Wind Turbine Market Trends

Market Driver - Government Incentives and Initiatives Supporting Renewable Energy Adoption

Various governments around the world have introduced attractive incentives and policies to promote the use of renewable energy sources like wind power. This has significantly boosted the setting up of new wind farms in recent years. Many countries have set ambitious targets to increase the share of electricity generated from renewable resources as part of their commitments to reduce carbon emissions under the Paris Agreement. Achieving these targets requires massive investments in wind energy projects.

Governments offer lucrative tax incentives, rebates, and financial subsidies for both residential and utility-scale wind turbine installations. This makes wind power projects more viable economically for developers and lowers the per unit cost of energy generated. Overall, the growing policy push and financial assistance to boost renewable energy adoption is a driving factor augmenting investments and installations in the wind turbine market.

Market Driver - Growing Demand for Cost-effective Energy Generation Solutions

Soaring energy consumption worldwide along with rising electricity tariffs has intensified the need for reliable and affordable power sources across both developed and emerging economies. Meanwhile, traditional fossil fuel-based thermal generation is becoming increasingly expensive due to higher input costs and stricter emission norms.

This is propelling governments and large corporate buyers to explore renewable resources like wind that offer long-term electricity price stability along with environmental sustainability. Wind energy, in particular, is gaining popularity due to continual improvements in technology that have made it competitive against conventional power sources on cost.

Renewable costs are declining further with technological progress. Thereby, their price appeal compared to fossil alternatives will increase substantially over the coming decade. This will propel even greater demand for wind and solar installations as preferred choices for utility-level and distributed power generation.

Market Challenge - High Initial Installation and Maintenance Costs

The high initial capital costs associated with installing wind turbines poses a significant challenge for the wind turbine market. Setting up both onshore and offshore wind farms requires massive upfront investments in purchasing and transporting large turbine components, foundations, cables, and substations.

For example, the average cost of installing an onshore wind turbine range between $1-2 million. On the other hand, an offshore turbine can cost upwards of $5 million due to additional expenses related to ocean logistics and infrastructure.

Furthermore, wind turbines have a lifespan of only 15-25 years and require regular scheduled and unscheduled maintenance to operate efficiently. Maintenance activities such as replacing worn components, painting, repairing blades and gearboxes generate substantial operating expenditures over the project lifetime.

The remote offshore locations further increase maintenance costs due to expenses related to vessels, crews and necessary downtime. With competition from relatively cheaper conventional power sources, high capital costs pose a considerable barrier for large scale adoption of wind turbine technology.

Market Opportunity - Expansion of Offshore Wind Turbine Installations

The expansion of offshore wind turbine installations across the world presents a major opportunity for the wind turbine market. Compared to onshore sites, offshore areas experience stronger and more consistent winds, allowing for larger, more productive turbines to be deployed. This translates to higher energy yields and returns on investment.

Many coastal nations are increasingly tapping into their vast offshore potential. They are and setting ambitious renewable targets that promise robust demand for offshore wind turbine projects in the coming decades. For example, countries like China, UK, Germany and others have outlined plans to install thousands of megawatts of offshore capacity through the 2020s and beyond.

Driven by supportive policies, technological advancements, and falling costs of offshore solutions, the global offshore wind turbine market is projected to grow at double digit rates over the next 10 years. Established and new players in the wind turbine market stand to benefit from proliferation of utility-scale offshore wind farms worldwide.