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Worldwide Wind Turbine Market and

Manufacturing Trends
By Michelle Avis and Preben Maegaard

January 2008
Copyright: Folkecenter. Reproduction by written permission only.
TABLE OF CONTENTS
Introduction ................................................................................................................................ 4
Market Trends Analysis ............................................................................................................. 4
Current State of Worldwide Market .......................................................................................................................4
National Targets ......................................................................................................................................................6
Forecasts and Predictions .....................................................................................................................................7
Worldwide............................................................................................................................................................. 7
The Asia Pacific Market........................................................................................................................................ 8
China .................................................................................................................................................................... 8
India...................................................................................................................................................................... 9
Japan.................................................................................................................................................................... 9
Australia & New Zealand...................................................................................................................................... 9
Other Exploding and Upcoming Markets ............................................................................................................. 9
Canada ................................................................................................................................................................. 9
United States of America .................................................................................................................................... 10
United Kingdom.................................................................................................................................................. 10
Manufacturing Trends Analysis .............................................................................................. 10
Global Manufacturer Review................................................................................................................................10
Vestas Wind Systems, Denmark....................................................................................................................... 11
Gamesa Eolica, Spain....................................................................................................................................... 11
GE Energy, US.................................................................................................................................................. 11
Enercon, Germany............................................................................................................................................ 11
Suzlon Energy, India ......................................................................................................................................... 12
Siemens Wind Power, Denmark ....................................................................................................................... 12
Nordex, Germany.............................................................................................................................................. 12
Alstom (Ecotecnia), France .............................................................................................................................. 12
Mitsubishi .......................................................................................................................................................... 12
Fuhrländer......................................................................................................................................................... 12
Acciona Energia................................................................................................................................................ 12
Clipper Windpower, US..................................................................................................................................... 12
Composite Technology Corporation, US........................................................................................................... 13
Manufacturers in China ........................................................................................................................................14
Goldwind, China................................................................................................................................................ 15
Vestas, Denmark............................................................................................................................................... 15
Gamesa, Spain ................................................................................................................................................. 15
GE Energy, US.................................................................................................................................................. 15
Nordex, Germany.............................................................................................................................................. 15
Yinchuan (Nordex), China................................................................................................................................. 16
Nantong CASC Wanyuan Acciona Windturbine Manufactuing Co. Ltd (NCWA), China .................................. 16
Sinovel Windtec Corporation Limited, China .................................................................................................... 16
Dongfeng Electrical Machinery, China.............................................................................................................. 16
Hunan Hara XEMC Wind Power Co,. Ltd, China.............................................................................................. 16
Zhejiang Windey Wind Generating Engineering, China ................................................................................... 16
Baoding Huide Wind Power Energy Engineering Co. Ltd, China (state-owned) .............................................. 16
Beijing Beizhong Steam Turbine Generator Co. Ltd, China (state-owned), ..................................................... 16
Shanghai Electric Group, China ....................................................................................................................... 16
Guangdong Mingyang Wind Technology Co. Ltd, China .................................................................................. 16
REpower Systems AG, Germany...................................................................................................................... 17
Zhzhou Electric Locomotive Research Institute (ZELRI), China ...................................................................... 17
Suzlon, India ..................................................................................................................................................... 17
Global Turbine Manufacturing Industry ................................................................................. 17
Technologies and Product Development ...........................................................................................................17
Manufacturer Size Trends ....................................................................................................................................18
Multi-MW Class, >2500 kW .............................................................................................................................. 18
Mainstream and Sub-MW Class, 750 – 2500 kW............................................................................................. 19
Manufacturer Survey......................................................................................................................................... 19
Market Size Trends................................................................................................................................................19
Size Trends Worldwide ..................................................................................................................................... 19
Size Trends in China......................................................................................................................................... 20
Size Trends in the US Market ........................................................................................................................... 20

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Considerations & Challenges ................................................................................................. 21
Design Drivers .......................................................................................................................................................21
Growth in WTG Size..............................................................................................................................................22
Components and Accessory Production............................................................................................................22
Poor Quality Components................................................................................................................................. 22
Blades ............................................................................................................................................................... 23
Gearboxes ........................................................................................................................................................ 23
Variable Speed.................................................................................................................................................. 23
Bearings ............................................................................................................................................................ 23

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Introduction
Wind energy is the fastest-growing power generation technology, both in China and abroad and is clearly emerging
as one of the most promising solutions to replace conventional fossil fuels. With no fuel costs, no external energy
dependencies and no environmental cost, wind power can play an important role in increasing the security of
supply and reducing the environmental toll compared to conventional power generation.

Market Trends Analysis


Market numbers for 2007 are still being compiled are not yet easily available. However, numbers are expected to
be available late January/early February. Actual numbers used in this report are combination of available numbers
from 2007 and otherwise 2006 market data is used.

Current State of Worldwide Market


There are many thousands of wind turbine generators (WTGs) currently operating. The year 2007 represented
another record year worldwide with 20,000 MW of new installations. The worldwide annual wind power growth was
27%. The worldwide cumulative installed capacity is now 94,000 MW.

Results from 2007 show a consistent trend of increasing growth. The worldwide installed capacity in 2006 was 74
GW, up from 59 GW in 2005, representing 25.3% growth in 2006. The growth in 2005 was 23.7%.

This growth is second only to gas-fired capacity in terms of new electricity generating capacity but contributes only
approximately 1% of the total world electrical supply. The Global Wind Energy Council estimates that the total value
of new generating equipment installed in 2007 reached €25 billion, with a cost of €1.25 million per MW installed.
The worldwide market annual developments are shown in the figure below from 1997 to 2006. The world’s total
installed capacity at the end of 2007 is not shown, and is over 94,000 MW.

Figure 1: Worldwide installed capacity (MW), 1997-2006.


Source: WWEA Press Release, New World Record in Wind Power Capacity, Jan 2007.

Although a detailed market breakdown for 2007 is not yet available, growth in 2007 was dominated by the USA with

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5.2 GW. Spain and China follow and added 3.5 GW and 3.4 GW respectively.

The preliminary 2007 market numbers that have been released are shown in the table below.
Table 1: Total and annual installed capacity, 2006 & 2007.
Source: GWEC Press Release, Jan 2008.
Total Total
Additional Capacity Additional Capacity Growth Market
Capacity end Capacity end Rate Share
2006 2006 2007 2007 2007 2007
Region MW/yr MW MW/yr MW % %
USA 2,454 11,630 5,200 16,830 45% 18%
China 1,145 2,405 3,400 5,805 141% 6%
India 1,840 6,270 1,730 8,000 28% 9%
Europe 7,265 48,038 8,500 56,538 18% 60%
Other 2,196 5,561 1,266 6,827 23% 7%
World 14,900 73,904 20,096 94,000 27% 100%

Comparing this growth to 2006 numbers reveals how dynamic the market currently is. For instance, in 2006, USA
led the world installation rate with 2,454 MW/yr. This is less than half of what the US installed in 2007 (5,200
MW/yr). China and Spain have also more than doubled their 2006 installation rate.

