Direct Drive Wind Turbine Market - Growth, Trends And Forecast (2020 - 2025)
The direct-drive wind turbine market is expected to grow at a CAGR of more than 9.6% due to the rising energy demand coupled with the increasing share of renewables in the power generation mix, regulations on energy efficiency, the growing trend of industrialization and increased urbanization. The major wind power plant operators have started shifting to direct drive systems from the conventional gearbox system due to turbines with direct drive systems are lighter as well cost-efficient than conventional wind turbines as they do not contain gearbox which reduces its weight and eliminates maintenance problems related to gearbox. The advancement in the technology of the direct-drive system solves the problem of gearbox failure which is expected to propel the direct drive wind turbine market during the forecast period. However, the initial capital investment required for wind power plant is slightly on a higher side when compared to the other renewable and non-renewable energy markets. This factor, in turn, is expected to hinder the growth of the market in the coming years.
- Technological improvements such as increased-capacity (1 MW - 3 MW direct drive system) wind turbines, floating wind turbines, 3D printing, have brought the overall cost of offshore wind power to the lowest level and opened up new offshore locations that were previously inaccessible due to lack of investment and technology. These developments are accelerating the adoption of wind power worldwide and hence, these trends are likely to drive the wind turbine direct-drive systems market during the forecast period.
- Moreover, the integration of advanced technology in wind turbines direct drive system will enable advanced condition monitoring and predictive maintenance which result in increased efficiency and reduced operational and maintenance costs, which is likely to create a significant opportunity for the market in the near future.
- Asia-Pacific is the largest as well as the fastest-growing direct drive wind turbine market. According to the global wind energy council (GWEC), Asia-Pacific has the largest installed capacity of wind energy, majorly in China which has 21.2 GW onshore wind power capacity as of 2018.
Key Market Trends
Offshore Segment to Register Higher Growth for Turbine Capacity of 1 MW – 3 MW.
- The global offshore market remained stable in 2018 with 4.49 GW of new additions, almost the same market size as in 2017. The total cumulative offshore installations have reached 23.14 GW, representing a 24% increase in cumulative offshore wind installed capacity over the previous year.
- Globally, the share of offshore installations continues to increase and reached 8% for new installations and 4% of the total installations in 2018. The major offshore platform uses a conventional gearbox or direct drive system of capacity between 1 MW – 3 MW. By 2025, the share of the new installation is expected to exceed 10%, and the total installed based is expected to reach 100 GW major installed with the direct drive system of capacity 1 MW – 3 MW.
- The global demand for wind turbine direct-drive systems market in the offshore sector is increasing at a significant rate. Even though Europe dominated the market with 59.9% of global annual offshore wind energy generation capacity at the end of 2018, Asia-Pacific saw a substantial increase in offshore wind energy deployment, installation of 1.8 GW. By the end of 2018, the installed offshore wind power capacity has risen to 23.140 GW from 18.658 GW at the end of 2017, with a significant fraction of investments coming from the private sector.
- Moreover, various companies are investing on direct drive wind turbine as it require less maintenance. In December 2019, Siemens Gamesa Renewable Energy installed turbine 51 in the British 714 MW East Anglia One project with direct drive system installed in it. As of 2019, the company has installed more than 1000 wind turbines in offshore region equipped with direct drive system. Furthermore, the United States Department of Energy (DOE) selected projects totalling up to USD 8 million to develop next-generation direct drive wind turbine technologies for both land-based tall wind and offshore applications.
- The wind turbine direct-drive systems market is required to be more robust and more efficient and, in turn, are costlier, as the wind speed in offshore regions is higher. Hence, the growth of the offshore wind energy sector is expected to have a significant positive impact on the market during the forecast period.
Asia-Pacific Region to Dominate the Market
- The installed wind capacity in Asia-Pacific increased to 256 GW in 2018 from 231.41 GW in 2017. The increase in wind capacity has been primarily dominated by the increase in China's installed capacity.
