peak values in 2008, primarily due to the reduced

demand caused by the global economic downturn.

• Major wind turbine suppliers: Vestas, Sinovel, and Enercon. Together they accounted for 37.0% of the

total market in 2010.

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Market Drivers and Restraints

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Key Drivers Summary

3. Need to replace aging power

plants provides opportunities for new wind power

installations

1. Government Incentives and

Subsidies Promote Wind Power Market

2. Need for Security and

Independence Stimulates Greater

Investments in Wind Power

Source: Frost & Sullivan analysisSource: Frost & Sullivan analysis

Global Wind Power Market: Top Three Market Drivers Ranked in Order of Impact (North America), 2011-2017

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Key Restraints Summary

Source: Frost & Sullivan analysisSource: Frost & Sullivan analysis

3. Increasing WTG Prices

Obstructs Wind Industry Growth

1. Lack of Transmission

Line Infrastructure

Threatens Wind Energy Growth

2. Intermittency and

Inconsistency of Wind Reduces the Demand for Wind Turbines

Global Wind Power Market: Top Three Market Restraints Ranked in Order of Impact (North America), 2011-2017

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Market Status and Forecast

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Market Status and Forecast

Wind Power Market: Total Installed Capacity Forecasts (World), 2010-2017

Wind Power Market: Revenue Forecast (World), 2010-2017

CAGR 16.7%CAGR 16.7%

Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan

CAGR 13.7%CAGR 13.7%

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Wind Power Market: Total Installed Capacity by Region (World), 2010

NORTH AMERICA

EUROPEAPAC

ROW

• Germany is Europe’s largest wind energy market, both in terms of total installed capacity and in new installations.

• Spain was the world’s fourth largest wind energy market, with more than 20,500 MW of total installed capacity.

• The United Kingdom is the global leader in terms of offshore wind installations.

• Brazil represents about 30% of the ROW market.

• Mexico: 150 MW installed in 2010. more than 700 MW are under construction.

• The majority of the wind capacity in Africa and the Middle East is located in Egypt

• China was the largest market for new wind turbine installations in 2010.

• The wind market in India is also rapidly increasing.

• By the end of 2010, there was 1,769 MW of wind capacity installed in Australia.

• Demand for wind power market has decreased in 2010 due to the economic crisis and lower fuel and energy prices.

• In 2010, only 5.6 GW of wind capacity is expected to be installed in the U.S, representing a decrease in 4.3 GW over 2009.

Market Status and Forecast (Cont.)

Note: All figures are rounded; the base year is 2010.Source: Frost & Sullivan analysis.

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Ranking of Major Participants

Wind Power Market: Ranking of Major Participants Based on Installations (World), 2010

Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan analysis.

GE Energy

Vestas Wind Systems A/S

Siemens Wind Power

ENERCON GmbH

Gamesa


Dongfang

Sinovel Wind Group Co.,

Ltd

Goldwind Science &

Technology Co., Ltd.

Gamesa

Suzlon Energy Limited


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Wind Power Market Trends

Wind Power Market Trends

Source: Frost & Sullivan analysis.

Wind Turbine Configuration

• Power Output

• Direct Drive Wind Turbines

Offshore Installations

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Offshore Installations

Wind Power Market: Offshore Installed Capacity by Country (World), 2010


• Offshore installations represented only

1.8% of the total market.

• 95% of the world’s offshore capacity is

located in Europe

• More than 118 MW of offshore capacity

added in 2010 in the APAC region

• The first offshore installations in North

America is expected to come online in

2012.

• Offshore installations represented only

1.8% of the total market.

• 95% of the world’s offshore capacity is

located in Europe

• More than 118 MW of offshore capacity

added in 2010 in the APAC region

• The first offshore installations in North

America is expected to come online in

2012.

Others include: Germany, Finland, Japan, Ireland, Norway, Italy)

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Wind Power Market: Evolution of Average Turbine Size (World), 2000-2010


The average power output has increased from 500 kW in 1996 to about 3 MW in 2010.

Turbine sizes are expected to grow significantly and the capacity of typical offshore wind turbines will be

between 5 MW and 10 MW

Design drivers for wind technology: maximum efficiency, reliability, grid compatibility, noise reduction,

aerodynamic performance, high productivity for low wind speeds, and offshore expansion.

The average power output has increased from 500 kW in 1996 to about 3 MW in 2010.

Turbine sizes are expected to grow significantly and the capacity of typical offshore wind turbines will be

between 5 MW and 10 MW

Design drivers for wind technology: maximum efficiency, reliability, grid compatibility, noise reduction,

aerodynamic performance, high productivity for low wind speeds, and offshore expansion.

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Direct Drive Wind Turbines

• Direct drive wind turbines: up to 10 percent more expensive than traditional geared wind turbines.

• However, O&M cost of direct drive wind turbines is about 30 to 40 percent lower.

• In 2010, between 10% and 15% of the total wind turbines installed were gearless.


Wind Power Market: Main Direct Drive Wind Turbine Generator Manufacturers (World), 2010

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Wind Turbine Capital Cost

• Wind turbines require large initial investment compared to conventional energy technologies.

• In 2010 wind turbine prices dropped 16.1%, as compared to the peak values in 2008.

• It is expected that WTG prices will remain stable during 2011.

• Beyond 2012, prices will slightly increase as the global economy recovers and wind power demand

returns to its previous growth rates.


Wind Power Market: Wind Turbine Capital Cost (World), 2004-2012

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Global Outlook of the Wind Energy Market: Current Status and Future Direction