South Africa, Morocco, Egypt, Ethiopia and Kenya boast current installed capacities of 1,053, 800, 810, 324 and 14 MW, respectively, according to 2015 Global Wind Energy Council (GWEC) statistics. These countries have been active in the wind energy market, and they are likely to lead the demand for wind turbine lubricants.

Wind farms require a variety of greases, gear oils and hydraulic fluids to lubricate hydraulic systems, bearings, gears and shafts. In Africa and the Middle East, besides market leader South Africa, both Morocco and Egypt seem poised for solid growth in the next five years. And smaller markets in Kenya, Ethiopia and elsewhere are moving, said Steve Sawyers, secretary general of GWEC in the organizations 2016 annual report.

Demand for wind turbines has been especially high in South Africa, surpassing 1 GW in two years. The countrys Renewable Energy Independent Power Producer Procurement (REIPPP) program, being developed in phases, is expected to create demand for at least 2,500 wind turbines when the fourth phase is fully implemented, according to the South Africa Wind Energy Association (Sawea).

Since 2011, the country has procured 3,374 MW of wind capacity. The fourth phase, comprising 1,362 MW, has been approved, but project developers have yet to sign power purchase agreements with the countrys utility, Eskom. Despite Eskoms financial woes, the GWEC expects South Africa to remain the largest market in the region.

Sawea reported that by the end of 2015, 608 MW of energy projects were under construction in the country, which needs more than 40,000 MW of new generation capacity by 2025. Wind turbine manufacturers, lubricant producers and suppliers are expected to take advantage of this fast-expanding opportunity to grow their operations.

Danish wind turbine manufacturer, seller, installer and service provider Vestas Wind Systems A/S delivered 117 MW of turbine capacity to South Africa in 2015, while Spanish firm Acciona delivered 46 wind turbines to the country. Siemens garnered one of the largest wind turbine orders for South Africa, comprising 157 units for three projects with a combined capacity of 360 MW.

In North Africa, the completion of a 200-MW, 100-turbine wind farm in Egypts Gulf of El-Zayt in 2015 pushed the countrys capacity to 810 MW. In neighboring Ethiopia, 153 MW of new capacity came online in the same year.

Kenya expects to commission 310 MW of new capacity by 2018, as a consortium of developers, Lake Turkana Wind Power, puts the final touches on one of Africas largest wind farms. Vestas is supplying 365 wind turbines for the project, 155 of which had been installed by October 2016.

Boosting Lube Demand

In its study of the market, Kline & Co. predicted a significant increase in lubricant consumption in the region. The operating capacity, oil change frequency and penetration of direct drive turbines determine the service fill volume, and technological issues within each of these factors influences lubricant demand.

Anticipated demand for wind turbine lubricants provides new opportunities for lubricant marketers in Africa, according to Elvis Kahi, lubricants territorial manager at the National Oil Corp. of Kenya. The wind energy market has provided business opportunities for some oil marketing companies in countries where the technology has been installed, he said.

However, he added that breaking into the market might be difficult because turbine manufacturers typically designate preferred lubricant suppliers. Although other suppliers have an opportunity to penetrate the market, the process could be lengthy and requires complete understanding of OEM requirements.

Vestas Head of External Communications, Anders Riis, said the company has a 15-year contract with the Lake Turkana consortium to maintain the turbines. He declined to disclose who will supply the oils and greases for the bearings, drives and gearboxes. We dont have bandwidth to provide further details at this point, said Riis.

However, in 2013 Vestas signed a three-year deal with BP Castrol to supply initial and service fill oils for all of its new builds and existing turbines, which it estimated at the time at more than 57 GW globally. Castrol said it expected to deliver in excess of 1.5 million liters per year after its lubricants brand received the full product approval for global use, which came after a three-year trial.

Castrol reported that it had worked closely with wind turbine manufacturers to develop its Optigear Synthetic CT oil for wind turbine applications. The company reported that bearings, drives and gearboxes are the most frequent cause of costly downtime because they are subjected to extremely high loads. Castrol claims that Optigear synthetic gear oil has a high viscosity index, making it suitable for a wide range of operating conditions.

In South Africa, Shell South Africa is likely to be interested in the growing wind energy market as the country enters a new phase of its REIPPP program. The company already markets a range of turbine oils, including Shell Turbo 54 GX, which it says protects turbines from corrosion and also reduces the build-up of deposits and lacquer in turbine bearings and control valves.

