Europe direct drive wind turbine market is expected to grow at a CAGR of more than 2.69% over the period of 2020-2025. Major factors attributing to the growth include favorable government policies, the increasing investment in wind power projects, and the reduced cost of wind energy. These turbines are lighter and cost-efficient than conventional wind turbines as they do not contain gearbox which reduces its weight and eliminates maintenance problems related to gearbox. The European region is facing the problem of gearbox failure in wind turbines which is expected to increase the demand for gearless wind turbines. The increasing adoption of alternate energy sources, such as gas-based power and solar power, are likely to hinder the market growth.
- 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.
- Out of the total 225 billion kWh generated from renewable in Germany; offshore wind farms generated 19.4 billion KWh in 2019, holding a significant share of 9%. These ongoing developments and the current growth in the offshore wind market justifies their potential in the upcoming future.
Key Market Trends
Offshore Segment to Register Higher Growth
- The installation of wind farms in offshore is becoming lucrative because of the higher wind speed in comparison to on the land. So, offshore wind power generation capacity is higher per the amount of capacity installed.
- The European industry has a 40% share of all wind turbines sold globally and provides the lion's share of Europe's EUR 35 billion renewable exports. Europe leads the world in offshore wind with over 90% of offshore wind farms.
- In 2019, Europe connected 502 new offshore wind turbines to the grid across 10 projects. This brought 3,627 MW of new (gross) additional capacity.
- PMSG technology is more preferable technology over EESG as it is more reliable for offshore related applications and is lighter in weight. The growing size of the wind turbines has helped lower the cost of wind energy, indicating that it is economically competitive with fossil fuel alternatives.
- Europe wants to meet its binding target for a 20% renewable energy share by 2020, EU countries must inevitably accelerate offshore wind development.
- Europe dominated the market with 59.9% of global annual offshore wind energy generation capacity at the end of 2018.
- Moreover, Siemens Gamesa Renewable Energy as of 2019, the company has installed more than 1000 wind turbines in offshore region equipped with direct drive system.
Germany to Dominate the Market
- The installed wind capacity in Germany increased to 60.822 GW in 2019 from 55.58 GW in 2017. The increase in wind capacity has been primarily dominated by the increase in Europe installed capacity.
- According to IRENA, Germany is poised to become Europe's dominant offshore wind market, accounting for more than 50% of onshore and 60% of offshore wind installations by 2050.
- In 2019, the Levelized cost of energy for offshore and onshore wind power had been estimated as USD 0.125/KWh and USD 0.062/KWh respectively.
- Moreover, the various company are investing in Europe through a joint venture or agreement. In 2019, Siemens Gamesa Renewable Energy, the company has installed more than 1000 wind turbines in the offshore region equipped with a direct drive system.
- Out of the total 225 billion kWh generated from renewable in Germany; offshore wind farms generated 19.4 billion KWh in 2019, holding a significant share of 9%. These ongoing developments and the current growth in the offshore wind turbine direct-drive systems business during the forecast period.
The Europe direct drive wind turbine market is moderately fragmented. Some of the key players in this market include Siemens Gamesa Renewable Energy SA, ENERCON GMBH, Leitner AG, Emergya Wind Technologies B.V, ABB Ltd.
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