Forthefirsttimesince2004, globalwindturbinedemandisexpectedtocontractthisyear, byasmuchas5%, findsanewstudyfromMAKEConsulting.
ThereportsaystheoveralldecreaseismainlyduetodecliningdemandintheU.S., SpainandItaly - historicallykeywind energy marketswithextensivelocalsupplychains.
Thishascreatedtheneedforcapacityadjustments, whilegrowthopportunitiesinnewandemergingmarketsandthegrowingdemandforlargerwindturbinesrequireadditionalinvestmentduetolocal-contentrequirementsorlogistics.
Fundamentalshiftsinmarketdemandcausedbychangesinsupportpolicies, power-demandprojectionsandoverridingmacroeconomicfactorsarecausingsubstantialcapacityadjustmentsintraditionalwindpowersupplychainmanufacturinghubs, thereportcontinues. Unstablesupportpoliciesinkeywindmarkets, suchastheU.S. andSpain, havealreadyresultedinsignificantredundanciesandfacilityclosuresinthelast12months, havingamajorimpactontheglobalsupplychain. TurbineOEMshavebeguntowithdrawproductioncapacityfromsecondarymarketsandinsteadconcentrateproductionincoremarketswithhighervolumestotakeadvantageofeconomiesofscale.
Atthesametime, thereportsaysaneedforexpansionandnewinvestmentsinthesupplychainiscreatedpartlybygrowthopportunitiesinnewandemergingmarketsassociatedwithlocalizationpolicies - e.g., BrazilandSouthAfrica - andpartlybythecontinueddrivetowardlargeoffshoreandonshorewindturbinesthatrequirethesupplychaintoproducelongerblades, tallertowers, larger-diameterbearingsandmorecomplexcastings.
Accordingtothereport, increasingcompetitionandlowcapacityutilizationresultinlowermargins. Incombinationwithvolatilityindemandandshorteneddemandvisibility, thisisputtingbothturbineOEMsandsuppliers, aswellaslong-heldsourcingstrategies, underpressure. However, MAKEConsultingsaysthisopensawindowofopportunityforinnovationandnewbusinessmodelsintheglobalwindpowersupplychain.
VerticallyintegratedwindturbineOEMsarecontemplatingdivestituresofin-housesupplychainactivities. Hybridsourcingstrategiesandpartnershipsdesignedatstrikingabalancebetweencost, cashflow, securityofsupply, quality, controlofproprietarytechnologyandmarketaccessareontherise. Suppliersarediversifyingtheirbusinessareastoreducedependencyonnewwindturbinedemandandnewsuppliers, andpartnersareenteringthewindindustrywhileothersexit, thereportconcludes.
Fundamentalshiftsinmarketdemandcausedbychangesinsupportpolicies, power-demandprojectionsandoverridingmacroeconomicfactorsarecausingsubstantialcapacityadjustmentsintraditionalwindpowersupplychainmanufacturinghubs, thereportcontinues. Unstablesupportpoliciesinkeywindmarkets, suchastheU.S. andSpain, havealreadyresultedinsignificantredundanciesandfacilityclosuresinthelast12months, havingamajorimpactontheglobalsupplychain. TurbineOEMshavebeguntowithdrawproductioncapacityfromsecondarymarketsandinsteadconcentrateproductionincoremarketswithhighervolumestotakeadvantageofeconomiesofscale.
Atthesametime, thereportsaysaneedforexpansionandnewinvestmentsinthesupplychainiscreatedpartlybygrowthopportunitiesinnewandemergingmarketsassociatedwithlocalizationpolicies - e.g., BrazilandSouthAfrica - andpartlybythecontinueddrivetowardlargeoffshoreandonshorewindturbinesthatrequirethesupplychaintoproducelongerblades, tallertowers, larger-diameterbearingsandmorecomplexcastings.
Accordingtothereport, increasingcompetitionandlowcapacityutilizationresultinlowermargins. Incombinationwithvolatilityindemandandshorteneddemandvisibility, thisisputtingbothturbineOEMsandsuppliers, aswellaslong-heldsourcingstrategies, underpressure. However, MAKEConsultingsaysthisopensawindowofopportunityforinnovationandnewbusinessmodelsintheglobalwindpowersupplychain.
VerticallyintegratedwindturbineOEMsarecontemplatingdivestituresofin-housesupplychainactivities. Hybridsourcingstrategiesandpartnershipsdesignedatstrikingabalancebetweencost, cashflow, securityofsupply, quality, controlofproprietarytechnologyandmarketaccessareontherise. Suppliersarediversifyingtheirbusinessareastoreducedependencyonnewwindturbinedemandandnewsuppliers, andpartnersareenteringthewindindustrywhileothersexit, thereportconcludes.