Apr 24, 2025 (MarketLine via COMTEX) --
The fragmentation of the wind turbine supply chain poses an existential threat to global wind power expansion.
Wind power is increasingly occupying space in the global energy mix, and supply chains for turbine components are growing in tandem.AA
Both public and private investment has been funnelled into the technology as part of the energy transition while traditional energy companies, including oil and gas giants such as TotalEnergies and Equinor, have invested in wind to diversify their portfolios.AA
By 2028, global wind turbine installation, both onshore and offshore, is predicted to reach 760.20GW, up from 119.86GW in 2023, according to Power TechnologyaEUR(TM)s parent company GlobalData.A
However, the industryaEUR(TM)s supply chain poses a potential hurdle to these ambitions, as the construction of wind turbines requires a range of materials including steel, fibreglass and rare earth elements (REEs), all of which are dominated by China.A
The wind turbine manufacturing supply chain by component, demonstrating China's dominance. Credit: GlobalData Power Intelligence Centre.Recent geopolitical developments led by US President Donald TrumpaEUR(TM)s trade war and macroeconomic headwinds have exacerbated the complexities of these supply chains for manufacturers globally.A
Indeed, in December 2024, wind developer A~rsted?cited supply chain bottlenecks as a key reason for opting out of DenmarkaEUR(TM)s offshore wind farm tender in the North Sea, which received no bids overall.AA
Only two months later, in February, Mitsubishi paused its plans for offshore wind projects in Japan, pointing to supply chain issues once again.AA
For the industry to maintain its upward trajectory, securing supplies of wind turbine components is crucial. Diversification through alternative materials and near-sourcing are key risk management strategies for wind manufacturers to futureproof their place in the energy transition. A
Steel in wind turbinesSteel serves as the backbone of wind development, constituting up to 90% of a turbineaEUR(TM)s mass. As such, the health of the global steel supply chain is of major importance to wind manufacturers.AA
According to the World Steel AssociationaEUR(TM)s most recent data, the start of 2025 has seen a year-on-year decrease in global steel production from 2024.A
Uncoincidentally, the market is undergoing a period of extreme volatility, most notably making headlines as part of President TrumpaEUR(TM)s tariffs.AA
On 12 March, a 25% tariff on US imports of steel, aluminium and other derivative products went into effect. Both the EU and Canada announced retaliatory tariffs of 25% each, but the EUaEUR(TM)s plans have since been paused until July.AA
At the nexus of the trade war and the use of steel as a bargaining chip is China, which dominates both global steel production and wind power manufacturing as a whole, undercutting global competition with cheap and heavily subsidised exports in what the Centre for Strategic and International Studies (CSIS) calls aEURoethe Chinese overcapacity problemaEUR.AA
ChinaaEUR(TM)s dominance is nothing new in the wind industry, but the tariffs on steel have brought into sharper focus the need for supply chain diversification as a shield against geopolitical stressors.AA
aEURoeChina is a powerhouse nobody can get around, but it's not about pitting countries or regions against each other," explains Markus Zeitzen, wind energy service provider Det Norske Veritas (DNV) ESG senior business development manager. "Selecting two or three suppliers from different areas can give you resilience in your supply chain through competition.aEURA
Speaking to Power Technology alongside Zeitzen, DNV global head of sustainability and ESG services Christopher Lilholm adds that aEURoeit is increasingly important to look at the sustainability performance of the steel that goes into the turbinesaEUR.A
Indeed, low-carbon steel, also known as aEUR~green steelaEUR(TM), has become another consideration for wind turbine manufacturers looking to reduce their emissions. It is produced through technologies such as direct reduced iron, electric furnaces and green hydrogen.AA
While these developments are necessary to address the emissions-intensive production process of steel, this inevitably adds additional costs and complications in the supply chain, particularly as there are currently no universal standards for green steel.AA
aEURoeEven steelmakers find it hard to label their products correctly,aEUR says Lilholm. aEURoeSo, for a turbine maker to navigate communicating that to clients is not easy, but it will be essential.aEURA
Alternative materials to steel continue to gain traction, such as wood, which is attractive both for its superior sustainability and widespread availability. Since securing an EU grant of Skr69m ($7.3m) in 2020, Swedish start-up Modvion has been developing wooden turbine towers that can reach taller heights than steel equivalents due to less material being required.AA
However, steel is only one branch of the turbine supply chain that manufacturers must negotiate.A
Fibreglass in wind turbinesFibreglass is a key component in turbine blades, nacelles and hub covers and is arguably the strongest tier of the turbine supply chain.AA
According to industry association Glass Fibre Europe, due to the materialaEUR(TM)s raw mineral components, which include silica sand, kaolin clay, limestone and dolomite, aEURoethere is no risk of supply shortages or over-reliance on concentrated sourcesaEUR.
