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Building Offshore Supply Chain in Asia and Taiwan woodmac.com
Trusted Power and Renewables Intelligence woodmac.com
Building an Offshore Supply Chain in Asia and TaiwanGlobal Offshore Wind Summit, Taipei25 April 2019
1
Building Offshore Supply Chain in Asia and Taiwan woodmac.com
Wood Mackenzie offices Wood Mackenzie Power & Renewables offices
Wood Mackenzie is ideally positioned to support consumers, producers and financers of the new energy economy.
� Acquisition of MAKE and Greentech Media (GTM)
� Leaders in renewables, EV demand and grid-connected storage
� Over 500 sector-dedicated analysts and consultants globally, including 75 specifically to power and renewables
� Located close to clients and industry contacts
About Wood MackenzieWe provide commercial insight and access to our experts leveraging our integrated proprietary metals, energy and renewables research platform
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Building Offshore Supply Chain in Asia and Taiwan woodmac.com
Contents
1. Global trends 4
2. Nacelles – turbine OEM positioning 21
3. Blades 26
4. Gearboxes 37
5. Generators 446. Towers 52
7. Converters and controls systems 57
8. Bearing supply 63
9. Castings and forgings 69
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Building Offshore Supply Chain in Asia and Taiwan woodmac.com
Source: Wood Mackenzie
Four fundamental drivers for new supply chain investments
Local content policies (LCP)
Best cost effective countries (APAC)
Offshore demand growth
1
2
3
Industry 4.0 4
LCP are attracting new investments, as turbine OEMs and component suppliers queue up these markets to win market share . Examples include Turkey, Russia, Argentina with Vestas, SGRE, Nordex, GRI, Ruselprom, CS Wind, Windar all setting up facilities in those markets
Supply chain migration to best cost countries is not a new phenomenon, but has intensified as companies further exploit the cost saving and volume potential achieved by relocating production resources into these countries, with an aim to serve both domestic and export markets
Offshore CAGR >20% over the next decade warrants new supply chain investments to comply with LCP and lower landed cost of strategic componentsFew examples- New investments/expansion in France, China and Taiwan from GE/LM , SGRE , MHI Vestas , MingYang, Sewind, Envision
To improve the productivity and lower costs, companies will focus on industry 4.0 initiatives such as digitizing existing brownfield sites, exploiting information and communication technologies, mass custom production, and smart automation.
4
Building Offshore Supply Chain in Asia and Taiwan woodmac.com
Source: Wood Mackenzie
Taiwan will emerge as the fourth largest offshore market in world
15 3050 10
0.10
South Korea
0.64
Belgium
Germany
Japan
United Kingdom
2.98
DenmarkIreland
United States
Sweden0.86
EstoniaLithuania
Netherlands
France
1.20
2.46
Turkey
India
7.19
29.59
Finland
0.50
1.70
16.112.78
0.200.14
9.71
8.73
4.93
Norway
0.50
Poland
2.09
ChinaTaiwan
8.01
43.4GW
47.3GW
16
5
12
4
21
0
6
3
7
15
8
109
11
1314
(GW)
´17 ´18e ´22e´19e ´20e ´21e ´23e ´24e ´25e ´26e ´27e
20.6%
North America Southern EuropeNorthern Europe Western EuropeEastern Europe China Asia Pacific (Excl. China)
China & UK dominate, following by USA, Taiwan, Netherlands and Germany
Offshore market forecasts: 2017-2027eOffshore top 20 markets: New capacity ‘18e-‘27e
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Building Offshore Supply Chain in Asia and Taiwan woodmac.com
Global wind demand remains robust with over US $540bn opportunity through 2027Top line revenue growth assured despite mounting price pressures on turbine supply chain
125
115
69
41
29
31
0 20 40 60 80 100 120 140
Main Bearings
Gearboxes
Converters
Market potential 2019-2027e (USD bn)
Blades
Towers
Generators
60%
35%
86%
53%
49%
84%
40%
65%
14%
47%
51%
16%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Main bearings
Blades
100%
Gearboxes
Towers
Converters
Generators
Top 5 RestSource: Wood Mackenzie
Market share split for critical components 2018e
Note: The other components like Hub, balance of nacelle contribute to USD 128bn, not listed in the above chartSource: Wood Mackenzie
Market potential for wind supply chain 2018-2027eFuture share concentration
Increase Decrease Similar
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Building Offshore Supply Chain in Asia and Taiwan woodmac.com
Source: Wood Mackenzie
Supply chain continues to drift to best cost countries to exploit cost-out potentialInvestment in existing facilities for high cost countries is attributed to technology transitions
5%
5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
57%
35%
16%
55%
New
100%
45%
Expansion
76%
New
14%
New
10%
100%
New New
100%
54%
100%
15%
26%
33%
Expansion
10%
New
13%
22%
100%
Expansion
78%
49%
70%
12%
18%
ExpansionExpansion Expansion
82%
New Expansion
100%
Best cost countries OffshoreLCP countries High cost countries
Nacelles Blades Towers Gearbox Generator Converter Bearings