- According to IRENA, Asia-Pacific is poised to become the world’s dominant wind market, accounting for more than 50% of onshore and 60% of offshore wind installations by 2050. Asia’s onshore wind capacity is expected to grow from 256 GW in 2018 to over 2,600 GW by 2050.
- Furthermore, owing to the large investments in countries like China and India, and emerging countries like Taiwan the wind sector investments are dominated by the Asia-Pacific region. Chinese manufacturers comprise nearly 95% of the overall wind power market. The government policy and incentives have made China a favorable hotspot for investment. At the beginning of 2017, China announced its plan to invest about USD 360 billion on renewable energy by 2020, turning down the plan of building 85 coal-fired power plants. In 2018, the country accounted for the largest share of about 45% of the new onshore global wind installed capacity.
- Moreover, various company are investing in China through joint venture or agreement. In 2018, Siemens Gamesa reinforced its offshore strategy in China by licensing the 8 MW Direct Drive technology to partner Shanghai Electric. The cost of the project is about USD 4 million.
- In addition, India holds the fourth-largest wind power installed capacity in the world. These projects are majorly spread in the northern, southern, and western parts of the country.The government has set a target of 60GW by 2022, and in order to achieve the target, the number of the project during the next two year are expected to increase drastically.
- This, in turn, is expected to present Asia-Pacific as an excellent business destination for players involved in the wind turbine direct-drive systems business during the forecast period.
The wind turbine direct-drive systems market is moderately fragmented due to many companies operating in the industry. The key players in this market includeABB Ltd., Siemens Gamesa Renewable Energy SA, Rockwell Automation Inc, Bachmann electronic GmbH, Avantis Energy Group, Goldwind Science & Technology Co. Ltd., Emergya Wind Technologies B.V., Northern Power System, Enercon GmbH, M. Torres Olvega Industrial, ReGen Powertech Pvt. Ltd.
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- 1 INTRODUCTION
- 1.1 Scope of the Study
- 1.2 Market Definition
- 1.3 Study Assumptions
- 2 RESEARCH METHODOLOGY
- 3 EXECUTIVE SUMMARY
- 4 MARKET OVERVIEW
- 4.1 Introduction
- 4.2 Installed Capacity Forecast in MW, until 2025
- 4.3 Recent Trends and Developments
- 4.4 Government Policies and Regulations
- 4.5 Investment Opportunities
- 4.6 Market Dynamics
- 4.6.1 Drivers
- 4.6.2 Restraints
- 4.7 Supply Chain Analysis
- 4.8 Porter's Five Forces Analysis
- 4.8.1 Bargaining Power of Suppliers
- 4.8.2 Bargaining Power of Consumers
- 4.8.3 Threat of New Entrants
- 4.8.4 Threat of Substitutes Products and Services
- 4.8.5 Intensity of Competitive Rivalry
- 5 MARKET SEGMENTATION
- 5.1 Capacity
- 5.1.1 Less than 1 MW
- 5.1.2 1 MW - 3 MW
- 5.1.3 Greater than 3 MW
- 5.2 Geography
- 5.2.1 North America
- 5.2.2 Europe
- 5.2.3 Asia-Pacific
- 5.2.4 South America
- 5.2.5 Middle-East and Africa
- 6 COMPETITIVE LANDSCAPE
- 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
- 6.2 Strategies Adopted by Leading Players
- 6.3 Company Profiles
- 6.3.1 ABB Ltd.
- 6.3.2 Siemens Gamesa Renewable Energy SA
- 6.3.3 Rockwell Automation Inc
- 6.3.4 Bachmann electronic GmbH
- 6.3.5 Avantis Energy Group
- 6.3.6 Goldwind Science & Technology Co. Ltd.
- 6.3.7 Emergya Wind Technologies B.V.
- 6.3.8 Northern Power System
- 6.3.9 Enercon GmbH
- 6.3.10 M. Torres Olvega Industrial
- 6.3.11 ReGen Powertech Pvt. Ltd.
- 7 MARKET OPPORTUNITIES AND FUTURE TRENDS