Growth in 2006 is shown in the table below. That year, the top five countries (for yearly installed capacity) were:
USA (2,454 MW), Germany (2,194 MW), India (1,840 MW), Spain (1,587 MW) and China (1,145 MW). Another four
countries added more than 500 MW that same year: France (810 MW, 107% growth), Canada (768 MW, 112%
growth), United Kingdom (610, 45% growth) and Portugal (629 MW, 61% growth). The top 20 countries for
installed capacity in 2006 are also listed in the table below.
Table 2: Worldwide total and annual installed capacity, 2006.
Source: WWEA Press Release, New World Record in Wind Power Capacity, Jan 2007.

In 2006, Europe was the largest contributor with 65% of the installed capacity, followed by the Americas (18%) and
then South & East Asia (12%). Although Germany, Denmark and Spain have always led the European market, in
2006 3,755 MW was installed in the EU outside of these three countries, compared to only 680 MW in 2002. This
clearly represents that a second wave of European countries are investing in wind power.

Another indication that markets outside of Europe are catching up is evident in the 2007 available numbers. For the
first time ever, the European market accounted for less than half of the new capacity added, only 8.5 GW of the 20
GW installed worldwide. Total capacity is down to a 60% worldwide share, from 65% in 2006.

The North American market is the second largest in terms of total installed capacity and for the second year in a
row, installed more wind generating capacity than any other country. The American Wind Energy Association
recently announced that the US installed a record-breaking 5,244 MW in 2007, demonstrating a 45% growth and a

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$9 billion USD investment. Installations in the last four months of the year alone surpassed the total amount of wind
capacity installed in 2006. The US now has 16.8 GW of total wind generating capacity and if growth rates continue,
will surpass Germany by the end of 2009. As for Canada, the 2007 numbers are not yet available, but the country
had a record year in 2006, with installed capacity more than doubling.

The Asian market in 2006 exceeded all expectations primarily due to the strong growth in China, boosted by the
introduction of their Renewable Energy Law. In 2007, over 25% of the worldwide installations were in the continent
of Asia with China especially seeing impressive growth of 141%. In China alone, over to 3.4 GW of wind energy
capacity was added in 2007, bringing total installed capacity to nearly 6 GW. The growth seen in China is only
expected to rise as the country continues its rapid industrialization.

India also continued to see a steady growth and now counts about 8 GW of wind power installations, up from just
over 6.2 GW in 2006. In 2006, India, the fourth largest market in the world, began exporting its WTGs to other
countries and is setting up manufacturing facilities in some of the major markets.

New developments in Latin America and the Caribbean were demonstrated in 2006, with Brazil seeing a 729%
growth in its wind installed capacity in just one year.

The young Pacific Region market showed slowing in 2006 and this was blamed on political uncertainties and
unfavorable framework in Australia. However, New Zealand installed an impressive 151 MW in 2007 and Australian
government targets announced in 2007 have provided renewed initiative for that country.

Egypt and Morocco have emerged as leaders in Africa, currently the continent with the smallest amount of
development.

With increasing growth rates, markets are reaching installed capacity milestones faster than ever before. For
example, Denmark, one of the first countries to develop and install wind technology, took 16 years to pass the 2
GW threshold. Germany came later and attained the same goal in only 7 years while Spain, later yet, reached the 2
GW threshold in 5 years. Most impressively, in 2007, three countries installed more than 2 GW in one year, with the
US installing more than double that.

National Targets
The primary global drivers continue to be the concern of global warming, increasing security of supply and high oil
prices. Countries are increasing their focus on clean and domestic energy production, both of which wind offers.
Ambitious national wind energy targets are being set by numerous countries which will continue to drive demand to
unprecedented levels.

In March 2007, the European Union adopted a binding 20% target for renewable energy for 2020. As per the
European Wind Energy Association: "Wind energy will be a main contributor to achieving the target for 20% of the
European Union's overall energy supply to come from renewable sources by 2020". The official target for Germany
is to reach 12.5% of electricity needs by 2010. In 2005, the Spanish government approved a goal of 20,000 MW by
2012, France has set an ambitious target of 12,500 MW installed by 2010 and Portugal is aiming for 3750 MW by
2010 and for 45% renewable electricity by 2015. The United Kingdom also has a goal of 10% electricity from
renewables by 2010. The European Wind Energy Association set a target in 2005 for 300 GW of cumulative wind
power capacity by 2030, which would represent 22% of Europe’s electricity needs. Assuming 150 GW of 2 MW on-
shore turbines and 150 GW of 10 MW off-shore machines (a conservative estimate) this results in an additional
90,000 WTGs to be installed.

The United States Advanced Energy Initiative set a national goal to replace more than 75% of oil imports from the
Middle East by 2025 and looks to expand energy from wind significantly. The 2007 Budget includes $44 million
USD for wind energy research and recognizes that areas with good wind resources have the potential to supply up
to 20% of the electricity consumption of that country. As for Canada, "[the country] is on the cusp of a wind energy
boom as provincial governments are now targeting to have a minimum of 10,000 MW of installed wind energy
capacity in place by 2015” says the Canadian Wind Energy Association.

National targets in China are calling for 5 GW of capacity by 2010 and 30 GW by 2020. However current trends and
development activity is indicating that it is likely to achieve 12 GW by 2010 and closer to 60-75 GW by 2020. India
has drafted a model renewable energy law to increase the target for electricity generation by renewable energy to
10% by 2010 and 20% by 2020 of the total power generation in the country and has a planned target of 10,500 MW
of wind power to be installed between 2007-2012.

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Mid year 2007, the Australian government announced a Clean Energy Target to deliver 30,000GWh of zero and low
emission energy by 2020. Wind industry groups are calling for an even more ambitious target of 20% renewable
electricity generation by 2020 and 30% by 2030. New Zealand has banned the new construction of fossil fuel plants
by state-owned power firms in effort to promote and increase the use of renewable energy.

In Latin America, the government of Brazil has created an incentive program to build production capacity of 1422
MW and seeks to produce 10% of the countries electricity through wind power.

Forecasts and Predictions


Forecasting wind power development is tricky. The general trend of many previous forecasts is that the actual
developments well surpass even the most optimistic forecasts. For instance the American Wind Energy Association
predicted in January 2007 that the US would see 26% growth in 2007. In actuality, 45% growth was experienced.

Worldwide

In January 2007, WWEA issued the press release “New World Record in Wind Power Capacity’ and forecasted that
by 2010, the worldwide installed capacity would reach 160 GW, up from 73.9 GW installed in 2006. This implies an
anticipated net growth rate of over 21% per year. BTM Consult forecasted slightly higher installed capacity of 170
GW by 2010.

BTM Consults forecasted annual wind power development through to 2011 is shown below. By 2011, the rate of
installation will reach 33,500 MW/yr: 8.5 GW/yr for the Americas, 15.6 GW/yr for Europe, 6.95 GW/yr for South &
East Asia, 1.4 GW/yr for OECD-Pacific and 1.05 GW/yr for the rest of the world.

40000

35000

30000

25000
MW

20000

15000

10000

5000

0
1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Actual Europe USA Asia Rest of World

Figure 2: Annual Wind Power Development, Actual (1990-2006) and Forecasted (2007-2011).
Source- BTM Consult ApS, June 2007. Source: BTM Consult ApS – June 2007.

