Drop In Blade Manufacturing Costs Changing Wind Energy Supply Chains- GWEC

The global Wind Energy Council (GWEC) has explained the transformations in the Global Wind Blade Supply Chain Update 2020. According to GWEC Market Intelligence, wind blades are one of the vital and expensive components of a wind turbine, and reduced production costs will improve the supply chain. 

Having the right supply chain strategy is crucial for all wind turbine manufacturers, and is a key to ensure that the world can expand wind power at the necessary rate. And to reach new markets to meet decarbonization goals and keep global warming below 1.5°C. 

The growing demand for wind power across the world could be fulfilled by two main approaches; in-house manufacturing by turbine OEMs and vendors, and independent blade manufacturers. 

However, wind blade manufacturing has expanded from its home in Europe to North America, Asia, Latin America, and, to a lesser extent, Africa and the Middle East. According to the report, there are 15 turbine vendors, currently producing around half of the global demand for blades with in-house blade facilities. The remaining demand is met by around 20 independent blade manufacturers in 14 countries across four continents. This number has decreased by one-third since 2016 due to market consolidation as small and medium-sized manufacturers are unable to compete in cost, R&D investment, and global footprint.

It cited factors such as technology innovation, the pressure to reduce costs, the COVID-19 crisis, and ambitious long-term onshore and offshore wind targets that will impact the development of the global wind blade supply chain. 

Existing manufacturing capacity is sufficient to meet current wind market forecasts up to 2024 almost two times over. 

Supporting the report, Ben Backwell, CEO at GWEC commented, “Supply chain strategies in the wind industry have continued to evolve to meet changing market conditions and to reduce costs. As more and more countries transition away from support mechanisms such as Feed-in-Tariffs to auction schemes, cost reduction has become the top priority for turbine manufacturers, especially as they enter new emerging markets.”

“As a result, we are seeing the outsourcing of blade production to independent manufacturers becoming increasingly popular, continued momentum towards market consolidation, as well as innovation in design and materials used in blade production to reduce costs and extend the global footprint of manufacturers,” he added.

Over the last decade, longer wind blades have made turbines even more efficient, allowing asset owners to harness more wind resources, and helping to reduce the levelised cost of electricity (LCOE) for wind power across the world.

“As turbines become bigger and bigger, manufacturers are innovating blade designs to manage CAPEX of projects, improve on logistics, as well as find solutions for more sustainable end-of-life decommissioning. Considering that the number of turbines decommissioned will triple in 2030 compared to current levels, innovating blade designs to provide sustainable recycling options should be a key priority for the industry,” said Strategy Director at GWEC, Feng Zhao. 

He continued, “Although leading blade producers are confident that they can meet a growing demand from a technology point of view, greater long-term pipeline visibility is needed for manufacturers to invest in new facilities and increase their production capacity now to meet future demand.”

For the global wind energy sector, which has seen a surge in offshore wind set off a drop in onshore wind, costs will matter, Solar power has grown, and overtaken wind as the renewable option of choice in many regions due to its lower costs today.