Press Release

Wind Operations & Maintenance (O&M) - Market Driven by Financial Incentives, Subsidies and Component Failure Rates


January 26th, 2012

Global Information Inc. would like to present a new market research report, "Wind Operations & Maintenance Market, 2013 Update - Global Market Size, Share by Component, Competitive Landscape and Key Country Analysis to 2020" by GlobalData.

Operations and Maintenance (O&M) costs contribute to the long term running of wind farms, result in increased returns and increase in turbine availability. These are recurring costs which are necessary for the running of a wind project over its project cycle. O&M costs are decisive for a wind project, constituting 10-15% of the cost of a wind project. Operational costs are costs which occur annually for everyday operation of a wind farm. These costs are fixed and typically involve staff cost, site management, tools and equipment cost and SCADA system costs. Maintenance costs are directly associated with wind turbines. Maintenance costs continue to rise during the life of a project as the turbine gets older due to wear and tear.

The Wind Operations and Maintenance (O&M) Market Grew Over 17% In The Past Five Years

Valued at $2.6 billion in 2006, the global wind operations and maintenance (O&M) market grew at a CAGR of 17.8% to exceed $5 billion in 2011. This market is expected to reach $13.1 billion in 2020 at a CAGR of 9.4%. The market revenues are increasing due to increasing installations backed by financial incentives, capital subsidies and tax rebates. In addition, the market growth is also boosted by component failure rates and ageing wind turbines in operation. The O&M market growth is restrained by a lack of skilled manpower and the cost of logistics.

Installed Capacity for Wind Energy Grew at CAGR of 26.2% Between 2006 and 2011

The installed capacity for wind energy around the globe is expected to increase at a CAGR of 26.2% from 74,107 MW in 2006 to 237,354 MW in 2011 of which 39,151 MW is estimated to have come online in 2011. The global wind power installed capacity will reach 718,052 MW by 2020. The market recovered in 2011 after a 10.9% fall in annual additions in 2010 as major wind markets such as the US, Germany and Spain faced economic problems following the global economic crisis. Wind turbine installations in 2010 amounted to more than $38.3 billion. The industry also provides employment to over 450,000 people worldwide. The exponential growth of the wind energy market is fueled by depleting fossil fuel reserves, the declining cost of wind power generation and a growing sensitivity for the environment supported by financial incentives by various governments across the world. China, the US, Germany, Spain and India are the major wind markets in the world accounting for a 72.3% share of the global cumulative installed capacity in 2011.

While the major countries for wind power - the US, Germany, Spain, France, Italy, India and China  will see a reduction in growth over the forecast period 2011 2020, emerging markets from Asia-Pacific and South and Central America will gain considerable market share. The growing Asia-Pacific wind power market powered by India, China and other emerging countries such as Republic of Korea, Thailand and Philippines will continue to drive the market in the region. Countries such as Argentina, South Africa, Philippines, Ukraine, Brazil, Republic of Korea and Mexico are some of the nascent wind markets which are set to expand rapidly in the forecast period.

China Replaces the US as the Largest Wind Market in 2010

In 2010, China emerged as the largest wind market in the world when it surpassed the US. The main factor that has contributed to this country emerging as a market leader in 2010 is strong government support. The cumulative installed capacity of wind power in China has increased from 2,604 MW in 2006 to 60,307 MW in 2011 at a CAGR of 87.5%. Chinas wind market exceeded growth of 100% between 2006 and 2009, driven by government support in the form of favorable rules and regulations and a speedy approval process. The country added 13.8 GW of installed capacity in 2009, doubling the capacity for the fourth year in a row to 25.9 GW. In 2010, China added 18.8 GW of annual capacity at an annual growth rate of 72.4% and in 2011 the growth in annual growth rate further slipped down to 34.8%. Supportive government policies which include an attractive concessional program and the availability of low cost financing from government banks are critical reasons for the success of the Chinese wind power market. It is expected that China will continue to promote wind power in order to reduce its carbon footprint and increase rural electrification.