Demand for wind turbine lubricants is also expected to increase in Egypt, one of the largest lubricant markets in Africa. At least 22 wind projects are in the pipeline in the country, with a combined capacity of 2,690 MW.

Egypts state agency for the development of renewable energy, New & Renewable Energy Authority (NREA) expects to develop wind energy projects with a combined capacity of 2,375 MW. The private sector will construct an additional 4,825 MW by 2020. This growth is likely to boost the demand for oils and greases, especially for the preferred suppliers.

Egypt already has one of the largest wind farms in Africa, the 545-MW Zafarana complex, which was developed in phases beginning in 2001 with backing from the government as well as German, Danish, Spanish and Japanese investors. The farms comprise 700 turbines of different capacities, including 600, 660 and 850 kW.

In April 2016, NREA selected Spains Gamesa Corporacin Tecnolgica as the preferred engineering, procurement and construction contractor for the 160-MW Gabar El Zeit wind farm on the Red Sea coast. Gamesa said its contract entails the supply, installation and commissioning of sixty 2.0-MW wind turbines, with financial backing coming from the Spanish government.

Equipment delivery commenced in October 2016, and commissioning is set for the third quarter of 2017. Gamesa, which is active in the wind energy markets of Tunisia, Morocco, Algeria, Mauritania, Mauritius and Kenya, said it will also supply another 20 turbines to expand an existing 200-MW complex, with financing from German development bank KfW.

Egypt is not only one of the largest wind energy markets in Africa but also a leading lubricant market on the continent, according to Kline. Although NREA would not name the oil marketer supplying Zafarana and Gabar El Zeit, Kline said that ExxonMobil is the number one supplier of finished lubricants in Egypt.

The consultancy estimated lubricant demand from the global wind energy industry in 2015 at 40,000 tons. This consumption has grown in line with the wind power capacity growth, which has increased seven-fold from 59 GW in 2005 to close to 433 GW in 2015, the consultancy said.

Kline estimates that gear oil is the most important lubricant category, accounting for up to 70 percent of consumption. The consultancy also noted that the synthetic lubricants used in the wind power industry are typically polyalphaolefin-based products, which account for more than 80 percent of total lubricant consumption by the industry.

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Steady Growth for Wind Energy Lubes

Kline estimated global lubricant consumption in wind energy reached almost 38,000 metric tons in 2015. Gear oils account for about 70 percent of wind turbine lubricant demand, Dutta said, followed by hydraulic fluids and greases.

She noted that the penetration of synthetic lubricants was higher than 80 percent in 2015 due to the increasing need for drain interval extensions. Other key factors impacting lubricant demand growth in the industry include increased capacity and penetration of direct drive turbines, which eliminate gearboxes.

The wind turbine lubricant market is witnessing strong growth, and penetration of synthetics is already quite high, Dutta said. Its an attractive market for a company looking to expand its sales of synthetic lubricants, and willing to offer customized products and services.

She added that the need to reduce gearbox failures and increase reliability under extreme operating conditions, while also extending drain intervals, has contributed to the increased use of synthetic lubricants. As the wind energy industry is risk averse, the fear of gearbox failure and the need to maintain long drain intervals to control costs make synthetic products attractive.

The split of lubricant consumption by region tracks the division of global installed capacity, said Kline. China is the largest market for lubricants used in wind energy, accounting for 34 percent of total demand, followed closely by the United States with 21 percent. Germany and India each account for approximately 6 percent of demand, according to the companys report, Lubricants for Wind Turbines: Global Market Analysis and Opportunities.

The installed capacity of global wind energy in 2015 reached about 433 Gigawatts, more than nine times its 2004 total, representing 22.2 percent compound annual growth over that period. China accounted for 33 percent of global wind energy capacity, with more than 140 GW, followed by the United States. European countries Germany and Spain, which were the top two markets in 2004, ranked third and fifth in installed capacity.

Kline projects global wind energy capacity to grow at a decelerated compound annual growth rate of 13 percent over the next five years. Though this growth rate is much lower than we have seen over last the last seven years, its still good growth, Dutta said. So this suggests the market is expected to grow robustly. But as the installed base gets larger, the growth rate will be slower over the next five years.

She noted that growth in wind energy capacity in a particular country depends on the power supply-demand situation there, and also on the ability and willingness of government to support the industry. Of all the country markets, we expect China to have the highest growth in terms of installed capacity, she said, followed by India.

– George Gill