With the increasing number of wind power plants operating outside the warranty period, the global wind power services market (GWPSM) is expected to surge exponentially in near future.

Globally, around 280 GW of wind capacity was operating beyond warranty period in 2016 and is expected to reach 620 GW by the end of 2025. It is exposing immense opportunities for wind power service providers—Original Equipment Manufacturers (OEMs) and independent service providers.

The GWPSM is estimated to grow at over 2.5 times generating almost US $25 billion revenue in next nine years from US $9 billion in 2016. Of the total revenue, China alone accounts for almost 40%.

China is a global leader in generating wind power. With almost 95,000 wind turbines, the country is generating over 150 GW electricity at present. It (China) estimates to produce in between 225 GW to 250 GW electricity from wind plants by 2020. And to meet this target, it is currently adding more than one turbines per hour.

China’s aggressive move to produce green energy from wind farm is also pushing demand for the operation and maintenance (O&M) of turbines. This is because large numbers of turbines installed in wind farm have crossed their warranty period and thousands are nearing the warranty period. By the end of 2018, it is predicted that nearly 60 GW of wind capacity in China will reach the end of manufacturers’ warranty.

According to industry report, the cost of O&M of turbines in China is almost US $500 million a year at present. This cost is estimated to reach billions of dollars by 2022 as more wind capacity will come out of warranty period in short and mid-term.

It is the key reason due to which wind power service providers specialized in turbine O&M across the globe are eyeing China as lucrative destinations where they can tap in the growing opportunities.

Although Chinese market of turbine O&M is occupied by domestic market participants, but is expected to change with the growth in the size of assets over the course of time. To address the O&M risk of large assets, outsourcing to specialized OEMs is must. The in-house O&M service providers are not as competent as specialized operations and maintenance service providers and they (in-house O&M) lack strong financial backing, too. Hence, they (domestic market participants) are likely to exit the market in near future.

Subarna Poudel is a researcher with Frost & Sullivan. He can be reached at subarna.poudel@frost.com

Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at sapan.agarwal@frost.com | +603 6204 5830