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Top ten wind turbine OEMs to spend €2.3bn on R&D by 2023

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Research and development (R&D) expenses among the world's top ten wind turbine OEMs have more than doubled in the last four years, reaching €1.6bn in 2018. This figure is expected to increase to €2.3bn by 2023, according to the latest Wood Mackenzie Power & Renewables 'Next-Generation Wind Turbine Models' report.

"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."

“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.

Product introductions keep up frenetic pace

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.

"Turbine rotor diameter remains the central product differentiator for turbine OEMs. However, the knock-on impact of blade enlargement requires continued innovation on rotor, tower and drive train technologies in order to bend cost/performance curves. The race to launch a larger turbine than competitors continues, with recent product announcements from SGRE’s SG 5.8-170 surpassing Vestas’ V162-5.6 turbine," added Mr. Barla.

New product development initiatives driven by high volume markets

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 and Enercon. We expect corporate PPA market development to accelerate the adoption of such technology,” said Mr. Barla.

Almost 100 new turbine models to hit the market by 2024

Over 90 new onshore and offshore turbines are expected to be launched within the next five years by the top 10 leading OEMs.

"Mass migration to a product platform development approach will increase the number of new product variants customised to specific wind regimes. Lower product development costs, flexibility in component sourcing, stronger supplier relationships and increased economies of scale will result in a more cost-effective approach to mass customisation. This will address the global procurement needs of developers and asset owners," concluded Mr. Barla.

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