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Top Turbine Makers to Spend $2.6bln on R&D

July 25, 2019

Image: Wood Mackenzie

Research and development (R&D) expenses among the world's top ten wind turbine manufacturers are expected to exceed $2.6 billion by 2023.

The  R&D expenses more than doubled in the last four years, reaching $1.8m in 2018, as demand grows for ever-bigger on- and offshore models, according to the latest research from Wood Mackenzie Power & Renewables.

The analyst said that over 90 new onshore and offshore turbines are expected to be launched within the next five years by the top 10 leading manufacturers.

"Turbine OEMs have accelerated R&D investments in next-generation turbine platforms, battling against new unit sales margin compression and the market’s need to further reduce wind energy’s Levelized Cost of Electricity (LCOE). Turbine technology investments are central to lowering LCOE below the €15-20/MWh mark and mitigating developer/off-taker increased exposure to merchant power prices," said the report.

“Offshore wind turbine sizes are expected to sit at around 20MW by 2030. The cost of technology, balance of plant equipment and installation of vessels to handle such large components will play a crucial role in this increase. Turbine OEMs must work in tandem with the supply chain to ensure these technologies can be developed and deployed cost-effectively,” said Shashi Barla, Wood Mackenzie Power & Renewables Principal Analyst.

Wind turbine OEMs are expected to continue their frantic pace of new product introductions, including 7-8MW onshore turbines with 200+m rotors expected to be available by 2025 and 20+MW offshore turbines with 280+m rotors possible before 2030.

China, India, and the U.S. are expected to lead the market through 2028.

“Ultra-low wind IEC IV class wind turbines, within the 3.XMW class, are becoming mainstream platforms in China. New transmission lines in high-wind provinces Inner Mongolia and Xinjiang are alleviating grid congestion, therefore enabling new wind projects to proceed. OEMs will deploy the up-rated IEC class turbines in these provinces.

“There’s strong interest from western OEMs in India as domestic OEMs face challenges. Most OEMs are expected to migrate to the 3.0MW configuration with 145-155m rotors within the next 12 months.

“Scandinavian markets have been early adopters of the latest generation wind turbine technologies. Within the region, Finland was the first country to test the latest generation technologies from Vestas, Nordex (NDX1.HA) and Enercon. We expect corporate PPA market development to accelerate the adoption of such technology,” said Barla.

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