Technavio’s latest global
“Key findings of this market study predict the wind automation market in EMEA to reach close to USD 808 million by 2020. In Germany, more than 24.5% of the total electricity generated was produced using renewable energy in 2015. Similarly, in the UK, as per the 2009 EU Renewables Directive, the target is to use renewable sources to produce 15% of the total energy generation of the country. This trend is predicted to be emulated in other geographies as well and boost the adoption of automation solutions in the wind power industry over the next four years,” said Bharath Kanniappan, one of Technavio’s lead industry analysts for automation research.
“The wind power market in Africa also finds high investments by large international vendors. For instance, Google announced in 2015 that it would invest in a Lake Turkana wind power project in Kenya. This project is expected to generate close to 1,400 GWh of electricity per year on completion and account for close to 15% of the country’s overall electricity consumption,” added Bharath.
Technavio’s market research study identifies the following three emerging trends expected to propel growth of the global wind automation market:
- Steep growth in the offshore wind market
- Rise in wind energy trade
- Significant increase in technology research investment
Steep growth in the offshore wind market
Manufacturers and operators find it difficult to finance offshore wind farms as costs involved are higher compared to onshore wind farms. Countries worldwide have introduced subsidies and incentives to encourage offshore wind power projects. Worldwide, effective regulatory mechanisms and strong incentive schemes are being introduced to help developers build offshore wind farms. In addition, many governments have pledged close to 20% of their total energy generation through renewable sources. These favorable policies significantly drive the global offshore wind market.
With a high ROI, the global offshore wind power experienced a robust CAGR of around 20% during 2013-2015. With increased focus on offshore wind power globally, the demand for automation solutions from offshore wind power projects is expected to be more in comparison to on-shore wind power projects during the forecast period.
Rise in wind energy trade
Globally, wind energy power source is used as a supplement to coal, hydro, and oil and gas power sources. Owing to its growing popularity, wind installed sites are being used as the only source for electricity in some countries. These nations are not only able to use wind energy to fulfill their domestic demand, but also sell the surplus to other countries.
For instance, on July 9 and 10, 2015, Denmark produced more than 140% of its electricity demand from wind farms. The country then sold 80% of its excess power to Germany and Norway. A portion of it was also sold to Sweden. Denmark was able to achieve this feat due to the adoption of advanced technology, which includes automation solutions such as PLC, SCADA, and DCS, in their wind farms. We estimate that during the forecast period new and improved wind storage technologies will be implemented, and energy trade between different countries will take place in large volumes.
Significant increase in technology research investment
Investments made towards technology research for renewable energy worldwide include money set aside for biopower, geothermal, hydro, ocean power, solar, and wind. Several countries have taken initiatives to increase the use of renewable sources for power generation by 2022 and 2025. Thanks to this trend, the global renewable energy market finds a steep increase in R&D investments in new technology. These investments made towards technology research for renewable energy is expected to grow at a CAGR of 20% during the forecast period.
The wind power accounted for 16%-18% of the overall technology research investment made for renewable energy in 2015. We estimate that investments in the technology research for wind power will grow at a CAGR of 40% during the forecast period. These investments will include research for new and advanced turbines, control systems, advanced substations and wind farms, and new power generation and transmission grid technologies.