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China to lead world in wind power O&M expenditure by 2020

Wind power growth to boost global operations and maintenance market to 19bn in seven years with China taking 24.7% market share lead

Siemens wind turbine under maintenance
GlobalData said China will overtake the US to become the world's largest operations and maintenance market, as a result of wind power growth. Image: Siemens

Wind power developments are set to boost the value of the operations and maintenance (O&M) market to USD 19bn by 2020, led by China, new research clams. The O&M market is set to increase from 3bn in 2008, by 16bn, with the BRIC country taking a 24.7 per cent market share of O&M expenditure in the next seven years, research and consulting firm GlobalData reports.

GlobalData's latest report states China will surpass the US, which is currently leading the O&M expenditure market, as a result of wind power growth. The news follows other reports revealing China's lead in the wind power industry. The Worldwatch Institute reported last year that a 43 per cent share of global wind power capacity additions in 2011 came from China.

GlobalData said: "Currently, the US is the largest O&M market in the world, but we expect that China will surpass it to become the leader in operations and maintenance expenditure, with a 24.7 per cent share of the market by 2020."

The report from GlobalData states more than 191GW of wind power capacity was added between 2008 and 2012. This has drastically increased O&M expenditure from USD 3bn to USD 7bn in the same period, demonstrating a Compound Annual Growth Rate (CAGR) of 15.6 per cent.

The report said offshore wind energy will continue to attract higher O&M costs in comparison to onshore wind, reaching a market size of USD 5bn, or a 29 per cent share of the total O&M market in 2020.

Prasad Tanikella, GlobalData senior analyst, said: "Higher turbine maintenance, high logistics costs and a lack of skilled manpower make offshore wind services more challenging than the onshore equivalent. Although onshore wind also faces similar issues, the impact of these factors on the offshore segment is more significant."

According to the report, the growth in the wind industry's O&M cost is largely due to the increasing age of wind turbines and the failure of components such as blades and gearboxes.

"This increase in market size is leading to a rise in the number of companies providing specialised wind turbine O&M services, which is in turn bringing the benefit of lower costs to consumers," said Tanikella.