The US accounted for 20.3% share of the global wind power market in 2011. Germany was the third largest wind power market in the world (12.1% in 2011 and 13.7% in 2010) followed by Spain (9.4% in 2011). The other major wind power markets include India, the UK, Italy, France, Canada and Portugal.

Offshore Wind To Account for 9% of the Total Wind Power Market by 2020

While offshore wind power installations accounted for 1.6% of the global wind power market in 2010, with an increasing number of countries exploiting offshore wind potential during the forecast period 2011 2020, it is expected that its share will reach 9% by 2020. The offshore wind market is expected to become one of the key market segments of wind power generation during the forecast period. It is being increasingly explored across the world for its high yield due to stronger and more consistent winds compared to onshore with scope to construct massive GW-scale projects. The UK, Germany, the Netherlands, the US and China are the biggest offshore wind power markets in the world with a number of projects currently in planning and under construction.

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Offshore Wind to Account for 19% of the Total Wind O&M Market by 2020

Offshore wind accounts for 6.3% of the total wind O&M market in 2011, but this is expected to increase to 19% by 2020. Offshore wind attracts higher O&M costs in comparison to onshore wind primarily because offshore wind has challenges relating to lower turbine availability, high logistics costs and a lack of skilled manpower. Although onshore wind also faces logistics and manpower issues, the impact of these factors on the offshore segment is higher. It is estimated that revenues from the offshore wind O&M market segment will continue to grow till 2020.

Original Equipment Manufacturers (OEM) Accounted for 72.2% of the Wind O&M market with a share of 72.2% in 2011

With a share of 72.2% in 2011, Original Equipment Manufacturers (OEM) currently dominate the wind O&M market. This share is expected to decrease 5.2% by 2015 as there will be increased competition from Independent Service Providers (ISP) in major wind O&M markets such as Germany, Spain, the UK, the US and China. Vestas, Gamesa, GE Energy, Enercon, Siemens, GoldWind and Sinovel are some of the main OEMs that account for the majority of market share in 2011. Large OEMs such as Vestas, Gamesa, GE and Siemens are signing long term service contracts to negate the impact of ISPs in the wind O&M market. ISPs will continue to gain market share in the post-warranty market as they are accessible, study local conditions well and are cost efficient. By 2015, ISPs will have a 20% share of the total wind O&M market. Wind farm owners (WFO) share in the wind O&M market accounts for 11.7% in 2011 and most of the owners who perform O&M in-house are utilities with vast experience in handling large power projects.

The US Holds over 20% of the Global Wind O&M Market in 2011

With a share of 20.2% in 2011, the US was the largest wind O&M market in the world. This is expected to increase to 23.8% in 2020. Germany is the second largest wind O&M market in the world and accounts for 18.3%, followed by China with a 14.6% share in 2011. China is expected to surpass Germany to emerge as the second largest wind O&M market by 2013 and in 2020 China will account for 18.8% of the global market size. Spain is the second largest wind O&M market in Europe in 2011. The country accounts for 13.9% of the global market share in 2011, followed by the UK which accounts for 6.4% of the global market. The UK will surpass Spain to emerge as the second largest wind O&M market in Europe by 2015 and will account for 11% of the global market in 2020. India accounts for 4.5% of the global market in 2011 and others contribute 22.1%.

About the Report

"Wind Operations & Maintenance (O&M) Market - Global Market Size, Share by Component, Competitive Landscape and Key Country Analysis to 2020" is the latest report from GlobalData, the industry analysis specialists that offer comprehensive information and understanding of the Global Wind O&M market. The research provides an understanding of the technology, key drivers and challenges in the global wind power market. It also provides historical and forecast data to 2020 for installed capacity and power generation. The report details global market size of wind O&M market, market share by company type (Original Equipment Manufacturers, Independent Service Providers and In-house), O&M market share by onshore - offshore wind market and key company analysis. Major countries analyzed in the report include China, the US, Germany, Spain, and India.


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Product Code : 229187