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The global wind turbine operation and maintenance market size was USD 28.05 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with wind turbine operation and maintenance witnessing a slow demand shock across all regions amid the pandemic. Based on our analysis, this market will exhibit a stagnant growth of 7.65% in 2020. The market is projected to grow from USD 30.21 billion in 2021 to USD 52.74 billion in 2028 at a CAGR of 8.3% in the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Wind turbine operation and maintenance are an essential part of the wind energy industry. These services help to reduce the failure rate and avoid outage time at the time of power blackout. Several components of wind turbines such as gears, sensors, electric systems, control systems, and generators are critical and prone to failure. Sudden breakdown of any equipment in the turbine leads to high downtime and affects productivity, thus the need for effective monitoring and maintenance at regular intervals is increasing. Several governments across the globe are promoting wind energy as an alternative energy source. This is expected to positively influence the market growth in the forthcoming years.
Disruption in Supply Chain Amid COVID-19 Pandemic to Negatively Impact Wind Energy Projects
In numerous countries, renewable energy projects are largely dependent on imports from other nations. Similarly, the wind industry is also reliant on imports of wind equipment from a wide range of countries. Most of the wind raw materials and components in the U.S. are imported from China and Europe. But, owing to the lockdown in many countries, key wind equipment suppliers such as GE, and Xinjiang Goldwin have faced production shutdowns, affecting a large number of projects. Recently, in September 2020, the Maharashtra Electricity Regulatory Commission (MERC) extended the commissioning date of the 76.5 MW wind project by five months due to the outbreak of the COVID-19 pandemic.
In several European countries, only essential employees are permitted to work. This has encouraged wind operators to focus on reactive turbine repairs and reduced scheduled maintenance activities. Several O&M workers have focused on corrective tasks and have postponed preventative maintenance tasks.
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Increasing Power Consumption to Augment Market Growth
Worldwide electricity demand is increasing continuously owing to economic development and population expansion. As the demand increases, countries are enhancing their power capacity by installing new plants or expanding their existing facilities. Due to environmental regulations, numerous companies are using renewable energy sources for power generation and particularly wind and solar power. This is expected to augment market growth.
Growing Investment in Wind Energy to Drive Market Growth
The growing environment protection regulations propel the power generation industry to shift to cleaner and environment-friendly energy resources. Several countries across the globe are focusing on the development of renewable energy power generation to reduce their dependence on conventional sources for power generation. In recent times, it has been observed that investments in wind, solar, and other renewable energy sources are increasing continuously.
Wind energy is one of the major renewable energy sources with the potential to meet many of the energy generation challenges faced by the world. Wind power installation rose to over 650 GW, as around 60 GW of new wind projects were developed across the globe in 2019. Hence, such tremendous development in the wind capacity requires effective monitoring and maintenance at regular intervals. Thus, the growing investment in wind energy is expected to drive the demand for wind turbine operation and maintenance services.
Supportive Government Policies Propelling Growth of the Market
One of the major drivers for the growth of the wind power market is the crucial part played by the government initiatives and policies. In numerous countries such as Germany, the U.K, the U.S., Japan, and China policies such as feed-in tariffs, tax credits, net metering, and capital subsidies are the key energy policies geared specifically towards the wind.
For instance, in the U.S., the Federal Business Energy Investment Tax Credit (ITC), a corporate tax incentive, allows the owners of new wind energy systems to receive tax credits worth 30% of the value of the facility. Such indicated incentives will allow the wind energy sector to grow significantly across the globe. Hence, the demand for wind turbine operation and maintenance is expected to increase.
Fluctuating Prices of Steel to Hinder Market Growth
Steel is a major raw material used for manufacturing wind turbines. The raw material cost completely depends on the terms and duration of the contract with the steel manufacturers, which might range between one year or several years. Moreover, the prices of steel are volatile due to which the final product cost may increase or decrease. For example, the cost of the raw material is going to increase the manufacturing cost, thus, increasing the cost of the final product. According to General Steel Corporation, in 2019 steel price was 425 USD/tonne compared to 2017 in which it was 395 USD/tonne. Also, the financial performance of the company may adversely be affected due to this fluctuation, thereby restraining the growth of the market for wind turbine operation and maintenance.
