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Siemens emerging as the Leader of the Offshore Wind Turbine Market, with massive billion dollar supply contract with leading Danish Offshore Wind Farm Operator Dong

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Offshore Wind Energy

Siemens the giant German industrial conglomerate and which is also the world’s largest Green company has taken a hugeWind Energy lead in the nascent offshore wind turbine market. Note offshore wind energy is emerging as the new engine of growth in the wind turbine industry with all the major WTG suppliers developing turbines to target this market. Siemens, which is already one of the biggest suppliers to the European with 80% marketshare, has managed another colossal supply contract to deliver 300 of its new 6 MW turbines to leading offshore wind farm developer Dong Energy.

Dong Energy which is building offshore wind farms of UK, Denmark and Germany has already used 3.6 MW turbines from Siemens and this new deal indicates confidence in its supplier. Offshore wind energy is also being targeted by shipbuilders from Korea like Hyundai, Daewoo and others as it has synergies with shipbuilding and ocean logistics. China too is trying to promote offshore wind energy, being the only country in Asia to do so though Korea too has plans to award offshore wind farms.

Offshore Wind Turbine Companies

1) Vestas – Vestas the largest Wind Turbine Company in the World has been facing one setback after another. Stiff competition from China, Slowdown in Wind Energy Farms in the West and Wind Blade Problems have formed a perfect storm for this company. However the company is the leading supplier of Offshore Wind Turbines and recently introduced a 5 MW offshore wind turbine with leading offshore wind Danish developer Dong Energy.

2) Siemens – The largest Green Company in the world, Siemens has a strong presence in the Wind Turbine Segment. Along with Vestas, Siemens has supplied more than 80% of the Offshore Wind Turbine to the European offshore wind market till date. Given its huge technological strengths in electrical equipment, power transmission and large project construction, Siemens is looking for a dominant role in the growing offshore wind market .

3) Gamesa (Spain) – Gamesa the Spanish Wind Turbine Producer and Wind Farm Operator has faced the worst year of its history in 2010. Like Vestas and Suzlon, 2010 has been a cruel year for the Wind Industry in the Western Markets and the WTG Players dependent on those markets. Gamesa is leading a massive Spanish Research Effort to develop a colossal 15 MW Turbine meant for the fast growing offshore wind sector. But this is a long term plan with 2020 set as the target for the complete development of this new Turbine. The company has also tied up with Northrop Grumman to target the North American offshore wind market which has massive potential which is zero as of today.

4) Suzlon Energy – is the biggest Indian Wind Energy Company by far with 4-5 Gigawatts of WTG Capacity per year. However Suzlon has languished in red ink since the beginning of the Global Financial Crisis in 2008.However things seem to be turning with a slew of orders particularly by Repower. Suzlon is looking to completely buy out its European Wind Turbine producer Repower. REpower Systems has won a contract from Belgian project development company C-Power to supply 48 turbines of the 6M type for the Thornton Bank offshore wind farm. The turbines have a total rated power generating capacity of approximately 295MW.Note Suzlon is also targeting the Indian offshore wind market which needs to install lots of wind energy to meet its RPS target of 15% by 2020.

Note other major wind turbine makers like Nordex, GE, Sinovel, Goldwind are also developing wind power equipment to target the growing offshore wind farm market.

 Economics of Offshore Wind Energy

1) Wind Turbines and Cost of Steel – Wind Turbines form the biggest cost component of a offshore wind farms. Wind Turbines make between 45-50% of the cost of a Wind Project. Note Wind Turbines are expected to go down in cost with improvement in technology and materials. Larger capacity turbines being deployed will decrease the costs further. Note Wind Turbines of 15 MW  capacity (Gamesa) are in development.

2) Logistics and Foundation Costs – The logistics of transporting Wind Turbine components is much more expensive than transporting over land. Heavy vessels are needed which are not quite mainstream yet so the cost of using heavy cranes and vessels are quite high. Foundation costs are also higher as they have to withstand not only the weight of the huge Wind Turbines but also the pressure from the wave and tidal energies. Foundation costs can range between 15-25%.

3) Electrical Infrastructure – The cables needed to transmit the electricity from the offshore wind turbines to the land based power grid  also leads to higher costs. Note this adds up to the costs and contributed to around 20% of the cost of the offshore wind project. Recently Google and Green Energies agreed to invest in a large transmission network near the eastern coast of the USA which would help in supporting wind farms being built there.

4) Project Finance, Planning Costs – This makes up the rest of the costs. For some projects this can be very high compared to the 7-10% as can be seen from the Cape Wind project which is fighting numerous legal battlers for over 10 years.

Total Costs of a Offshore Wind Park

The cost of an offshore wind park can range between $4.5-5.5 per MW which is much higher than land based wind at around $2 million per MW. However the load factors for offshore wind are higher so they compensate somewhat for the higher capital and operating costs for offshore wind energy. Note the PPAs being signed for offshore wind range of 20-25c/Kwh which is much higher than the 8-10c/Kwh given for onshore wind energy.


Denmark’s DONG Energy DOENRY.UL has agreed to buy 300 giant offshore wind turbines from Germany’s Siemens (SIEGn.DE) for UK wind parks, marking a step forward in efforts to put ever larger units out at sea to boost renewable power output.

The deal is for Siemens’ 6-megawatt turbine, a huge new model for offshore installations, which now is being tested in prototype in Denmark and for which DONG Energy is the German engineering group’s first customer.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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