global offshore wind summit, taipei · 2019-09-27 · 2 buildingoffshoresupplychaininasiaandtaiwan...

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Building Offshore Supply Chain in Asia and Taiwan woodmac.com

Trusted Power and Renewables Intelligence woodmac.com

Building an Offshore Supply Chain in Asia and TaiwanGlobal Offshore Wind Summit, Taipei25 April 2019

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Contents

1. Global trends 4

2. Nacelles – turbine OEM positioning 21

3. Blades 26

4. Gearboxes 37

5. Generators 446. Towers 52

7. Converters and controls systems 57

8. Bearing supply 63

9. Castings and forgings 69

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Source: Wood Mackenzie

Four fundamental drivers for new supply chain investments

Local content policies (LCP)

Best cost effective countries (APAC)

Offshore demand growth

1

2

3

Industry 4.0 4

LCP are attracting new investments, as turbine OEMs and component suppliers queue up these markets to win market share . Examples include Turkey, Russia, Argentina with Vestas, SGRE, Nordex, GRI, Ruselprom, CS Wind, Windar all setting up facilities in those markets

Supply chain migration to best cost countries is not a new phenomenon, but has intensified as companies further exploit the cost saving and volume potential achieved by relocating production resources into these countries, with an aim to serve both domestic and export markets

Offshore CAGR >20% over the next decade warrants new supply chain investments to comply with LCP and lower landed cost of strategic componentsFew examples- New investments/expansion in France, China and Taiwan from GE/LM , SGRE , MHI Vestas , MingYang, Sewind, Envision

To improve the productivity and lower costs, companies will focus on industry 4.0 initiatives such as digitizing existing brownfield sites, exploiting information and communication technologies, mass custom production, and smart automation.

4



Taiwan will emerge as the fourth largest offshore market in world

15 3050 10

0.10

South Korea

0.64

Belgium

Germany

Japan

United Kingdom

2.98

DenmarkIreland

United States

Sweden0.86

EstoniaLithuania

Netherlands

France

1.20

2.46

Turkey

India

7.19

29.59

Finland

0.50

1.70

16.112.78

0.200.14

9.71

8.73

4.93

Norway

0.50

Poland

2.09

ChinaTaiwan

8.01

43.4GW

47.3GW

16

5

12

4

21

0

6

3

7

15

8

109

11

1314

(GW)

´17 ´18e ´22e´19e ´20e ´21e ´23e ´24e ´25e ´26e ´27e

20.6%

North America Southern EuropeNorthern Europe Western EuropeEastern Europe China Asia Pacific (Excl. China)

China & UK dominate, following by USA, Taiwan, Netherlands and Germany

Offshore market forecasts: 2017-2027eOffshore top 20 markets: New capacity ‘18e-‘27e

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Global wind demand remains robust with over US $540bn opportunity through 2027Top line revenue growth assured despite mounting price pressures on turbine supply chain

125

115

69

41

29

31

0 20 40 60 80 100 120 140

Main Bearings

Gearboxes

Converters

Market potential 2019-2027e (USD bn)

Blades

Towers

Generators

60%

35%

86%

53%

49%

84%

40%

65%

14%

47%

51%

16%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Main bearings

Blades

100%

Gearboxes

Towers

Converters

Generators

Top 5 RestSource: Wood Mackenzie

Market share split for critical components 2018e

Note: The other components like Hub, balance of nacelle contribute to USD 128bn, not listed in the above chartSource: Wood Mackenzie

Market potential for wind supply chain 2018-2027eFuture share concentration

Increase Decrease Similar

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Supply chain continues to drift to best cost countries to exploit cost-out potentialInvestment in existing facilities for high cost countries is attributed to technology transitions

5%

5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

57%

35%

16%

55%

New

100%

45%

Expansion

76%

New

14%

New

10%

100%

New New

100%

54%

100%

15%

26%

33%

Expansion

10%

New

13%

22%

100%

Expansion

78%

49%

70%

12%

18%

ExpansionExpansion Expansion

82%

New Expansion

100%

Best cost countries OffshoreLCP countries High cost countries

Nacelles Blades Towers Gearbox Generator Converter Bearings

Manufacturing capacity by component and location type

Best cost countries: China, India, Thailand, Malaysia, Spain, Poland, Portugal, Bosnia , MexicoLCP countries: Argentina, Australia, Brazil, Egypt, Morocco, Russia, Taiwan, TurkeyOffshore countries: Germany, France UKHigh cost countries: US, Finland