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In October 2007, BTM Consult released a longer term scenario forecast for 2020, extending their original 2011
forecast. They predict that the annual demand for wind power capacity will grow from today’s 20 GW/yr to around
140 GW/yr by 2020. This results in a 2020 cumulative worldwide installed capacity of nearly 1 million mega-watts
(1000 GW) and would replace between 7-8% of the world’s electricity consumption.

Figure 3: Annual Global Wind Power Development, Actual 1990-2006, Forecast 2007-2012,
Prediction 2013-2020. Source: BTM Consult ApS – December 2007 Press Release.

The Asia Pacific Market

The Asia Pacific Market now accounts for a third of global wind developments, with China and India leading the
way and contributing to about 80% of the regions annual growth. This region is emerging as the new frontier of the
global wind industry. The second tier countries in this region include Korea, New Zealand, Australia and Japan and
new wind markets are developing in Taiwan, Pakistan, and the Philippines. At the end of 2006, the total cumulative
installed capacity in the region was 8.9 GW, with 3.2 GW installed in that year. The BTM Consult ApS March 2007
report provided a short term annual development forecast for the region up to 2011. They expect an increase in
development to 6.95 GW/yr by 2011 with China alone increasing to 4.0 GW/yr. This results in a total region installed
capacity of 36.8 GW by 2011.

8,000

Rest of Asia
7,000
Taiwan
India
6,000
China

5,000
MW

4,000

3,000

2,000

1,000

0
2006 2007 2008 2009 2010 2011

Figure 4: Annual Wind Power Development Forecast (2007-2011).


Source- BTM Consult ApS, June 2007. Source: BTM Consult ApS – June 2007.

China

In 2006, China was the fifth largest market in the world, following the USA, Germany, India and Spain showing a
market growth of 91%. A great number of contracts have been awarded both for short-term and long term indicating
clear belief in the market. In addition, the International Energy Agency expects China’s electricity demand to
increase by 250% between 2004 and 2030.

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India

In 2006 India was the third largest market in the world, with over 1,800 MW installed that year or 12.3% of the total
market. It is estimated by Emerging Energy Research that India will continue to add between 1,800MW and
2,300MW annually through to 2015 as it quickly accelerates towards 10GW installed capacity. The Indian
government is implementing new policies in attempt to increase energy independence and improve environmental
performance which is anticipated to help the continued growth of the industry. Attractive opportunities exist for
investors however, the market is currently hindered by a lack of infrastructure and red-tape bureaucracy.

Japan

Japan’s goal of 3,000MW by 2010 is currently being hindered by the Japanese utility companies who are mounting
resistance to accept wind power based on intermittency, high cost and strict grid code. In addition, challenging
siting conditions and the lack of political will power are contributing to an industry stall. Domestic developers are
currently looking abroad for growth.

Australia & New Zealand

Australia has substantial wind resources, experienced and well-financed developers but lacks significant policy
support and targets. This is mostly attributed to the cheaper and abundant alternative, coal. However, once the
framework is laid, and with average wind speeds higher then those commonly found in Europe, this could be a
vibrant market. New Zealand has a healthy number of underway and proposed projects; the market there is
expected to build up smoothly.

Other Exploding and Upcoming Markets

Canada

Canada is another market experiencing rapid growth with 2,500 MW of contracts already signed and another 2,700
MW of proposals for additional installed wind energy over the next three years. Meeting the objective of 10,000 MW
would mean the installation of an average of 1,000 MW a year between 2008 – 2015. This represents an annual
investment of more than $2 billion CAD or the equivalent of 4,000 new 2-MW WTGs installed over the 7 year
period. The figure below demonstrates the tremendous growth seen in this market from 2000 (year end) to October
2007.

Figure X: Total Installed Wind Capacity in Canada, (MW).


Source: Canadian Wind Energy Association.

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United States of America

The American Wind Energy Association had estimated that after installing over 2,400 MW in 2006, the industry
would have installed over 3,000 MW in 2007. In actuality, over 5,200 MW were installed in 2007. Initial estimates
are that 2008 will equal 2007 in new wind capacity.

At least fourteen new manufacturing facilities opened or were announced in 2007. In 2006, Clipper Windpower,
Gamesa, Siemens and Suzlon all opened new manufacturing and assembly plants in the U.S. In addition,
Composite Technology Corporation (DeWind), Vestas and Acciona Energia announced plans for new facilities to be
located on U.S soil as well, breaking a long dry-spell in domestic wind turbine manufacturing investment.

If the country were to meet the recognized potential of 20% wind generating capacity this would mean increasing
the current total installed capacity of 11.6 GW to 320 GW, and incremental gain of 308 GW. This is four times more
than the total worldwide installed capacity at the end of 2006 (73.9GW).

United Kingdom

The UK has some of the best wind resources in Europe, with Scotland laying claim to having the highest wind
speeds. However, the region only ranks 8th in the world for cumulative installed capacity, behind four other
European countries. Germany, with less wind resource, had nearly 10 times the installed capacity by the end of
2006. By mid 2007, wind power generated over 2 GW, only 1.5% of UK electricity needs. The UK Energy Minister,
Malcolm Wicks, has said: “‘Put simply, wind energy in the UK could be greater than that in Germany and Denmark”.

Egypt

There are several emerging and promising markets in Africa, most notably, Egypt. A resource assessment
conducted in Egypt with the cooperation of Denmark concluded that the region has extremely favorable wind
conditions; the Gulf of Suez West Coast was identified as having the potential to host about 20,000 MW of wind
farms. At an energy conference in Cairo in May 2007, attended by P. Maegaard, the most comprehensive wind
energy program seen in Africa was discussed: plans to set up 750 MW of wind power annually over the next five
years.

Manufacturing Trends Analysis

Global Manufacturer Review


The primary worldwide suppliers in the wind turbine market are: Vestas Wind System (Denmark), Gamesa
Corporación (Spain), GE Wind (US), Enercon GmBH (Germany), Suzlon (India), Siemens (Denmark), Nordex
(Germany) and REpower System AG. (Germany). The top four suppliers are Vestas, Gamesa, GE Wind and
Enercon with approximately 28%, 16%, 15% and 14.5% of the market share respectively in 2006. Together, the top
four suppliers delivered nearly 75% of the words total added capacity in 2006. Most WTGs are manufactured in
Europe (although this is changing quickly as manufacturers are moving operations internationally), and almost all
designs are of European origin. In 2006, two new entrants made the top ten supplier list: Spanish company Acciona
and China-based Goldwind. The top ten manufacturers maintain a steady market share of around 95%.

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The 2005-2006 market share for the primary suppliers is shown for total mega-watt supplied in the figure below:

Figure 6: Manufacturer Worldwide Market Share 2005 – 2006 (MW).

Interestingly, Vestas is the only major company that does not rely heavily on its own domestic market. GE
dominates in the US, Gamesa in Spain, Enercon in Germany, Suzlon in India and Goldwind in China.