Manufacturing capacity by component and location type
Best cost countries: China, India, Thailand, Malaysia, Spain, Poland, Portugal, Bosnia , MexicoLCP countries: Argentina, Australia, Brazil, Egypt, Morocco, Russia, Taiwan, TurkeyOffshore countries: Germany, France UKHigh cost countries: US, Finland
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Building Offshore Supply Chain in Asia and Taiwan woodmac.com
China, UK and Germany will be large offshore manufacturing hubs due to market sizeOnshore facilities will be leveraged for components not challenged by expensive logistics
0 10,000 20,000 30,000
Netherlands
Taiwan
MW
Belgium
China
Germany
United Kingdom
United States
France
Denmark
South Korea
Nacelles Blades Gearboxes Generators Towers Converters Main bearings
Operational facilities Under construction / Potential Onshore facilities retooling
Offshore market cumulative installs 2018-2027e
Source: Wood Mackenzie Source: Wood Mackenzie
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Building Offshore Supply Chain in Asia and Taiwan woodmac.com
Turbine OEMs leverage Western/Taiwanese expertise to establish Taiwan offshore supplyFiT cuts will prove challenging to supply chain investments, as developers renegotiate supply contracts
SGRE MHI Vestas Hitachi
Nacelles SGRE Hitachi
Hubs Jupiter Bach
Blades Tien Li
Resins/ Composites Swancor Swancor / Formosa
Towers CS Wind – Chin Fong
CSMC / CS Wind –Chin Fong
Generators The Switch / TECO
Converters/Controls KK Wind
Steel / Steel components
Yeong Guan / AH industries / RMG Steel
China Steel Corporation
Yaw motors TECO
Cooling systems Nissens
Foundations Jan De Nul
Cable / Cable accessories
Sinbon / Ta Ya/ Walsin Lihwa
Source: Wood Mackenzie
Taiwan supply chain matrix
Source: Wood Mackenzie
Taiwan offshore turbine OEMs market share forecasts2019e-2025e
Existing contracts/ announcements Potential for future investments
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2019e ’23e’20e ’21e ’22e ’24e ’25e
Hitachi MHIVestas SGRE
9
Building Offshore Supply Chain in Asia and Taiwan woodmac.com
Source: Wood Mackenzie
Turbines and foundations offer over $15 billion market potential in TaiwanNo local content requirements for projects beyond 2024, will result in a bumpy road for the industry
2,5000 1,500500 1,000 2,000 3,000
Generators
Market potential 2019e-2027e (USD Million)
Blades
Towers
Hub and Pitch
Bearings and shaft
Gearboxes
Converters
Bed plate
Balance of nacelle
Note: The market potential is calculated based on projects to be commissioned from 2019 through 2027. However the local content requirements are applicable for projects from 2021-2024
4,000 01,0002,0006,000 3,0005,000
Market potential 2019e-2027e (USD Million)
Cables
Foundations
AC substation
HV DC converter station
Collector substation
HV Array switch
Turbine Balance of plant supply Turbine supply
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Building Offshore Supply Chain in Asia and Taiwan woodmac.com
Country Players Future trend / Comments
DenmarkSGRE Likely to shift capacity to UK
MHI Vestas Shifted 1 V164 mould to UK in late 2018
FranceLM / GE Facility retooling to accommodate LM
107m blades
SGRE Round I / II won on industrialization
United Kingdom
SGRE Capacity expansions on new mould types, but BREXIT implications unclear
MHI Vestas Expanding capacity
US / Canada LM / GE Good case if GE wins in US
Taiwan Tien Li Tieup with MHI Vestas for Taiwan
China
Sinoma-LZ Closely linked to Goldwind success
MingYang Establishing a new facility in Guangdong to serve emerging offshore
Aeolon Increasing presence in offshore
LM Renewed focus on Chinese offshore
TPI Scouting for offshore opportunities
Asian Offshore markets offer potential for independent suppliers to scale upSGRE / MHI Vestas expand in Europe, while independent suppliers will leverage growth in Asian markets
0
1
2
3
4
5
6
Independent
Offs
hore
bla
de p
rodu
ctio
n (G
W)
In-house In-house Independent
+80%+203%
GE
SGREMHI Vestas
MingYangLMSinoma-LZ
AeolonTPITien Li
Source: Wood Mackenzie
New / capacity expansions driven by turbine OEMs positioning
Source: Wood Mackenzie
Global offshore blade production volume 2018 vs 2022e
2018 2023
11
Building Offshore Supply Chain in Asia and Taiwan woodmac.com
Contact us
Source: Wood Mackenzie
Mark A. HutchinsonHead of APAC Power & Renewables ConsultingWood MackenzieT +66 81 860 7010E [email protected]
12
Building Offshore Supply Chain in Asia and Taiwan woodmac.comA SELECTION OF RECENT ANALYSIS FROM GTM RESEARCH
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Wood Mackenzie™, a Verisk business, is a trusted intelligence provider, empowering decision-makers with unique insight on theworld’s natural resources. We are a leading research and consultancy business for the global energy, power and renewables,subsurface, chemicals, and metals and mining industries. Formore information visit: woodmac.com
WOOD MACKENZIE is a trademark of Wood Mackenzie Limited and is the subject of trademark registrations and/orapplications in the European Community, the USA and other countries around the world.