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China, UK and Germany will be large offshore manufacturing hubs due to market sizeOnshore facilities will be leveraged for components not challenged by expensive logistics

0 10,000 20,000 30,000

Netherlands

Taiwan

MW

Belgium

China

Germany

United Kingdom

United States

France

Denmark

South Korea

Nacelles Blades Gearboxes Generators Towers Converters Main bearings

Operational facilities Under construction / Potential Onshore facilities retooling

Offshore market cumulative installs 2018-2027e

Source: Wood Mackenzie Source: Wood Mackenzie

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Turbine OEMs leverage Western/Taiwanese expertise to establish Taiwan offshore supplyFiT cuts will prove challenging to supply chain investments, as developers renegotiate supply contracts

SGRE MHI Vestas Hitachi

Nacelles SGRE Hitachi

Hubs Jupiter Bach

Blades Tien Li

Resins/ Composites Swancor Swancor / Formosa

Towers CS Wind – Chin Fong

CSMC / CS Wind –Chin Fong

Generators The Switch / TECO

Converters/Controls KK Wind

Steel / Steel components

Yeong Guan / AH industries / RMG Steel

China Steel Corporation

Yaw motors TECO

Cooling systems Nissens

Foundations Jan De Nul

Cable / Cable accessories

Sinbon / Ta Ya/ Walsin Lihwa


Taiwan supply chain matrix


Taiwan offshore turbine OEMs market share forecasts2019e-2025e

Existing contracts/ announcements Potential for future investments

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2019e ’23e’20e ’21e ’22e ’24e ’25e

Hitachi MHIVestas SGRE

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Turbines and foundations offer over $15 billion market potential in TaiwanNo local content requirements for projects beyond 2024, will result in a bumpy road for the industry

2,5000 1,500500 1,000 2,000 3,000

Generators

Market potential 2019e-2027e (USD Million)

Blades

Towers

Hub and Pitch

Bearings and shaft

Gearboxes

Converters

Bed plate

Balance of nacelle

Note: The market potential is calculated based on projects to be commissioned from 2019 through 2027. However the local content requirements are applicable for projects from 2021-2024

4,000 01,0002,0006,000 3,0005,000

Market potential 2019e-2027e (USD Million)

Cables

Foundations

AC substation

HV DC converter station

Collector substation

HV Array switch

Turbine Balance of plant supply Turbine supply

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Country Players Future trend / Comments

DenmarkSGRE Likely to shift capacity to UK

MHI Vestas Shifted 1 V164 mould to UK in late 2018

FranceLM / GE Facility retooling to accommodate LM

107m blades

SGRE Round I / II won on industrialization

United Kingdom

SGRE Capacity expansions on new mould types, but BREXIT implications unclear

MHI Vestas Expanding capacity

US / Canada LM / GE Good case if GE wins in US

Taiwan Tien Li Tieup with MHI Vestas for Taiwan

China

Sinoma-LZ Closely linked to Goldwind success

MingYang Establishing a new facility in Guangdong to serve emerging offshore

Aeolon Increasing presence in offshore

LM Renewed focus on Chinese offshore

TPI Scouting for offshore opportunities

Asian Offshore markets offer potential for independent suppliers to scale upSGRE / MHI Vestas expand in Europe, while independent suppliers will leverage growth in Asian markets

0

1

2

3

4

5

6

Independent

Offs

hore

bla

de p

rodu

ctio

n (G

W)

In-house In-house Independent

+80%+203%

GE

SGREMHI Vestas

MingYangLMSinoma-LZ

AeolonTPITien Li


New / capacity expansions driven by turbine OEMs positioning


Global offshore blade production volume 2018 vs 2022e

2018 2023

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Contact us


Mark A. HutchinsonHead of APAC Power & Renewables ConsultingWood MackenzieT +66 81 860 7010E [email protected]

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Wood Mackenzie™, a Verisk business, is a trusted intelligence provider, empowering decision-makers with unique insight on theworld’s natural resources. We are a leading research and consultancy business for the global energy, power and renewables,subsurface, chemicals, and metals and mining industries. Formore information visit: woodmac.com

WOOD MACKENZIE is a trademark of Wood Mackenzie Limited and is the subject of trademark registrations and/orapplications in the European Community, the USA and other countries around the world.

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global offshore wind summit, taipei · 2019-09-27 · 2 buildingoffshoresupplychaininasiaandtaiwan...

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