Another evident trend in 2007 is that large energy giants are continuing to enter the wind industry by buying up
developed and established companies and technologies. French power engineering multinational Alstom bought
the Spanish Ecotecnia for an estimated €350 million and French Nuclear Power giant, Areva, took over 51% of
Multibrid Entwicklungsgesellschaft’s shares in September 2007, after losing a takeover battle with Suzlon Energy
over the company REpower. Siemens acquired Bonus in 2004 in and recently acquired Flender Holding Gmbh, one
of the worlds leading suppliers of gearboxes, generators and frequency converters. GE entered the wind industry
through its acquisition of Enron Wind in 2002.

A brief summary of the major suppliers is provided:

Vestas Wind Systems, Denmark

In 2006, Vestas maintained its long time position as the market leader with over 27 GW of WTG’s sold that year.
This is a 77% increase in sales over that of the second ranking supplier, Gamesa. The key products for Vestas are
their V80 and V90, 2.0 and 3.0 MW series. However, the company recently announced the temporary withdrawal of
its 3 MW model from the offshore market and is rumored to be a response to multiple gearbox problems.

Gamesa Eolica, Spain

Gamesa made Vestas models as part of a joint venture in their early years. In 2006, the company surpassed the
10,000 MW mark in addition to opening four new production centers in the US for the manufacture of blades,
towers and nacelles for their G8x 2.0 MW wind turbine. This model is Gamesa’s primary product, representing 57%
of all sales in 2006.

GE Energy, US

GE Energy has been dependant on its 1.5 MW, 77 meter rotor wind turbine, and has over 6000 units installed and
operating. They have heavily dominated their home market earning a 45% market share in 2007. Their new
product, available early 2008, is a variable speed, pitch controlled, 100 meter rotor 2.5 MW with a permanent
magnet type generator.

Enercon, Germany

Since the launch of the 300 kW E-40 direct-drive turbine, Enercon has dominated the direct-drive market. In 2006,
Enercon had a particularly strong position in Germany with over 40% market share. This is especially articulated by
the fact that they have been able to achieve a 20-25% higher price as compared to comparable wind turbines. The
company’s current key volume model is their E-70, although the more recently released E-82, 2.0 MW turbine is
expected to overtake its predecessor. In addition, a 3 MW version of the E-82 is being tested and will become
commercially available in late 2008 or early 2009. Their 5 MW is also in production series.

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The E-126 prototype is currently the worlds most powerful wind turbine and was installed in Germany, in November
2007. This 6.0 MW machine towers 135 meters and the 126-meter blades are divided into two sections. The tower
consists of 35 pre-cast concrete sections with a top section made of steel.

Suzlon Energy, India

Suzlon’s volume models include the 1.25MW S.64 series and the 2.1 MW S.88 series. The S.64 model is a two
speed pitch controlled turbine while the S.88 is a limited variable speed design. In 2006, Suzlon Energy acquired
the Belgian gearbox maker, Hansen Transmission International, and in 2007 took over their German-based
competitor REpower. The most beneficial asset from the REpower acquisition is said to be access to REpowers
proven 5 MW offshore wind technology. REpower also offered a 2 MW machine with rotor diameters between 70
and 92.5 meters.

Siemens Wind Power, Denmark

Siemens Power Generation with head quarters in Denmark, entered the wind industry through its acquisition of
Danish Bonus Energy, in 2004 and held the 6th overall position of suppliers in 2006. In December 2007, the
company received their largest order yet, to supply 91 units of their 2.3 MW offshore turbines to a Danish energy
company.

Nordex, Germany

After a miracle recovery since 2005, Nordex Group revenues during the first half of 2007 increased by 28% to €323
million. More than 80% of their sales are outside of their home country, Germany. The company pioneered a 2.5
MW with an 80 meter rotor has been upgraded several times and the most recent announcement is the launch of
the 2.5 MW, 100 meter rotor for low and medium speed inland sites.

Alstom (Ecotecnia), France

In November 2007, French power engineering multinational Alstom closed the deal to purchase the Spanish
Ecotecnia for €350 million. By mid year 2007, Ecotecnia had installed more than 1500 wind turbines ranging
between 640 kW to 2 MW.

Alstom has announced plans to launch an 80 meter rotor diameter wind turbine in the US market for 2009. The
power rating will be between 1.6 MW and 2.0 MW.

Mitsubishi

This company is focused on their MWT 92/2.4 series, which is a 2.4 MW tubine with a 92 meter or 95 meter rotor.
In 2007, Mitsubishi earned a 7% market share of the US market.

Fuhrländer

Fuhrländer have a wide range of wind turbines from 250 kW to 2.5 MW. They have been successful in setting up
technology transfer and licenses to manufacturers in a number of markets, including Canada, Brazil and China.

In 2006, the company, in partnership with lattice tower expert SeeBA, erected the world’s highest wind turbine, with
a hub height of 200 meters. At the top of the tower sits a 2.2 MW Furhlander FL 2500 nacelle.

Acciona Energia

Acciona Energia is wholly owned by Acciona S.A., which is based in Spain and is a leader in the renewable energy
sector. The company is the largest developer, owner and operator of wind farms in the world, with 164 wind parks
in nine countries installed or under construction. Acciona Windpower manufactures a 1500 kW variable speed and
pitch turbine with a 70, 77 or 82 meter diameter rotor.

Clipper Windpower, US

Commercial sales of its 2.5MW turbine commenced in June 2006 and at the end of 2007 orders amounted to more

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than 5,600MW (2,240 units) through to 2011. However, some problems have arisen and gearboxes of the first
installed turbines at the Steel Winds wind farm have required replacement. Clipper turbines employ multiple
permanent magnet generators.

Composite Technology Corporation, US

Germany-based company DeWind, passed through a succession of owners before reaching the hands of US
company Composite Technology Corporation. It is now focused on penetrating the US market with its 2.0 MW
machine with hydro dynamic Voith gear and synchronous generator. Worldwide Production Capacity

The present situation with more and more countries implementing national wind targets in addition to the
continually improved economics of wind generated electricity has demonstrated that the international production
capacity for WTGs is completely insufficient in regard to the demand. This has resulted in expansions from the
existing producers, but there are still yet delivery times of several years, especially from the leading manufacturers.

The table below shows for the top 20 national wind markets, which countries have domestic manufacturing and
which do not.
Table 3: Production Capacity of top 20 wind markets. Source: WWEA Press Release,
New World Record in Wind Power Capacity, Jan 2007 & XMIRE Comments for Production Capacity
Ranking Country Installed Production
2006 capacity Capacity?
2006
[MW]
1 Germany 2,194 Yes
2 Spain 1,587 Yes
3 USA 2,454 Yes
4 India 1,840 Yes
5 Denmark 8 Yes
6 China 1,145 Yes
7 Italy 405 No
8 United Kingdom 610 No
9 Portugal 628 No
10 France 810 No
11 Holland 336 *
12 Canada 768 *
13 Japan 354 Yes
14 Austria 146 No
15 Australia 238 No
16 Greece 183 No
17 Ireland 147 No
18 Sweden 54 *
19 Norway 55 *
20 Brazil 208 Yes
Total 14,170
21 Rest of World 730
World Total 14,900
* Emerging domestic manufactures

This table shows that of the top 20 markets, representing 14.1 GW of annual capacity installed in 2006, only 8
possess the ability to manufacture domestically. This clearly demonstrates the possibilities for manufacturers to
commence production not only in a national, but in a global market.

