Top 10 Turbine OEMs to Spend €2.3 bn on R&D by 2023

A new report has revealed that the R&D expenses among the world’s top ten wind turbine OEMs is expected to increase to € 2.3 billion by 2023.

A new report has revealed that the research and development (R&D) expenses among the world’s top ten wind turbine original equipment manufacturers (OEMs) is expected to increase to € 2.3 billion by 2023.

Wood Mackenzie Power and Renewables has in its new report, ‘Next-Generation Wind Turbine Models’ revealed that the R&D expenses for the said OEMs has doubled over the last 4 years, reaching €1.6 billion in 2018. And, that this number will only continue to increase.

According to Shashi Barla, Wood Mackenzie Power & Renewables Principal Analyst,  the turbine OEMs have accelerated R&D investments in next-generation turbine platforms, battling against new unit sales margin compression and the market’s need to further reduce wind energy’s Levelized Cost of Electricity (LCOE).

Turbine technology investments are central to lowering LCOE below the €15-20/MWh mark and mitigating developer/off-taker increased exposure to merchant power prices.”

The report further highlights that these OEMs are expected to continue their frantic pace of new product introductions, including 7-8 MW onshore turbines with 200+ m rotors expected to be available by 2025 and 20+ MW offshore turbines with 280+ m rotors possible before 2030.

“Offshore wind turbine sizes are expected to sit at around 20 MW by 2030. The cost of technology, the balance of plant equipment and installation of vessels to handle such large components will play a crucial role in this increase. Turbine OEMs must work in tandem with the supply chain to ensure these technologies can be developed and deployed cost-effectively,” Barla added.

The report also noted that new product development initiatives were driven by high volume markets. Specifically highlighting China, India, and the U.S., which the report expects to lead the market through 2028. According to Barla, there’s a strong interest from western OEMs in India as domestic OEMs face challenges. Most OEMs are expected to migrate to the 3 MW configuration with 145-155 m rotors within the next 12 months.

R&D will always retain a big proportion of investments as lower product development costs, flexibility in component sourcing, stronger supplier relationships and increased economies of scale will result in a more cost-effective approach to mass customisation and in turn profits from all markets.