The wind power industry’s rapid expansion has created a massive demand for operation and maintenance (O&M) services, with offshore wind leading the growth. As global capacity surges, maintaining efficiency and reliability becomes critical. This article explores the billion-dollar O&M market, its drivers, and challenges, building on the original analysis from Vu Phong Energy Group. We’ll delve into cost-saving strategies, technological advancements, and opportunities for service providers in both onshore and offshore sectors.
The expansion of the operation and maintenance (O&M) markets for wind power is a direct result of the rapid global growth of wind power. This expansion opens up numerous new opportunities, particularly in the nascent offshore wind power sector.
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Highlighting Record Growth of Wind Power
Alongside solar energy, wind power stands as a vital renewable energy source globally. By the end of 2020, the total installed wind power capacity reached nearly 743 GW, marking an increase of 93 GW compared to 2019. This 53% surge year-on-year signifies a record growth rate, the highest ever recorded in the history of the global wind power industry.
Countries such as China, the United States, Germany, India, Spain, the United Kingdom, France, and Brazil are among the leaders in installed wind power capacity. Notably, China and the United States represent the two most developed markets, accounting for 75% of new wind power plants constructed in 2020. Geographically, beyond the established European market, the Asia-Pacific region is projected to play an increasingly crucial role in driving further wind power growth.
In the ongoing clean energy transition, wind power remains a top choice. Offshore wind power, in particular, demonstrates significant development potential. Despite being in its early stages with a capacity of only 35.3 GW, offshore wind power is experiencing rapid expansion. In 2020, new installations exceeded 6 GW, contributing to a remarkable 106% increase in offshore wind capacity over five years. According to the International Renewable Energy Agency (IRENA), the global offshore wind power market could reach 1,000 billion USD by 2050.
This rapid growth in installed capacity, especially in offshore wind, is a key driver for the expansion of the wind power operation and maintenance market, opening up numerous new opportunities.
Offshore wind power is growing strongly
O&M Offshore Wind Power Expects to Grow 16% Per Year on Average
According to reports from Wood Mackenzie, a specialist in energy industry research and analysis, the offshore wind power O&M market is projected to reach 12 billion USD by 2029, with an average annual growth rate of 16%. China is anticipated to surpass the UK, becoming the world’s largest offshore wind power O&M market, valued at 2 billion USD. Regionally, Europe will remain the largest O&M market, expected to hit 6.6 billion USD by 2029. Additionally, the Asia-Pacific region and the US offshore wind power market will present significant new opportunities. These opportunities within this “billion-dollar” market are poised to benefit both existing and new industry players.
Wood Mackenzie’s study indicates that as wind turbines increase in capacity and advance in design and construction, there is a corresponding demand for more sophisticated and regular wind power maintenance strategies. The growing complexity of turbines and the expanding scale of projects also provide a foundation for developing specialized O&M activities. Wood Mackenzie experts suggest that while manufacturers dedicate more resources to O&M services for newer, higher-capacity turbine models, the maintenance of older, operational turbines creates new avenues for independent service providers and smaller engineering teams.
The global wind power O&M market features many large corporations, such as STEAG (Germany)
The cost reduction in O&M for wind power is significantly aided by the application of digital technology. The deployment of flexible service vessels, unmanned aerial vehicle applications, advanced cameras, and other digital technologies that enable remote management has contributed to a 44% reduction in operating costs (OPEX)/MW over the past eight years. Wood Mackenzie predicts that this cost in the offshore wind power sector will decrease by an average of 20% between 2020 and 2029, driven by the integration of AI and Big Data technologies.
In Vietnam, wind power is currently in its nascent stages of development. Data from Vietnam Electricity Group (EVN) reveals that as of August 3, 2021, 21 wind power plants with a total capacity of 819 MW were commercially operational. Additionally, 106 wind power plants (with a total capacity of 5655.5 MW) had submitted documentation for electricity contracts, grid connection, and trials, seeking Commercial Operation Date (COD) recognition, with commercial operation anticipated before October 31, 2021.
Wind power and other renewable energy sources are prioritized for development, as clearly outlined in the National Energy Development Strategy (Resolution 55 of the Politburo) and the draft of the National Power Development Plan VIII. Consequently, the O&M market growth for wind power in Vietnam is also expected to flourish in the future.
To cater to this evolving market and promote the development of Vietnam’s clean energy industry, Vu Phong Energy Group has partnered with STEAG Energy Services GmbH (Germany), a global energy corporation providing electrical services. This collaboration aims to offer comprehensive technical services, operation and maintenance, and specialized Value Driven Asset Management service packages—including Asset Monitor, Asset Guide, and Asset Pilot—to wind power investors. These renewable energy O&M solutions are designed to optimize plant performance and ensure long-term sustainability.
