Wind is expected to eclipse 70GW per year of annual installations by 2025, representing a revenue opportunity of more than US$ 510 billion for wind turbine OEMs and their suppliers from CY2017-2025 according to Make’s report Global Wind Power Supply Chain 2017.
Wind OEMs have struggled to truly advance their production processes given the frenetic pace at which next generation turbines are delivered. This market dynamic may be slowing in the near future, though, as the latest generation of +4MW turbines may face permitting issues that are more significant than technology limitations. Nevertheless, the breadth of most turbine portfolios and differences in regional technology requirements will continue to drive mass customisation efforts. The ability to cope with constant change is at the centre of manufacturing 4.0 concepts, and the ability of OEMs to adapt these new concepts will undoubtedly define competitive positioning in the years to come.
The global supply chain is undergoing a period of realignment as the integration activities of CY2016 mergers pick up steam. Turbine OEMs are streamlining their product portfolios and making investments in new production facilities to cope with evolving regional market dynamics. Globally, the central issue for OEMs is how to maximize their global ROIC and still meet the needs of Tier II/III markets around the world.
It has become clear that wind has reached a level of maturity at which it is better served by a increasing number of larger OEMs. This dynamic has shown itself in gearbox and blade manufacturing, and to a lesser extent among turbine OEMs, where another round of consolidation is still required. The result will be a market more closely resembling the combined cycle gas turbine (CCGT ) market, where a handful of global players are able to consistently meet the challenges of a global market demanding high performing wind turbines at a cost that enable wind to compete, incentive free, with fossil fuel generation around the world.