The Europe wind power equipment market is expected to rise at a CAGR of more than 3% during 2020 - 2025. Factors such as rising investments in wind farms and reducing cost of wind energy, are likely to drive the North America wind power equipment market. However, increasing adoption of alternate clean power sources is expected to restraint the market
- Onshore is the largest segment in 2020 and is expected to remain the most important sector in the forecast period. The region heavily depends on the use of the Onshore section as the countries have sparse regions with high-speed winds, which act as the optimal conditions for the wind power generation.
- The German government, coastal states, and transmission system operators (TSOs) have agreed on a joint plan to expand offshore wind development in the North and Baltic Seas and lift the country's offshore installed capacity target to 20 GW by 2030. An increase in the offshore installed capacity is expected to act as an opportunity for the market.
- Germany is expected to be the largest market for the region's wind power equipment market, due to increasing investment in the sector and the highest installed capacity of wind energy in the region.
Key Market Trends
Onshore Segment to Dominate the Market
- Onshore wind power refers to turbines that are located on land and use the wind to generate electricity. The European region is overwhelmingly constituted of the onshore wind farms due to its cheaper cost, sparse land, and high-speed winds that can be found in areas such as Northern Germany.
- New types of onshore turbines are being introduced into the market to increase wind energy efficiency by changing the wind turbine's design. For Example, General Electric Company is expected to manufacture a 5.3 MW turbine with a 153-meter rotor diameter. The manufacturer attributes the increased blade length to a new carbon fiber technology that enables a two-piece blade that can be assembled on-site. The benefit of a two-piece blade is that it can be used at places where the use of a three-piece blade is not feasible. The introduction of new equipment is expected to make the market more viable and aid the growth of the power equipment market.
- A 50-turbine wind farm in Southern Scotland is expected to be up and running by 2023, sustainable energy firm. The project is being constructed by Vattenfall ab and is expected to cost GBP 320 million. Rising investments into the sector are expected to aid the growth in the segment.
- The Russian Federation proposes to increase the share of renewable energy in power generation from under 1% currently to 2.5% by 2024. A unique payment mechanism for new renewable energy capacity in solar, wind, and small hydro projects have been approved, with an assured 12% return on investment. Favorable assured returns are expected to incentivize further invstments thereby, provide for an increase in the growth of the wind power equipment market.
- Onshore installed wind capacity increased by 6.7% from 163171 Megawatt, in 2018 to 174026 Megawatt, in 2019. The installed capacity is expected to further increase in the forecast period due to increasing investments.
- Hence, the onshore wind power equipment market is expected to grow significantly in the forecast period due to increasing investments, tax benefits and new technological advances in the field.
Germany to Dominate the Market
- The installed wind energy capacity in the country increased by 3.36%, from 58,843 megawatt, in 2018 to 60,822 megawatt, in 2019. New wind projects are being installed in the country, which is expected to boost the wind power equipment market.
- In March 2020, Ørsted A/S has opted for Siemens Gamesa Renewable Energy SA as the preferred turbine supplier for two offshore wind power projects in the German North Sea, totalling 1,142MW. At both the 900MW Borkum Riffgrund 3 and the 242 MW Gode Wind 3 sites, Siemens Gamesa is expected to deploy its new SG 11.0-200 DD offshore wind turbine.
- Germany has grown impressively in the wind energy sector in the past decade, primarily due to the government's tax reduction initiative. However, Since the government removed the tax incentive for wind energy, the growth has considerably reduced in the sector with an increase of approximately 1 GW being added, in 2019. However, in 2020, the government is looking to revive the industry through legislative means, and a kind of tax break seems plausible.
- In 2020, GE is investing in developing the Haliade-X, offshore wind turbine, the most powerful offshore wind turbine in the world with a capacity to generate 12 MW. In addition to being the most powerful wind turbine globally, the Haliade-X is also expected to be the most efficient ocean-based wind platform, with a leading capacity factor of 63%. GE's investment in the Haliade-X is expected to help make offshore wind a more cost-effective and competitive source of clean energy.
- Hence, Germany is expected to dominate the Europe wind power equipment market due to the significant scale of investments and a plausible tax incentive for the sector.
The Europe wind power equipment market is moderately fragmented. Some of the key players in this market include Acciona Energia SA, General Electric Company, and Siemens Gamesa Renewable Energy S.A, Vestas Wind Systems A/S, and Senvion S.A.
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