UK: Long Term Growth Story for Wind Firmly Intact
MAKE Consulting’s recently launched Q1/2013 Market Outlook Update provides an analysis of global and regional wind installations in 2012 and forecasts till 2020. The study shows that growth in wind power installations is likely to average around 4.6% CAGR globally every year till 2020, as wind power is expected to become one of the most competitive power generation technologies after 2015.
Grid-connected wind capacity installed in 2012 was 48.4 GW globally, up 19% year-on-year (YoY) and in line with MAKE’s forecasts. Looking forward, MAKE Consulting believes that in spite of some economic and regulatory uncertainty, the long term growth story for wind is intact, with installed MWs expected to show CAGR to 2020 of 4.6% per annum. However, this does mask a certain amount of volatility in growth rates between 2013 and 2020. We expect that 2013 installations will be down by 7% YoY, with growth in Asia-Pacific, Offshore, Latin America, Northern Europe, Middle East/Africa offset by declines in Southern and Eastern Europe and North America, reflecting the impact of regulatory upheaval in these markets. Order flow at the end of 2012 for announced conditional and firm orders was down by 13%, reflecting our expectations for a weaker 2013, but pricing in all regions has stabilized.
2014 is likely to be another record year, with installations up 17% YoY, as continued growth in Asia-Pacific, Offshore, Latin America, Middle East/Africa plus a strong year in North America ahead of expected regulatory expirations at the end of 2014 will offset a slight decline in EU installations, caused mostly by weakness in Southern European markets. Orders are expected to recover sharply in 2013, reflecting the prospect of a record year for installations in 2014. A focus on restoring OEM profitability may give turbine pricing a positive bias but the outlook for prices to 2015 is likely to be somewhat mixed. Prices for MMW turbines (>2.5MW) are likely to see increases, however turbines prices in the sub 2.5MW category may remain under pressure. Between 2014 and 2016 global growth should flatten off until 2016 before accelerating again in 2017, due to the impact of regulatory transition in Northern America offsetting global growth elsewhere in 2015-2016. After 2017 MAKE expects CAGR of 5.3% between 2017 and 2020, as the LCOE for wind drops below grid parity.
Press release, March 07, 2013