In the United States in 2007, of the 5,245 MW of wind capacity installed, only 46% came from domestic
manufacturers as per the American Wind Energy Association 2007 Market Report.

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In 2006, there were two countries with more than 2 GW/yr and 3 countries with more than 1 GW/yr installed. With
the demonstrated growth rates many more countries have the potential of installing more than 1 GW/year in the
next few years. The US has shown with 2007, growth as high as 3.4 GW in one year is attainable; this is more than
the cumulative installed capacity in all of Denmark. With such dynamic markets developments heavy expansion of
the production capacity is required. The BTM Consult longer term scenario predicts an increase from the 2007 rate
of 20 GW/yr to 140 GW/yr in 2020. To meet this demand will require a sevenfold increase in production capacity in
just 12 years.

In some countries like Germany and Denmark, shortage of skilled labour and engineers may limit their ability to
maintain their share of this rapidly growing market. Also some emerging markets are introducing various protection
schemes for national products which gives domestic manufactures market benefits as compared to imported
products.

Manufacturers in China
Currently there are more than 40 manufacturers supplying the Chinese Market, including domestic owners, joint
ventures and international companies. Goldwind was the top supplier in the Chinese Market in 2006, followed by
Vestas and Gamesa.

Other China, Suzlon , 0.2%


Acciona, 7.9%
3.7% Goldw ind,
31%
Gamesa, 16%

Repow er,
0.4%
GE Wind,
9.9%
Vestas, 28% Nordex, 2.4%

Source: BTM Consult ApS - M arch 2007

Figure 7: 2006 Market Shares in China, % of 1,337MW Total.

Chinese customs rulings favor domestic production of WTGs with 3% import duty for individual parts, 8% for
assembled components, and 17% for entire pre-assembled turbines. In response to stringent local content
requirements, foreign players are choosing between four different strategies: wholly-owned operations, joint-
ventures, technology licensing, or joint-development with a local partner. There are numerous foreign suppliers
(Gamesa, GE, NCWA (Acciona JV), Nordex, Suzlon and Vestas) and all are scaling up domestic manufacturing in
China in order to meet the 70% domestic content requirement. Some manufacturers even view China as a low-cost
manufacturing center for export demand as well.

Worldwide Wind Turbine Market and Manufacturing Trends- DRAFT Page 14/23
Chinese manufacturers are entering the market at an unprecedented rate. It is estimated that more than 25
companies have serious plans to manufacture WTG’s in the near future, some with in-house developed technology,
but many through technology transfer or license arrangements, joint ventures or joint-developments. In 2007,
domestic supply accounted for 56% of the annual market, as compared to 41% the year before.

80% 75%
70%
70%

60% 55%

50%
41%
40%
30%
30% 25%

20%

10%
4%
0%
2004 2005 2006

Foreign Domestic Joint-Venture

Figure 8: Market Share of Domestic and Foreign WTGs in China,


2004-2006. Source: 2007 China Wind Power Report.

A summary of the most active companies and their recent activities is provided, however, this is not an exhaustive
list.

Goldwind, China

Goldwind is China’s primary domestic supplier of WTGs and tenth among global manufacturers, with a 33% market
share in 2006 and 667 MW of installed capacity. The main products of the company include a 600 kW, 750 kW, 800
kW, 1.5 MW WTGs and more recently 2.0 MW and 2.5 MW WTGs are under development. The 1.2 MW and 1.5
MW gearless direct drive WTGs are Vensys licenses, valid for the Chinese Market only.

Vestas, Denmark

With a 28% market share, Vestas leads the foreign manufacturers in the Chinese market. Early 2008, an order for
232 850kW WTGs was received from the China Guangdong Nuclear Wind Power Co. Ltd for four projects in Inner
Mongolia. Vestas has recently opened a new factory for assembly of nacelles and hubs as well as a new generator
factory in Tianjing, China. These were built in connection with the existing blade factory. The generator factory
capacity is ~350 units of 2MW, the nacelle and hub factory also has a capacity of 350 units.

Gamesa, Spain

Gamesa has 29 worldwide manufacturing facilities including an assembly plant Tianjin, China where sample turbine
production of a 850kW variable pitch and speed unit is being completed.

GE Energy, US

The GE Energy (Shenyang) Co. Ltd facility opened mid 2006 and is producing 1.5 MW variable speed and pitch
units.

Nordex, Germany

Nordex was the first to set up local wind turbine manufacturing in 1998 and in November 2007 announced plans to
invest EUR 50 million in China to nearly quadruple annual production capacity by 2011. Annual production capacity
will increase from 225MW to 800 MW with plans to expand current 3% market (2006) to 15% by 2011. Nordex is
targeting Chinese Utility companies to supply their large-scale wind farms with 1.5 MW systems.

Worldwide Wind Turbine Market and Manufacturing Trends- DRAFT Page 15/23
In November 2007 Nordex announced a 28 unit order for their 1.5MW WTGs. The customer is the regional utility
Ningxia Electric Power Group. The nacelles are being assembled at the Yinchuan (Ningxia) facility, in which
Ningxia Electric Power holds a 40 per cent stake. Nordex will be producing the rotor blades at its own factory in the
Eastern Chinese province of Shandong.

Yinchuan (Nordex), China

Using a Nordex (Germany) production license and producing 1.5 MW variable pitch and speed units.

Nantong CASC Wanyuan Acciona Windturbine Manufactuing Co. Ltd (NCWA), China

ACCIONA and the Chinese public group CASC (China Aerospace Science and Technology Corporation) have a
45% ownership interest and the Hispano-Chinese marketing firm, INCEISA, 10% in this wind turbine manufacturing
firm. The plant in Nantong has the capacity to produce 400 units per year of 1.5 MW variable speed and pitch and
plans to expand to as much as 900 units per year.

Sinovel Windtec Corporation Limited, China

Sinovel, based in Beijing, is the second largest domestic manufacturer in terms of installations using a Fuhrlander
(Germany) production license for their 1.5 MW variable speed, variable pitch WTGs.

They also signed a multi-million dollar contract with Windtech, a wholly-owned subsidiary of the American
Superconductor Corporation (AMSC) in March 2007. Under the terms of their contract, Windtec and Sinovel will
design and jointly develop a 3 MW, planned for production in 2009 and a 5MW planned for the following year. The
agreement includes a right of first refusal for AMSC to provide the necessary electrical components.

Dongfeng Electrical Machinery, China

This company is using a REpower license to manufacturing 1.5 MW variable pitch and speed units in China with an
annual production capacity of 300 units.

Hunan Hara XEMC Wind Power Co,. Ltd, China

This is a joint development with Harakosan of Japan using Lagerwey technology. The company is producing a 2
MW direct drive unit.

Zhejiang Windey Wind Generating Engineering, China

Windy is a REpower business partner in China and activities include the production under license and the sale of
REpower’s stall regulated 600 kW and 750 kW wind turbines. Developed and developing a 800kW active stall and
a 1.5 MW variable pitch and speed turbine.

Baoding Huide Wind Power Energy Engineering Co. Ltd, China (state-owned)

Using Fuhrländer (Germany) production license for 1 MW stall regulated machines.