However, fibreglass also faces excess capacities from Chinese producers. On 19 March, the EU imposed anti-dumping duties of between 26.3% and 56.1% on imports of glass fibre yarns from China, citing the importance of the material in the EUaEUR(TM)s aEURoeclean tech supply chainsaEUR and green transition.A
For World Wind Energy Association secretary-general Stefan GsAnnger, the main challenge in fibreglass supply for wind energy is aEURoerecyclability and how fast the recycled material can re-enter the marketaEUR.
The life cycles of fibreglass and the epoxy resins that coat turbine blades remain a sticking point for the wind industryaEUR(TM)s environmental footprint. The complex layers in the chemical compounds are difficult to separate, leading to landfilling and resource waste.AA
Several wind turbine manufacturers are exploring the possibilities of recycling fibreglass to further boost supply chain resilience.AA
US-based Carbon Rivers uses pyrolysis technology to recover glass fibre that can be remelted, closing the material loop and securing supply for manufacturers while reducing dependence on volatile material prices. Wind giants such as A~rsted?and ENGIE have also successfully recycled turbine blades from specific projects, but this has yet to be achieved at scale across the industry.AA
Wind Europe senior supply chain analyst Lizet Ramirez confirms that aEURoealternative technologies and materials require a big push to be ready on the scale that we need themaEUR.A
aEURoeQuality assurance is also essential in recovering and reintroducing materials," she adds.A
Another consideration is the impact of the innovation race on supply and demand, as Zeitzen explains. aEURoeOver the last few years, turbine components have gotten bigger, but if you innovate constantly, you overburden your supply chain, as well as research and development and asset lifespan. We are seeing several turbo manufacturers slow down for security,aEUR she says.A
REEs and the future of turbine supply chainsOut of the 17 classified REEs, four are primarily used in wind turbines: neodymium, praseodymium, dysprosium and terbium. These are essential in producing neodymiumaEUR"ironaEUR"boron permanent magnets that generate electricity and maintain the integrity of a turbineaEUR(TM)s walls.AA
China dominates this supply chain too, controlling 60% of global REE mined production and roughly 90% of global processing output. Ramirez confirms that aEURoethere is a near total reliance on China for permanent magnets and limited alternative supply routes availableaEUR.
In December 2023, China initiated an export ban on separation and extraction technologies for manufacturing permanent magnets, which has escalated to export controls on seven REEs, announced in April this year.AA
The impact of this on REE supply chains for wind turbine manufacturing has yet to become clear given the to-and-from nature of the US-China trade war, but Ramirez highlights global shifts towards proactive and preventative supply chain risk management.AA
aEURoeFor example, the EU is investing in innovations to secure critical raw materials. From the recently announced 47 strategic projects, five are dedicated to REEs and permanent magnets. This is good news for the wind industry in making the most of domestic resources and building new partnerships,aEUR she confirms.A
With such policy support, near-sourcing key materials can become more of a reality for turbine manufacturers outside of ChinaaEUR(TM)s monopoly, which also covers copper and aluminium.AA
However, Lilholm points out that competition for access is the ultimate issue: aEURoeDo wind developers have the economic gravity to purchase supplies over other sectors?aEURA
Investment in diversified materials and supply chains is pivotal aEUR" especially as high demand for materials from major industries such as construction and automotives relegates wind turbine manufacturing to relative unimportance in times of strained supply. A
GsAnnger identifies solar energyaEUR(TM)s aEURoeamazingaEUR development and supply chain as a model for the wind industry to look to, adding that aEURoewe need the markets because supply chains and manufacturing follow where the markets areaEUR.
aEURoeThis is really where the wind industry needs to grow up,aEUR asserts Zeitzen. aEURoeIt is time to look deep into the entire supply chain.aEURA
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COMTEX_464874558/2227/2025-04-24T09:34:20
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