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Mittwoch, 14. Juni 2017

A High-Water Mark for the Global Wind Industry?

A High-Water Mark for the Global Wind Industry?

Will 2015 be the high-water mark for annual global wind installations? We recently compiled our data for 2016 in our annual World Wind Energy Market Update 2017 report, finding that—while an enormous amount of wind turbine capacity was installed (over 54.3 GW), this was a 14 percent annual decrease from the over 63.1 GW installed the year before. The downturn is largely the result of China dropping from 30.2 GW installed in 2015 to 23.3 MW in 2016 due to changing incentive rates in that market that created an unusually high installation year as developers rushed to commission projects. Unless there are further incentive changes that foster another huge annual rush in China, the 63.1 GW installed in 2015 is likely to be the high-water mark within our forecast out to 2026.
The reality is that while the global wind energy industry is a huge market, it is no longer subject to the high annual growth rates it experienced in its infancy. This is a natural result of the market moving from an emerging one to a mature one that sees steady installations across most country markets and regions.
In 2016, the recorded installation activity resulted in a reshuffling of the top 10 wind turbine OEMs. The top 10 wind turbine vendors in terms of 2016 new annual capacity are Vestas—firmly in first place—followed in order by GE Energy, Goldwind, Gamesa, Enercon, Siemens, Nordex, Envision, Ming Yang, and United Power.

Chart 1.1: Top 10 Wind Turbine Suppliers Market Share, World Markets: 2016. Credit: Navigant Research
Stable installation rates occurred in most countries outside of China in 2016—from the long established European countries to new markets in Latin America, Asia Pacific, Africa, and elsewhere. Europe installed nearly 14 GW of wind power capacity in 2016, almost the same amount as the year before. This represents 25.7 percent of global capacity installed in 2016. Germany again saw the highest capacity installed annually with 5,443 MW, followed by France with 1,561 MW and Turkey with 1,387 MW.
North, South, and Central America combined installed 12.4 GW in 2016, representing 22.9 percent of the global market in 2016. This is down from over 14.5 GW of capacity the year before. The downturn was partly due to less capacity added in 2016 in Canada and Brazil.
Brazil shifted a few years ago from a market full of promise that attracted significant turbine manufacturing and installation to a market in a cooling off phase. The economic downturn in the country has reduced the demand for more energy, and the enormous amount of wind contracts signed in recent power contract auctions were oversubscribed against current demand.
In the middle of a wind plant construction boom, the U.S. led all countries besides China in 2016. A long-term extension of incentives ramping down through 2020 provides much sought after policy stability and supports continued capacity expansion that is likely to peak, with over 10 GW of annual wind expected to be brought online in 2020.
While there were some concerns at the start of the new presidential administration, having a Republican back in office is not expected to alter this wind build cycle since it is based on a tax credit phase-out deal coded into law prior to 2017. We surveyed developers, and their government affairs experts report no interest from Congress in revisiting tax credits for renewable energy now that long-term agreements were successfully negotiated and codified into law.
Wind power capacity continues to surge in Mexico as its policies and energy demand show the foundation for steady growth while energy deregulation secures a windy future. Mexico has joined the growing list of countries implementing competitive power contract auctions designed to encourage low and attractive generation rates for power off-takers. The first auction concluded in April 2016 and resulted in 562 MW of wind projects being awarded 15-year power purchase agreements with an average price of $55/MWh. Finalized in September 2016, a second round resulted in 1,637 MW of wind projects securing PPAs at an average price of $47/MWh for the wind projects.
Elsewhere in Latin America, Chile had its strongest year yet, with competitive power contract auctions a main driver. The country brought 519 MW online in 2016, with cumulative capacity at 1,443 MW. Chile’s auctions are the only ones where wind competes directly against traditional fossil generation, yet, wind and solar are notching up impressive gains and driving the cost of wind and solar down. The latest auction was held in August 2016 and had an average price of $47.55/MWh. Wind won around 50 percent of the 12,430 GWh per year contracted in the recent 2016 auction, which will be provided by around 2,200 MW of new wind plants expected to begin generating power in 2021 with 20-year contracts.
The combined markets of South and East Asia represented 49.7 percent of global wind power capacity in 2016, down from 52.6 percent in 2015. China’s market strength again propelled global growth, with 23.3 GW followed by India with 3.2 GW. India is experiencing steady and substantial year-over-year growth in installations and should prove to be a stable large market going forward, driven by new policy changes and insatiable energy demand from its enormous population.
Offshore wind continued in 2016 with a successful build cycle of 2.2 GW, bringing the total cumulative capacity to 13.5 GW. The 2.2 GW installed in 2016 was a significant downturn from 2015, when 3,755 MW went online—and with 2,467 MW from Germany alone. This was not representative of a typical year, however. A large amount of that capacity in 2015 had been intended for commissioning in 2014 in Germany, but delays with transmission construction pushed most project energizing and commissioning into 2015.
As expected, the majority of 2016 capacity came from Europe, led by the Netherlands and Germany with 582 MW in Germany from the Gode 1 and Gode 2 projects, 600 MW from the Gemini project off the Netherlands, and the smaller 144 MW Westermeerwind project (also off the coast of the Netherlands). China ramped up its offshore wind capacity in 2016 as well, with multiple turbine vendors installing capacity and pushing the country’s cumulative offshore wind online to over 1 GW.
The U.S. saw its first offshore wind farm commissioned in 2016: the 30 MW Block Island project off the coast of Rhode Island. This is a small amount of capacity and represents the beginning of a promising offshore wind market. The Northeastern seaboard of the U.S. will see a number of large projects built over the next decade. The most promising driver is Massachusetts, which passed a law in 2016 that requires its load serving utilities to procure 1.6 GW of wind by 2026. Almost all of this capacity will fall outside of our five-year 2017-2021 forecast, but it sets the stage for a significant 10-year offshore forecast.
Looking forward, wind installations in 2017 are projected to increase slightly by 1.7 percent to around 55.3 GW. Annual installations are expected to average around 51.9 GW between 2017 and 2021. This is a downward revision from 54.2 GW (from the World Wind Energy Market Update 2016 report), due to lower installation levels expected in China and Germany.
This forecast reflects a global wind market that will play a major role in new electricity generation additions but is levelling off in all but a few markets. Modest growth is the new reality; however, given the sheer volume of wind plant additions, this is unquestionably a large and healthy energy market and technology sector for the foreseeable future.
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