APAC to lead global wind gearbox and direct-drive equipment markets over next four years, says GlobalData

Asia-Pacific (APAC) is expected to continue to lead the global wind gearbox and direct-drive equipment markets between 2020 and 2024 with a projected market share of 50.7% and 64%, respectively, says GlobalData, a leading data and analytics company.

GlobalData’s latest report, ‘Wind Gearbox and Direct-Drive, Update 2020 – Global Market Size, Competitive Landscape and Key Country Analysis to 2024’, reveals that the dynamic shift towards low carbon modes of power generation, improvements along the supply chain and technology maturity are creating viable business opportunities within the wind power sector.

Emerging economies are beginning to embrace wind, which is driving new installations while prominent markets such as China, the US and EU, with their legacy installations, are creating a significant market for gearbox refurbishments.

The global installations of wind gearbox and direct-drive equipment are estimated to aggregate 221.2GW and 78.1GW, respectively, over the forecast period.

In 2019, the global total installation of wind gearbox stood at 41.2GW as compared to 13GW for direct-drive. Although gearbox will continue leading the market over the forecast period in absolute terms, the direct-drive market is projected to witness higher growth, as they offer lower system weight, higher reliability due to fewer parts, and reduced maintenance, with higher power ratings. The direct-drive market is expected to witness an annual installation of 17.5GW, i.e., 27% of the total installation in 2024.

Nirushan Rajasekaram, Power Analyst at GlobalData, says: “Within APAC, major countries such as China, India and Australia are significantly driving the direct-drive market, with other countries such as Japan, South Korea and Taiwan playing a minor role in supporting the market. Similarly, for wind gearbox equipment, trends in the major markets of China and India will underpin the regional gearbox market, which is estimated to grow at a compound annual growth rate (CAGR) of 7%, over the forecast period.”

China accounted for approximately 38% of the global gearbox market value in 2019. The country is committed towards enhancing its renewable portfolio, to sustain its development agenda and the growing electricity demand, while reducing power sector emissions. However, the market is projected to decline over the forecast period, due to policy changes instituted by the government.

Rajasekaram adds: “India is estimated to be the fastest growing market for gearbox, growing at a CAGR of 19.5% over the forecast period. Similar to China, the government has proposed ambitious renewable energy targets, which are expected to drive the wind equipment market. With respect to the refurbishment market, the large-scale historical installations of wind turbines in China will drive the regional market value for gearbox refurbishment, which is projected to grow significantly over the forecast period.”

However, despite the positive outlook for wind gearbox and direct-drive markets, certain market uncertainties exist. The emergence of other technologies, changing regulatory landscape, and financial constraints threaten the market. Major countries such as China and the US are likely to experience a market slowdown. Nevertheless, opportunities for refurbishment are plenty, owing to legacy turbine installations in the aforementioned countries.

Rajasekaram concludes: “The growing role of smart technologies and other low carbon modes of power generation could result in wind power becoming uncompetitive and thereby limiting its growth prospects. Countries with significant wind capacities are exploring other clean power generation sources, while emerging markets will require the construction of sufficient grid infrastructure to support new generation capacity addition, which could slow the overall market deployment of wind power.”

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