Global ownership of wind power assets shifted significantly east in 2011, owing to the incomparable growth in the Chinese market, shows a new report from MAKE Consulting. The top 10 Chinese owners together – three of which are in the top five global rankings – have averaged more than 1.3 GW of annual capacity over the last three years.
By comparison, non-Chinese owners in the top 25 rankings have averaged nearly half of that amount. Based on its second-quarter forecast update, the firm expects China to account for 41% of all new capacity between 2012 and 2016, which indicates that Chinese owners will continue to climb the rankings based on their domestic market alone.
The expiration of key policy measures and infrastructure growing pains in 2012 will lead to a pause in global growth in 2013, MAKE adds. The ongoing economic downturn has caused many asset owners to recalibrate growth expectations and strategies in light of more challenging market conditions.
Asset owners in the West are under pressure to deliver favorable returns, so they will continue to thin their portfolios of non-core and underperforming assetsm, with a heightened focus on projects with strong financial yields, the firm predicts. China, despite its long-term growth potential, may also not be immune to these forces.
A renewed focus by management on capital preservation, rather than on building new facilities at a frenetic pace, will slow the pace of development but will ultimately result in stronger balance sheets, MAKE says, adding that maximizing returns from existing assets through improved operation and maintenance strategies and equipment upgrades will further this effort.
2013 is likely to be a difficult year, but looking beyond that, annual global additions will average 50 GW through 2016, MAKE predicts. China will lead this growth, but it is essentially closed to non-Chinese investors, giving local companies an advantage.
As a result, demand in all other markets will be very competitive, and due to shifting demand and the financial strength and ambition of Chinese owners, divestments and acquisitions over the next two years may alter the top 25 ownership rankings, MAKE adds.