Figure 3: Key European Nacelle Assembly Capacity Shift, 2007–2010
20%
0%
0%
29%
0%
80%
Significant investment in Colorado
100%
Adding capacity in Kansas … entering China
71%
Entering US market with Arkansas plant
17% 20% 31%
12% 19%
22%
63% European Union Source: MAKE Consulting.
the offshore segment with capacity expansions in the UK, Norway, Sweden and Germany. Mitsubishi has signed a memorandum of understanding with the UK government in terms of an offshore technology development site. European supply capacity investments will therefore mainly take place in coastal regions, where the wind power markets are gaining strength.
Restructuring Likely to Build Scale and Leverage Experience
European WTG OEMs are building up the supply chain in both the Americas and Asia Pacific based on market potential in both regions, which will lead to a lower degree of export from Europe. This is especially the case for Northern Europe, where capacity will most likely be focused on the offshore segment. This scenario, combined with relatively low onshore growth rates in the region, puts pressure on the Northern European supply chain. The offshore segment is set to play an increasingly important role in Northern Europe and the future supply chain is likely to be heavily based around the offshore segment, with significant inevitable reduction in overall capacity. Successful penetration of the offshore wind segment is associated with higher entry barriers for suppliers in terms of track record, technology, know-how, quality and comparably higher risks. Those that successfully make the transition will have to invest in dedicated production lines and facilities. Investment in new capacity will mainly be in coastal regions. Others will follow the demand and follow clients, mostly to the Americas, in order to localise cost, reduce operating and transportation costs and improve lead times. This will enable them to compete on equal terms with local suppliers.
Conclusion
Limited international experience among North European suppliers and high offshore entry barriers may lead to a restructuring of the Northern European supply chain in the pursuit of scale and developing a global footprint. There is likely to be an increasing activity level in mergers and acquisitions, joint ventures and strategic alliances or cooperation to overcome barriers to growth. n
MODERN ENERGY REVIEW – VOLUME 2 ISSUE 2
57% Asia Pacific The Americas
59%
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