Between 2009 – 2011, we were spoiled by a “green race” that started as a sprint. There was an urgent need to bring Asian nations—especially China—into line with the rest of the world to use cleaner and more efficient energy sources.
Suddenly in 2012, it’s turned into something of a marathon, with companies and financial institutions involved in the market, which has been slowed by regulatory and political climates that have evolved in the face of new economic realities.
After many wild years in the wind power business, clearer targets are now being set. Most of the players have realized that instead of having the most sophisticated turbine, the more important goals are to reach a levelized cost of energy and higher amount of annual energy produced.
The industry standard has been to use totally enclosed (IP54) generators in the turbines, mainly to avoid the risk of corrosion in its different forms and also to improve the lifetime of the components. Offshore turbines face additional challenges from the sea environment in which the components in both offshore and near-shore turbines are exposed to salt water.
Back in 2008 when The Switch delivered its first inverter for a photovoltaic (PV) solar application, it was built like power converters have been for many decades. Variable speed drives for industrial applications, excitation systems – and more recently, power converters for renewable energy applications such as wind – have always had a logical indoor installation location.
Permanent magnet (PM) technology has some clear benefits also for marine applications. Since fuel prices have gone up by 30% in only 2 years and freight rates have remained at about the same level for the past 10 years, energy savings has become hot topic in shipbuilding.
The snow has covered Finland again and there is very little daylight… Regardless, The Switchians are staying busy. Development projects are bustling – and deliveries are being shipped out. At the same time, our Key Account Managers are still bringing orders in… Just as Santa gets ready to do his rounds, our year-end commitments are keeping us focused on the work at hand.
Last month’s HUSUM WindEnergy exhibition gave us firm proof that the wind power business is moving ahead again. We’re seeing movement from all different directions and positive signs that the worst may now be over. Bigger and better turbines are currently being developed to respond to future market requirements.
The wind power business has experienced difficulties over the years in different continents. In 2009, the financial crisis squeezed money from the European market. In 2010, the US market slowed down. And most recently, China cooled in 2011.
We have been able to navigate in this turbulent environment, even though The Switch, too, has experienced challenges. Many potential projects have not turned into the planned volume production. Many of our customers have experienced challenges to enter the market, changed ownership or have given up on the wind turbine business.
We have analyzed our success factors – and come to the conclusion that we embrace certain rights, giving The Switch the freedom and ability to excel even during hard times.
All over the world, politicians see the opportunity for job growth in the renewable energy business. For example here in the US, the economy and job creation is one of the key themes in the ongoing primaries and the upcoming presidential election.
The wind and solar power industries offer opportunities to create more good-paying jobs for the local manufacturing industry, particularly as in the past these type of jobs have largely moved to low-cost countries with inexpensive labor, such as China, India, Vietnam and others. In many cases, the job creation opportunity is of higher political interest than concerns about global warming or even the western world’s heavy dependence on imported oil.
What counts is the total cost, not purchase cost. This was one of the main themes that was identified at the international IQPC Wind Turbine Supply Chain management conference in August in Germany. Speaking about The Switch agility to meet market demand fluctuations at the conference, Simon Hewitt, Global Sourcing Manager at The Switch, discussed demands for greater manufacturing flexibility, an effective risk management strategy and ways to adapt the wind turbine supply chain to demand fluctuations.
The growing global demand of rare earth metals combined with China’s ever-tightening grip on the material keep pushing up the magnet prices. While we at The Switch don’t think that the price trend can last for too long, we understand that the matter is of great concern for the wind power industry. To tackle with this alarming situation and to meet future needs, the industry needs to change its perspective to open up to new opportunities.
The Switch has done intense research and development to reduce the amount of magnets needed for the production of permanent magnet generators. Based on the successful testing of 20 different machine types, we are in a unique position to make third generation permanent magnet machines. By combining our extensive field experience with our state-of-the-art design methods, not only do we have the skills to produce classical machines but we can also bring new innovation to the permanent magnet generators field.
So Germany decided to ditch nuclear power by 2022 and largely replace the lost nuclear energy with renewables, such as wind and solar. Hurrah! We at The Switch think it is a great decision for Germany as well as for the whole wind power industry.
To shut down all of Germany’s nuclear reactors and to launch an “energy revolution” (as chancellor Merkel appropriately calls it) is a bold move. And we hope Germany will manage to set an example so that other countries will embark on this sustainable path, too.
Attention: Chinese wind power manufacturers! We know that you are eyeing the West. Speaking last week to a house full of Chinese business and trade journalists at The Switch media business luncheon in Beijing, Celia Sun from MAKE consulting company listed a few approaches and risks you may want to consider when entering new markets.
According to MAKE’s Chief Representative in China, regulatory and technical barriers in mature markets may become a hindrance to the overseas business development plans of Chinese companies. To a large extent, this is true. However, as we at The Switch know very well, some of the Chinese wind turbines are already ‘powered by’ Western technologies, such as The Switch’s permanent-magnet generators and full-power converters.