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Unscheduled Segment Dominated the Global Market in 2020
Based on type, the global market of wind turbine operation and maintenance is bifurcated into scheduled and unscheduled.
The unscheduled segment is expected to grow at a high growth rate during the forecast period. This is due to the high frequency of the services as unscheduled maintenance is mainly carried out during emergencies such as the breakdown of equipment or fire on the turbines.
The scheduled maintenance segment is expected to contribute significantly during the forecast period. Such services are carried out at a specific interval of time to maintain the smooth working of the wind turbines.
Onshore Segment to Grow at the Highest Rate during 2021-2028
On the basis of location, the market is bifurcated into onshore and offshore.
The onshore segment dominated the global market in 2020. The onshore services require low investment owing to the economical cost structure compared to offshore segments. On other hand, the offshore segment is projected to grow at the highest pace during the forecast period. The cost of O&M activities in offshore locations is very high owing to limited accessibility.
Europe Wind Turbine Operation and Maintenance Market Size, 2020 (USD Billion)
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Geographically, the market has been analyzed across five key regions such as North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
Europe is expected to remain dominant and hold the largest global wind turbine operation and maintenance market share in terms of revenue during the forecast period.In 2020, the region held more than 40% share of the global market. The region has the largest offshore installation, and also incurs high operation & maintenance costs. The UK is the major country in offshore capacity, with Germany, Netherland, and Denmark being the other key contributors in Europe. Also, the increasing installation of wind farms and supportive regulations are the major factor driving the growth of the market in Europe.
For onshore installation, Asia Pacific is the major region. Continuous growing demand for power in China, India, and Australia owing to rapid industrialization and urbanization provide a positive influence on the growth of the market. Furthermore, encouraging government policies is expected to boost the growth of the market in the region during the forecast period.
In North America, the U.S. is the major contributor to this market. Currently, more than 122 GW of wind capacity with around 60,000 turbines operating across 41 states in the U.S.
Latin America is expected to contribute significantly during the forecast period owing to rising spending on alternative energy sources and growing awareness about the benefits of proper maintenance of the wind turbine. Currently, 30 GW of operating wind capacity is present in Latin America.
The declining cost of wind power generation and rising investment in renewable energy generation in the Middle East & Africa are expected to drive the market growth. Recently, in December 2019, ENGIE and its consortium partners inaugurated the 262.5 MW Ras Ghareb wind park, Egypt’s first private and largest wind farm.
Key Players Focusing on Securing New Contracts
The market is fragmented owing to a large number of players. Currently, GE Wind Turbine, Siemens Gamesa, Suzlon Group, and Nordex SE lead the market accounting for a dominant share in 2020. The key players in the market are employing numerous strategies to consolidate their position. Focusing on new wind turbine operation and maintenance contracts is one of the preferred strategies by companies.
For instance, in May 2020, Siemens Gamesa, a Spanish wind turbine manufacturer, secured a long-term contract for 30 years. It covers full scope operation and maintenance services to operate Senvion’s 61 wind turbines in Victoria, Australia. In September 2018, Suzlon Energy Australia (SEA), had won an operation and maintenance contract for 252 MW of wind turbines. The contract is for five-year and it was started in late 2018.
An Infographic Representation of Wind Turbine Operation and Maintenance Market
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The global wind turbine operation and maintenance market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, types, and locations of the services. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.
Value (USD Billion)
By Type, Location, and Region
Fortune Business Insights says that the global market size was USD 28.05 billion in 2020
In 2020, Europe stood at USD 11.29 billion.
The global market is projected to grow at a CAGR of 8.3% during the forecast period
The unscheduled segment is expected to be the leading segment in this market during the forecast period.
The global industry size is anticipated to reach USD 52.74 billion by 2028 growing at a substantial CAGR of 8.3% during the forecast period (2021-2028)
Supportive government policies and regulations worldwide and focus on renewable energy targets are major factors driving the growth of the market.
Europe dominated the market share in 2020.
GE Wind Turbine, Siemens Gamesa, Suzlon Group, and Nordex SE are major players in the global market
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