Vestas has reclaimed its spot as the world’s largest supplier of wind turbines, according to FTI Intelligence’s preliminary rankings for the world’s top five wind turbine original equipment manufacturers (OEMs) in 2016.
The firm says the Danish company’s return to No. 1 was driven particularly by increased installations in the U.S. For full-year 2016 globally, Vestas recently reported a wind turbine order intake of 10,494 MW and a service order backlog valued at EUR 10.7 billion.
Chinese supplier Goldwind, which took the top spot for 2015, fell two positions to third place, primarily due to a 24% drop in China’s wind power installations. Spain’s Gamesa moved up one position to No. 4 – largely attributable to its strong presence in India and emerging markets.
GE, taking second place, and Enercon, ranking fifth, took advantage of strong domestic market growth in the U.S. and Germany, respectively, the report says.
Notably, for 2015, FTI’s top-five ranking was as follows: Goldwind, Vestas, GE, Siemens and Gamesa.
FTI Consulting plans to release its full report next month. The firm notes that these preliminary results are subject to change between now and the release date of the actual report. Also, considering their merger is not finalized, Gamesa and Siemens have been ranked separately.
Among other highlights, FTI Intelligence notes that Siemens dropped out of the top five for the first time since 2012, mainly due to its decreased annual installations in both the U.S. and offshore wind sector in 2016. In addition, Nordex returned to the top 10 after its recent acquisition of Acciona’s turbine business.
The report says consolidation continues to occur across the wind value chain. In the past 12 months, large turbine vendors not only snapped up rivals (Siemens/Gamesa, Gamesa/Adwen, Senvion/Kenersys and WEG/Northern Power Systems) to gain new strategic positioning, but also acquired assets upstream in the value chain (GE/LM Wind Power, Senvion/EUROS and Nordex/SSP).
In addition, state-owned Chinese companies were very active in the overseas market and acquired renewable assets around the world (SPIC/PacificHydro and China Three Gorges/Meerwind).
Notably, the firm says, major turbine OEMs continued to launch advanced analytics packages last year. Following GE’s launch of an industrial data and analytics product, Predix Cloud, to the market in August 2015, Vestas and Envision launched Clearsight and Ensight, respectively, in 2016, and the data analytics market is expected to grow significantly.
However, following a record 2015 with 63 GW of installations – the best year ever for the wind industry – 2016 showed a 14% drop in global installations. A slowdown of installations in China is the primary reason for the decrease, according to the report.
“The drop in wind power installations in 2016 has brought the wind industry back to reality, as 2015 was an unusual year due to strong demand in China ahead of a change in feed-in tariffs,” states Feng Zhao, a senior director at FTI Consulting. “The relatively poor performance of Chinese turbine OEMs in 2016 has shown that relying heavily on the home market for growth is not a guarantee for sustainable success.”
In addition, solar photovoltaics replaced wind as the No. 1 non-hydro renewable energy source in 2016 on a global scale, the report says. Due to explosive growth in China, global solar PV installations in 2016 passed 70 GW. In addition, solar PV is emerging as a strong competitor to wind in regard to its cost; it beat out wind in the first and second power auctions in Mexico in 2016. Wind, however, eclipsed solar in renewable tenders launched in Chile and Argentina in 2016. Interestingly, four out of the world’s top 10 wind turbine vendors have already entered the solar industry, says FTI.
“Solar PV not only replaced wind as the most popular renewable energy source in 2016, but also beat wind power in the power auctions launched in Mexico,” explains Aris Karcanias, a senior managing director at FTI Consulting and co-lead of the clean energy practice. “However, we view this as positive news because the competition is certain to create another wave of technology innovation in the wind industry in order to further bring down the [levelized cost of energy] and make renewable energy even more competitive and affordable.”
The “Global Wind Market Update – Demand & Supply 2016” report is authored by members of the FTI-CL energy practice, a cross-practice team o from FTI Consulting and its subsidiary, Compass Lexecon.