Beijing Beizhong Steam Turbine Generator Co. Ltd, China (state-owned),

DeWind (USA) production license for 2 MW variable pitch and speed.

Shanghai Electric Group, China

DeWind (USA) production license for 1.25 MW variable pitch and speed. Currently in the design phase of a joint
development of a 2 MW variable pitch and speed with Aerodyn Design Company of Germany.

Guangdong Mingyang Wind Technology Co. Ltd, China

Sample production phase of a joint development of a 1.5 MW variable pitch and speed with Aerodyn Design

Worldwide Wind Turbine Market and Manufacturing Trends- DRAFT Page 16/23
Company of Germany.

REpower Systems AG, Germany

REpower North (China) Co., Ltd. joint venture project is currently producing variable speed and pitch 2 MW WTGs
in China and was awarded a 150 MW wind farm project in the province of Shandong in October 2007. Seventy-five
2 MW WTGs are to be delivered in 2008/2009.

Zhzhou Electric Locomotive Research Institute (ZELRI), China

In January 2007, AMSC announced that its wholly-owned subsidiary, Windtec had sold a license for a 1.65MW to
Zhuzhou Electric Locomotive Research Institute (ZELRI), a division of China-Southern-Loric. The terms included an
upfront fee of ~US$2 million, royalty for each turbine installed and a right of first refusal for AMSC to provide the
necessary electrical components.

Suzlon, India

In January 2008, the China subsidiary, Suzlon Energy Tianjin Limited (SETL), announced the signing of two large
orders from the Jingneng Group for 33 units of 1.5MW and 40 units of 1.25MW. Company ranked as the fifth
leading wind turbine supplier in the world with over 7.7% of global market share, according the the 2006 BTM
Consult World Market Update. In early 2007, the company announced plans for a manufacturing facility in Tianjin,
china to manufacture WTG’s, rotor blades, nacelles and control panels.

Global Turbine Manufacturing Industry

Technologies and Product Development


Following the Oil Crisis of the 1970s, modern wind energy development was fueled by an increased interest in
security of supply and long-term sustainability, especially in Denmark.

The basic design since that time has remained relatively unchanged, the “Danish Concept” is a three-bladed gear-
driven, fixed speed upwind design with asynchronous generator. Two Danish companies: Vestas and Bonus
(acquired by Siemens) have historically dominated the large wind turbine market.

Two features that have gained considerable ground from the original concept are variable speed and pitch
regulation. Pitch control rotates the three blades along the blade axis in order to change the approach angle of the
wind relative to the blade surface in order to control power and load.

Since 2003, attention has been focused on technology around 1.5 MW and higher and demand is focused more
and more on standardized products. A large number of specialized sub-suppliers for blades, controls, gears,
brakes, pitching, yaw, and generators are delivering to the whole industry.

A few years ago there were quite a few untraditional concepts, but today only two real concepts in the MW size
exist within the industry, and the difference is limited to using a gearbox with an asynchronous generator or a
synchronous ring generator. Some manufacturers including DeWind, GE Wind, Clipper and Multibrid have
presented concepts with gear and synchronous generator.

WTGs with a gear box are considered industrial standard and approximately 85% of the global production of
turbines are of this type, including companies such as Vestas, Siemens, GE Wind, Repower, Führländer, Gamésa,
Ecotecnia, Acciona and Suzlon which are the most important manufacturers and the leaders within the technology.
The main function of the gearbox is to increase the speed of rotation. For a 2 MW turbine this could mean stepping
up from 8-20 rpm to usually 1000 or 1500 rpm generator speed.

The other main wind turbine concept is without a gearbox (e.g. direct-drive), where the generator speed is identical
to that of the rotor. Direct-drive turbines (e.g. synchronous-type generators) save the capital costs of the gearbox.
The synchronous generators have some advantages of high efficiency at partial load as WTGs will run for many
hours of the year at partial load. Also grid compatibility for synchronous generators is claimed to be an asset. While
gear-driven WTGs use standardized generators, direct-drive requires custom built generators. The direct-drive
generators are also much larger making it more difficult to transport and install the nacelle. Enercon dominates the

Worldwide Wind Turbine Market and Manufacturing Trends- DRAFT Page 17/23
direct-drive market and enjoys a very strong position in their home market, Germany with a 42% share. Over the
past five years many newcomers have tried to establish themselves with this concept, but commercial success has
been limited. The world’s percentage of installed direct drive WTGs over this time has stayed around 13-15%.
Companies that have recently had direct-drive initiatives include:
ƒ The Dutch wind company Lagerwey held the 2nd position in the commercial direct drive market with
approximately 750 turbines installed (not all direct-drive) when it declared bankruptcy in 2003. Several
companies have acquired the technology rights. Emergya Wind Technologies (Netherlands) is producing a
900 kW- 54 meter rotor. Harokasan of Japan is producing a 1.5 MW- 72 meter rotor from a production
location in the Netherlands. Americas Wind Energy, based out of Toronto, Canada, is manufacturing a 750
kW-52 meter, and a 900 kW- 52/54 meter turbine.
ƒ DarWinD of the Netherlands is developing a 4.8 MW offshore wind turbine
ƒ Leitner AG of Italy has three different size models: 1.2 MW- 61 meter rotor, 1.35MW- 77 meter rotor and 1.5
MW- 70/77 meter rotor.
ƒ Scanwind of Sweden has a 3.5 MW, 90 meter rotor with a permanent magnet type generator
ƒ MTorres Group of Spain originally developed a 1.5 MW and later scaled up this model to a 1.65 MW
70/77meter rotor.
ƒ Newcomer Unison has developed a pitch regulated direct 750 kW drive turbine with a water-cooled
permanent magnet type generator with support of the Korean government. The company is now undergoing
research and development for a 2 MW unit.
The hybrid concept, “Multibrid” comprises a single-stage planetary gear, into which the rotor bearing is integrated,
and a generator rotating at slow speed. The goal is to avoid the complexity of a multistage gearbox and achieve
compactness. The Multibrid technology is now employed successfully in three commercial products: Finnish
WinWinD turbines of 1 MW and 3 MW and the 5 MW Multibrid offshore turbine. French Nuclear Power giant, Areva,
took over 51% of Multibrid Entwicklungsgesellschaft’s shares in September 2007, after losing a takeover battle with
Suzlon Energy over the company REpower.

The evolution of large wind turbine technologies from the original Danish concept in the 1980’s to today is shown in
the table below:
Table 4: Evolution of large wind turbine technologies, 1980-2007
Early Early Late
1980s 1990s 1990s 2000–2007
Stall regulated X X
Active stall X
Fixed speed X X X
Limited Variable Speed X
Gearbox X X X X X X
Pitch regulated X X X X X
Variable speed X X X X

Direct Drive X X X X
"Multibrid" X X

Manufacturer Size Trends


WTGs are generally segmented into several classes. The “Multi-MW” class is the largest of the available turbines
and includes machines greater than 2500 kW. “Mainstream” is considered machines in the 1501 kW-2500 MW
range, “Sub-MW” are those between 750 kW -1500 kW and “Small WTG’s” are smaller than 750 kW.

