GWEC Market Intelligence released the second edition of its annual Wind O&M Service Provider Overview and Database, that shows the global wind O&M service market is poised to experience a significant increase over the next five years.
While the latest market forecast GWEC Market Intelligence predicts a strong 3 percent annual compound growth rate (CAGR) for new wind installations from 2020-2024, the CAGR for the after-sales and service market is projected to be double-digit over the same span.
O&M plays a major role in the advancement of the wind energy industry and the energy transition as it ensures long-term sustainability and growth of wind power worldwide. In addition, after-sales and service sector continues to be an increasingly significant source of revenue for the wind industry.
According to the database, of more than 650 GW of wind power deployed by the end of 2019, around 75 percent of 488 GW is out of warranty, assuming the usual three-year warranty normally provided by OEM wind turbines.
This means that there is a growing demand for O&M services to sustain the existing global wind power fleet in order to keep turbines going and deliver renewable energy around the world.
“As wind power’s installed capacity base continues to grow across the world, the service business is now fully recognised as an increasingly important business opportunity for the wind industry. In fact, leading wind turbine OEMs generate around one-fifth of their revenues from their service business, with profitability in the service business being much higher than new turbine production”.Feng Zhao, strategy director at GWEC.
In general, there are now five major categories of companies actively offering O&M services in the wind sector: wind turbine OEMs; component suppliers; Independent Service Providers (ISPs); Specialised Independent Companies; and Asset Owners.
Wind turbine and component manufacturers use their partnerships with asset owners from the initial equipment sales to market their service packages, but certain asset owners with large fleets have their own in-house O&M services or acquire independent service providers and specialised independent players to deliver these services in order to eliminate their reliance on OEMs. However, turbine suppliers will continue to play a key role in this sector and offer high-quality service solutions, such as efficiency improvements.
“As the O&M service market provides a stable revenue stream, we are seeing a diversification of players involved in the service market. New players are entering the market from outside the wind industry through acquisitions to expand their capabilities and increase their service offering. Although the players and strategies involved in O&M differ regionally and will depend on the maturity and challenges of a certain market, there is a clear trend globally of mergers and acquisitions to better capture and service this growing sector.”Feng Zhao, strategy director at GWEC.
The detailed summary and database provides analysis of key O&M industry developments at global and regional level as well as detailed information on leading players in the global O&M sector, such as type of service provider companies, geographic coverage, year of establishment, type of solutions provided and customers.