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Mainland China and the United States drive a record year for wind turbine ordering activity in 2019
02 March 2020IHS Markit Energy Expert
IHS Markit tracked 63 GW of firm wind turbine contracts globally
in 2019, growing by over 60% compared to the year before. Of this,
42 GW or two-thirds of the total were scored from Mainland China
and the United States where imminent subsidy expiries have sparked
a development rush. Vestas maintained its position as the largest
supplier globally with nearly 13 GW in firm orders scored last
year.
With only a handful of global markets offering stable annual
demand, Western turbine OEMs have sped up both regional and
technology diversification strategies to mitigate supply risk. For
instance, GE, which had been heavily dependent on the United States
for volumes, scored over half of its orders from other markets in
2019. In contrast, Mainland China's market size means there's
plenty to go about for its twenty something local OEMs who retain a
near exclusive focus on the domestic market. Although western
vendors have had limited success in the country, this may change
going forward as the Chinese wind supply chain struggle to keep up
with the sudden spike in demand.
Figure 1: Globally announced wind turbine orders by vendor and
region share, 2019.
Global offshore demand remains bullish with nearly 12 GW ordered
globally in 2019, which doubles if non-firm contracts are included.
The Asia Pacific drove demand with nearly 8 GW in orders placed
from Mainland China alone. Offshore orders from Europe were modest,
however given the current trend of European offshore megaprojects,
contracting activity from the region is expected to remain lumpy.
Prominent European offshore activity in 2019 include Siemens
Gamesa's (SGRE) firm order for the Dutch Hollandse Kust Zuid
project, and GE's preferred supplier agreement for U.K's Dogger
Bank project. The United States has also quickly built up a
multi-gigawatt offshore pipeline despite its modest installed base
of just 30 MW now.
The demand for larger high-yield wind turbines continues to
accelerate globally, more so as competitive auctions lower wind
prices while severely compressing margins on turbine sales. In 2019
the first orders for the latest generation of 5 MW turbines started
trickling in, most of which was limited to Europe, especially the
Scandinavian markets. In total, only five turbine suppliers have
announced turbines sized at 5 MW and above globally, with SGRE
currently offering the largest variant equipped with a 170-meter
rotor.
The size race has further intensified in offshore. In Mainland
China, three local vendors have announced 10 MW turbines in 2019
which brings the total global tally of OEMs capable of supplying
this technology to six. Among Western players, GE landed its maiden
preferred supplier agreement for the 12 MW Halidade-X turbine in
September 2019, quickly building up to nearly 5 GW in commitments
by the end of the year.
IHS Markit closely tracks wind turbine orders globally and
publishes data and key insights in its Global Announced Wind
Turbine Order Tracker report on a half-yearly basis. For more
information on recorded orders, please visit our
global power and renewables page.
Indra Mukherjee is a Global Wind Power Analyst for IHS
Markit.