Multi-MW Class, >2500 kW

Manufacturers continued to push the size envelope and big strides have been made in recent years. The worlds
most powerful wind turbine installed in Germany, in November 2007, is Enercon’s 6.0 MW, 126-meter machine.
Other available multi-MW class machines include GE Wind's 104-meter diameter, 3.6 MW-turbine, RePower’s 5
MW 126-meter, Siemens' 3.6 MW 107-meter and new entrant, Multibird, has unveiled a 116-meter, 5 MW turbine.
Several companies have announced plans to develop and introduce new models including a 100-meter 3 MW
machine by Alstom (Ecotecnica) and Darwind, of the Netherlands, and WinWinD of Finland have announced plans
for a 4.8 MW and 3.0 MW respectively. These giants are most often designed and focused for the offshore market.

Worldwide Wind Turbine Market and Manufacturing Trends- DRAFT Page 18/23
Mainstream and Sub-MW Class, 750 – 2500 kW

There continues to be a strong market for Mainstream and Sub-MW class WTGs for onshore markets. Machines in
this size range are easier to install because their components are smaller, requiring narrower roads and smaller
cranes.

Manufacturer Survey

A survey of worldwide of wind turbine manufacturers (not including Chinese Manufacturers) was performed to
evaluate trends in turbine product sizes (>299kW). The results are shown in the table below. Of the 39
manufacturers surveyed, 83 different models/power sizes were being produced. Nearly 50% of the current models
offered are between 700kW and 1MW. The most prominent range is between 1.1 MW and 1.5 MW; over 24
different manufacturers are currently producing models. Therefore the majority of manufacturers are choosing to
offer a model in the 1.1-1.5 MW range than any other size.

There are only 11 manufacturers offering WTGs in the 2.1 – 2.5 MW range and 10 manufacturers have WTGs in
the ‘greater than 2.5 MW’ range; most of the WTGs in the latter category are specifically focused on the growing
off-shore market.

Table 5: Number of WTGs offered in a specific range


based on a survey of 39 manufacturers
Number of
Range Models
<699 kW 10
700kW - 1 MW 17
1.1 MW - 1.5 MW 24
1.6 MW - 2.0 MW 11
2.1 MW - 2.5 MW 11
> 2.5 MW 10
TOTAL 83
Note that the above numbers only represent the absolute count of available models and not the total market share
of a particular range. In order to understand demand for a certain size range, total number of units sold must be
surveyed.

Market Size Trends

Size Trends Worldwide

The size of WTGs installed has been increasing steadily over the last number of years. The most substantial size of
turbine being delivered is the 1.5 MW- 2.5 MW machine. Although the installation of machines larger than 2.5 MW
has stayed relatively low, it has consistently doubled year after year: from 0.9% to 2% and then to 4% from 2004-
2006. The Sub-MW Class range (750 kW- 1500 kW) is said to be experiencing a renewed interest, with a number
of newcomer manufacturers offering products in this range. This includes Unison of Korea, Conergy of Germany,
Innovative Wind Power of Germany, and a large number of Chinese manufacturers focusing in on this range.

Table 6: Worldwide product sizes supplied in 2004-2006.


Source: BTM Consult ApS – March 2007
300 - 750 - 1501 - > 2500
YEAR 749 kW 1500 kW 2500 kW kW
2004 5.4% 51% 43% 0.9%
2005 3.6% 48% 46% 2.4%
2006 2.4% 43% 50% 4.3%

Interestingly, Elin, a generator manufacturer in Austria recently commented in a personal communication that in
2005 the average generator size sold was 1.2 MW, in 2006, 1.5 MW and last year (2007) the average size was 1.6

Worldwide Wind Turbine Market and Manufacturing Trends- DRAFT Page 19/23
MW. In their opinion, the size increases were hitting a plateau.

However, rather than simply evaluate generator size, one must consider improvements that have led to increased
production for the same generator. For instance, the height of tower and length of blades are two significant design
features that have continued to increase. When the 1.5 MW was first introduced in 1995, the rotor diameter was 65
meters. Nowadays that generator size comes with rotor diameters of more than 80 meters. This is due to both the
availability of larger rotors and the adoption to various wind classes. Turbine tower heights are also increasing with
improved technology and manufacturing methods. With the increases in tower heights and blades, the most recent
versions of the same generator-sized wind turbine have a significantly higher production.

Size Trends in China

By the end of 2006, 3,311 WTG’s were installed in China with a total capacity of 2,600MW. Only 11% of these are
of 1 MW capacity and above. Nearly 50% of WTGs currently installed in China are 600 and 750 kW machines.

Others
1.5 MW 2 MW
10%
1% 600 kW
9%
29%
1.3 MW
1%

850 kW
30% 750 kW
20%

Figure 9: Turbine Capacity types installed in China at the end of 2006. Source: 2007 China Wind Power Report.

Size Trends in the US Market

The American Wind Energy Association wind turbine database was used to investigate size trends in the US
market. The table below shows the average wind turbine size installed between 1999 and 2007, in addition to the
average wind turbine size for the data available for wind parks currently in construction and/or planned for 2008.
Note that the data for 2008 is not considered complete and represents only 3655 MW of planned additions. If we
assume a 30% growth rate in 2008, the expected installed capacity is closer to 6500 MW. Therefore, the data
available for 2008 only represents approximately 60% of the expected projects and is only provided for information.

The average wind turbine size is calculated by dividing the total installed capacity for that year by the number of
WTGs installed.
Table 7: Average Wind Turbine Size US Market, MW,
1999-2006 (Installed) & 2008 (Listed as Planned or in Construction)
Average Growth
Turbine in Avg.
Year Size (MW) Size
1999 0.71 -
2001 0.88 24%
2003 1.19 35%
2005 1.44 21%
2006 1.61 12%
2007 1.60 -0.3%
2008 (planned) 1.79 12%

From 1999 to 2005 the average turbine size installed was increasing by than 20% per year. In 2006, the size
increase was less than half of 2005 and in 2007 no size gain was achieved. Based on this data alone, one may
conclude again that the increasing size trend is hitting a plateau. Interestingly, data available for 30 wind farms
planned in the US for 2008 showed an average wind turbine size of 1.79, a 12% gain over 2007. At this time it is
unknown if this trend is skewed by the fact that only certain (maybe large?) wind projects are listed, or if this is

Worldwide Wind Turbine Market and Manufacturing Trends- DRAFT Page 20/23
representative of the 2008 market.

The chart below is useful for analyzing the most popular size of wind turbine, from a total number of WTGs installed
perspective. It is evident that the increase in average turbine size for 2008 is attributed to a substantial increase in
the use of especially 2.0 MW machines. Only one project is listed as planning to use 4.0 MW (45 total WTGs) and
two additional projects are using 3.0 MW, totaling over 300 units of this size. However, the 1.5 MW turbine has by
the far the most significant market penetration, with approximately 50% of the market share in both 2006 & 2007.
The market share of 1.5 MW machines for 2008 is down based on available data, but still represents over 640
machines to be installed in the US in 2008. No distinction is made in this data between on-shore and off-shore
installations.

