Wind Farm Maintenance in China Presents Multibillion-Dollar Opportunity
China is the world’s largest wind market with more than 100 GW of wind capacity. According to research by Bloomberg New Energy Finance (BNEF), operating and maintaining wind turbines will soon cost more than $3 billion per year, creating huge business opportunities for turbine manufacturers and specialist service providers.
Turbine manufacturers typically offer two- to three-year warranties on their turbines, after which wind farm owners must run their turbines through self-service with in-house employees or by outsourcing to a third-party service provider. Chinese-made turbines have historically had much longer warranty periods due to quality concerns.
Many of those warranty periods are finally reaching their end, BNEF reports, adding that the number of turbines coming out of warranty is expected to grow dramatically in the coming years. Specifically, BNEF forecasts that 14–18 GW of wind capacity will come out of warranty annually from 2014 to 2016. That capacity is expected to grow to 26 GW and 30 GW per year in 2017 and 2018, respectively. By 2022, a total of 187 GW of wind turbines in China will be out of manufacturers’ warranty. The quality of turbine manufacturing is improving, so there isn’t as great a need for an extended warranty period.
Although 75 percent of Chinese turbine owners have chosen to maintain their turbines with in-house staff after the end of warranty periods, as owners’ assets grow, in-house O&M management will eventually become unwieldy, and large owners will seek to mitigate operational risk through outsourcing. In five years’ time, BNEF expects in-house maintenance to fall to 50 percent of the total warranty-expired fleet.
To meet the growing demand for outsourced O&M services, more than 90 independent wind farm service providers are already operating in China. However, service quality and technical expertise vary significantly between these service providers. More than two thirds did not exist two years ago, and many with poor expertise and a lack of strong financial backing are likely to exit the market.
Maintenance is seen as the biggest O&M opportunity, followed by maintenance planning tools and condition monitoring systems. Service providers that have existing relationships with vendors and offer high-quality, affordable service will have the most success in this emerging market.
Photo East China Sea offshore wind farm via Shutterstock.
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