What is Wind Power?
Wind power is a major contributor to the world’s shift towards utilising renewable energy sources. We’ve all seen wind turbines anywhere we go, whether it be travelling through the countryside, flying over an ocean or simply visiting a farm; wind power has already made a great, omnipresent impact on our environment.
A Short Video Explaining How Wind Turbines Work
Global Wind Power Market
Wind power is at the forefront of renewable energy globally, recently becoming the leading source, generating over 2,100 terawatt-hours of energy[i]. China came through with the highest increase in wind power, accounting for 40% across the globe, producing around 460.6GW of energy. This is followed by the US, accounting for 22% in growth, worth around 162GW of power[ii].
Precedence Research valued the global wind energy market at USD 81.31 billion in 2022, forecasting a CAGR of 10.1% until 2032, reaching a value of USD 212 billion[iii].
The Global Wind Energy Council (GWEC) provides the main reasons for the increase in wind power development[iv]:
- The Russia-Ukraine war allowed energy reform in Europe, where many countries were dependent on Russia for oil. The need for energy security upon the invasion was heavily stressed, hence the push towards replacing fossil fuel sources with more modern clean energy alternatives.
- China’s commitment to expanding the role of renewables in its energy infrastructure.
- The USA’s passage of the Inflation Reduction Act in 2022, which introduces plans to heavily invest in domestic energy production in a bid to promote clean energy.
Despite the mass advancement in wind energy and renewable energy in general, the International Energy Association warns that the average annual generation growth rate must increase to about 17% to complete the goal of net zero emissions by 2050[v], envisaging an output of 7400TWh of wind energy. With major countries determination to slow down climate change, the advancement of technology and social bid for environmental friendliness, this is certainly an achievable target.
Global Key Players
The largest wind turbine manufacturer is the Danish company, Vestas. They are crowned as the global partner in sustainable energy sources; designing, manufacturing, installing and servicing over 166GW onshore and 8.5GW offshore turbines in 88 countries, representing over 16% of global wind power output[vi]. Vestas posted revenues of EUR 14.5 billion in 2022, with similar revenues in the 2 years prior. 72% of this revenue generated is attributed to their onshore turbine production[vii].
The merger of Siemens Wind Power and Gamesa brought about the second largest wind turbine manufacturer in the world, Siemens Gamesa, having over 50,000 turbines installed in 90 countries[viii]. These turbines provide over 130GW of wind power around the world, outputting enough energy to power 110 million households every year[ix]. The company posted annual revenues of EUR 9.8 billion in 2022, with an additional EUR 34.6 billion in order backlog[x]. Evidently, Siemens Gamesa is clear proof of a successful merger within the clean energy sector.
Typical customers of these wind turbines include utilities companies, governments, private residential customers and industrial companies.
UK Wind Power Market
Akin to many other developed countries, the UK is no different in its attempts to strive for protect our planet through renewable energy usage. In 2022, Britain installed approximately 3 gigawatts of offshore wind capacity[xi]. The market was estimated to have a revenue value of GBP 5 billion in 2022, representing a CAGR of 11.7% over 5 years[xii]. In the same year, the UK had an installed wind power capacity of 52.42GW; 13.45GW offshore, with the aim to produce 50GW worth of offshore power by 2035[xiii].
The increasing demand for offshore wind energy can be visualised below[xiv]:
Some notable demand drivers of wind energy usage in the UK include government grants, such as the GBP 30 million injection to capture and store more energy[xv] and their GBP 265 million subsidy offer to renewable energy developers[xvi]. Other factors include declining costs, social persuasion in fighting against climate change and technological advances in wind turbine design & manufacturing.
UK Target Companies
JCinus Partners has analysed & target five of the best wind energy startup businesses striving to revolutionise the sector and contribute to the world’s positive emphasis on ESG.
Company F
This series A company is a manufacturer and supplier of the qr6 Vertical Axis Wind Turbine. Based in Cambridge, founded in 2005, the company has received EUR 7 million in funding across one round. This funding has allowed the company to increase development and has enabled them to take on top-tier customers to install wind turbines at the likes of the London Olympic Stadium and at Welsh government offices in Aberystwyth.
Company J
Founded in 1986, this company has a strong track record of providing customers with wind turbine and tower manufacturing services & solutions. Based in Belfast, Northern Ireland, the HSQE-certified company offers an abundance of aid in the maintenance of towers and wind turbines, including inspections, lifting equipment, PPE, fall protection systems, rope access solutions, safety walkways & roof covers, suspended access equipment and design & installation packages.
Company R
This business strives to improve wind farm operations through its artificial intelligence monitoring platform. The platform provides users with constant insights featuring wind turbine performance and component health without the need for any extra hardware – a highly useful tool for any wind farm operator. The company is currently backed by two sustainable venture capital firms.
Company S
Company S plans to completely modernise the wind power industry at the forefront of developing the next generation of wind turbines. Built by three renewable energy researchers, their turbines drastically improve cost effectiveness, enhance efficiency of maintenance and provide a strong energy yield. Their technological components are much smaller than those in traditional wind turbines, allowing for easy manufacturing, transportation and installation. Only being incorporated in 2021, the business has managed to raise GBP 250,000 worth of funding in one round.
Company Y
In the world’s need to drive renewable energy to its absolute limits, there needs to be a system in place to drive transactions between these companies and their investors. Company Y has designed and deployed a secure, online platform for renewable energy operators and investors to collaborate and partner with each other. The system can be used by developers, investors and lenders to find investment opportunities and project deal flows from over 2,000 project developers. This seed company has raised GBP 625,000 across two rounds.
Appendix
- [i] https://www.iea.org/energy-system/renewables/wind
- [ii] https://www.evwind.es/2023/01/14/countries-that-produce-the-most-wind-energy/89725#:~:text=%231%20China&text=China%20ranks%20%231%20on%20our,capacity%20of%20almost%20329%20GW.
- [iii] https://www.precedenceresearch.com/wind-energy-market
- [iv] https://gwec.net/globalwindreport2023/
- [v] https://www.iea.org/energy-system/renewables/wind
- [vi] https://www.vestas.com/en#:~:text=Vestas%20is%20the%20energy%20industry’s,wind%20power%20than%20anyone%20else.
- [vii] file:///C:/Users/camer/Downloads/Vestas%20Annual%20Report%202022.pdf
- [viii] https://www.siemensgamesa.com/en-int/about-us/company-history
- [ix] https://www.siemensgamesa.com/en-int/about-us
- [x] https://www.siemensgamesa.com/en-int/-/media/siemensgamesa/downloads/en/about-us/siemens-gamesa-renewable-energy-company-presentation-en.pdf?ste_sid=fcb537e4a5fc17283b98d5fe5c9d9978
- [xi] https://www.iea.org/energy-system/renewables/wind
- [xii] https://www.ibisworld.com/united-kingdom/market-research-reports/wind-power-generation-industry/
- [xiii] https://www.nationalgrid.com/stories/energy-explained/how-much-uks-energy-renewable
- [xiv] https://www.statista.com/statistics/556242/offshore-wind-used-for-electricity-heat-uk/
- [xv] https://www.gov.uk/government/news/30-million-government-boost-to-capture-and-store-more-renewable-energy
- [xvi] https://www.theguardian.com/environment/2021/sep/13/uk-to-offer-265m-in-subsidies-for-renewable-energy-developers
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