3000

2500
Number of Wind Turbines

2000

2008
1500 2007
2006

1000

500

0
0.5 0.65 0.66 1 1.25 1.5 1.65 1.8 2 2.1 2.3 2.4 2.5 3 4

Wind Turbine Size, MW

Figure 10: Wind Turbine Size Distribution, US Market, MW,


2006-2007 (Installed) & 2008 (Listed as Planned or in Construction)

Considerations & Challenges


With the unparalleled demand for wind turbine components, developers pushing for larger machines and insurance
companies demanding increased reliability, wind turbine manufacturers are wise to carefully plan and consider the
challenges ahead. In addition, a regular claim is that models are brought into series production without having
overcome preliminary flaws.

Design Drivers
The primary design drivers for wind turbines are reliability, acoustic performance, efficiency and grid impact.

A wind turbine is expected to be reliable and run for 20 years at an availability of 95-98% with maintenance
required only every 6 months. Only designated components should be replaced at preplanned intervals because of
known wear characteristics.

For acoustic performance there are three main sources of noise emissions: the generator, gear and blades. The
generator and blade noise levels can be minimized by design. In addition, a well sound-proofed nacelle will further
reduce noise from the generator and gear. Blades with high tip speed ratios are preferred from an economic
standpoint as they are slimmer and use less material. However, this type of blade will produce more noise than an
equivalent rotor diameter with a lower tip speed.

The aerodynamic efficiency of blades has risen from a coefficient of performance of 0.44 to up to approximately 0.5

Worldwide Wind Turbine Market and Manufacturing Trends- DRAFT Page 21/23
with advanced technologies. The Bets factor is the theoretical limit, and is 0.59. Also, larger blades for the same
size of rotor, variable speed control and pitching technology have positively influenced the efficiency.

The synchronous generators have provided new standards for grid impact. However, asynchronous generators are
living up increased grid operator requirements.

Growth in WTG Size


For large WTG’s, specific consideration must be given to designing low mass nacelles, large rotor technology,
advanced composite engineering, installation and maintenance methods and grid connection of large wind farms
without sacrificing mechanical safety factors.

Logistics and installation particularly require additional consideration for large WTG’s. The availability of cranes that
are both tall enough and have the necessary rated capacity is limited, with significant wait periods being reported.

Offshore brings new challenges, more variable and increased wind speeds and extreme conditions. The cost of
infrastructure in an offshore project including foundations and cables can represent up to 40-60% of the total
project costs. In order to maximize the installation costs per unit of energy installed, larger wind turbines are
installed. In addition, because of the increased technical risk, larger wind parks are justified on the basis of having a
better return on investment. Again, installation considerations are numerous. One reoccurring issue is the
availability of wind turbine installation vessels. With the same vessels required for projects in the oil and gas sector,
wind project developers have found themselves competing with an industry that can afford higher prices.

Vestas of Denmark recently announced a temporary withdrawal of its 3 MW model from the offshore market and is
rumored to be a response to multiple gearbox problems. GE Wind, Siemens, REpower Systems AG, Multibrid
Entwicklungsgesellschaft and Bard Engineering are currently the only 4 major suppliers of offshore wind turbines.

One trend that is expected to be seen with WTGs is that there will be more differentiated designs to the specific
market segments. For instance, although the same basic turbine design has been used in the past for both onshore
and offshore applications, the latter application will see more than double the full load hours in one year. Another
example is that a geographic area in a high average wind speed and low survival speed will have different design
requirements than a typhoon-prone area.

Components and Accessory Production


If not complete wind installations, most future markets will, for cost reasons, build their own towers and blades.
Towers are relatively simple to build and therefore any country with an existing steel industry will find
manufacturers. Blades, like towers, are costly to transport over long distances as well as vulnerable to damage.
This leaves for the WTG manufacturers to be system suppliers, deliver nacelles, and to be responsible for their
product guarantees and services.

Lack of production capacity of key components is an issue requiring strategic planning and careful consideration. In
2006 and 2007 there were reports of overall shortages of components in the industry, including generators, blades,
and bearings.

The cost of high quality forged steel continues to rise with increasing energy prices and availability is decreasing
due to competition from other industries also reliant on steel.

Poor Quality Components

With reported delivery periods ranging up to 18 months it has been reported that an in flux of low quality and
imitation components have entered the market.

Future costs of integrating poor quality components into a wind turbine can be substantial. For instance, the
replacement cost of a €100 faulty bearing in a large wind turbine including crane rental and labour could potentially
cost upwards of €200,000.

Major suppliers are attempted to overcome these supply-chain issues by establishing partnerships or by vertically
integrating by acquiring their sub-suppliers or developing in-house technology. For instance, in 2005, Siemens
acquired Flender Holding GmbH, one of he world’s leading suppliers of electrical and mechanical drive systems,

Worldwide Wind Turbine Market and Manufacturing Trends- DRAFT Page 22/23
including gearboxes, generators and frequency converters. In 2006, Suzlon Energy acquired the Belgian gearbox
maker, Hansen Transmission International.

Blades

Wind turbine blade manufacturing requires special knowledge in aerodynamics, advanced materials, modern
manufacturing and testing. The independent supply industry is largely dominated by LM Glasfiber of Denmark, with
factories for production in all important markets. Polyester or epoxy based systems predominate in blade
manufacturing. Carbon fiber spar-caps are increasingly used in large blades.

Vertical integration for several leading turbine suppliers has included the development of in-house blade
manufacturing. With the substantial cost of transport for blades leading suppliers are also setting up blade
manufacturing in the domestic market that is being targeted. For instance, Vestas, Gamesa, Suzlon and Nordex
(planning) all have their own blade manufacturing in China.

Gearboxes

Gearboxes comes from an old and well established industry which supplies numerous other industries including
ships, rolling mills, mining, locomotives etc. Structural technical problems are mostly related to the mechanical
elements in the wind turbine, most notably and historically the gearbox. In 2000-2002 the Danish windmill factory
NEG Micon had to replace the gears in 1,000 windmills, most of which had been sold to the American market. This
was damaging for the general reputation of wind power within the financial investors, insurance companies and the
general public.

It is of the opinion of several industry experts, including XMIRE, that the problems with gearboxes can in general be
assigned to under-dimensioning of the gear, done in effort to reduce weight and costs. Many properly designed
and engineered types of wind turbines with well dimensioned gearboxes have been in operation for 20 years or
more without requiring gear replacement.

Variable Speed

Advantages of using variable wind speed technology include the possibility of active grid support and the potential
to operate WTGs as peak power plants.

The U.S. patent for variable-speed WTG system electronics, awarded originally to Kenetech Wind power in 1993
and now owned by GE Energy, has prevented major European WTG suppliers from selling variable-speed turbines
in the growing U.S. market.

GE currently holds a North American ‘variable speed’ patent that, according to industry souces, will remain valid
until 2010 or 2011. GE’s longstanding patent dispute with Enercon was resolved in 2004. According to industry
experts, other competitors have to prove that their technology does not violate the patent or close a separate deal
with the patent holder. However, although the patent was earlier considered a major advantage, market trends have
not reflected this, with GE’s market share dropping 14% from 2005 to 2006.

Bearings

A number of bearings are required for the shafts, gearboxes, yaw mechanism, generator and other rotating parts.
The two major bearing manufacturers worldwide are SKF and FAG.

Worldwide Wind Turbine Market and Manufacturing Trends- DRAFT Page 23/23

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