In its latest Global Wind Power Market Outlook Update, MAKE Consulting maintains its expectation of 7.1% average annual growth for worldwide wind installations from 2013 to 2023.
The report says near-term increases will be intact as China supports a 1 GW upgrade in installations this year and as 2015 sets a new global annual grid-connected record with an expected 5.2% year-over-year growth.
China's Central Government has issued a new target of at least 18 GW of new installed wind capacity for this year. This supportive target, combined with high market activity year to date, has led to a 0.5% upgrade to MAKE's 2014-2016 growth expectation – offsetting net downgrades from the first quarter of 2014 (Q1'14) in Europe, the Middle East and Africa. The report notes that a 1.6 GW cut in Ireland, offshore adjustments in the U.K., political turmoil in Ukraine, and slow market activity in Saudi Arabia contribute to a 0.8% decrease in the region.
The positive near-term outlook in the U.S. is maintained as expectations for a production tax credit renewal through a tax extenders package this year continues. Canada's three-year bubble is expected to stay on track, while long-term growth is dependent on upcoming elections in Ontario and the expected new energy program in Alberta by the end of the year. Although the North American growth bubble is in place from 2014 to 2016, MAKE says Latin America presents a more consistent outlook throughout the decade.
The report also says that with an expected 20.2% growth on average per year from 2013 to 2023, the offshore wind sector remains promising. While project-level and policy adjustments affect the near-term European offshore outlook, MAKE predicts growth beyond 2019 will improve as the market will connect at least 4 GW per year on average.
Wind turbine order inflow in the Q1'14 increased 7.4% year-over-year, continuing global market recovery despite being down 43% from Q4'13. the Europe, Middle East and Africa (EMEA) region accounted for 34% of firm order volume in Q1'14 followed by the Asia-Pacific region with 23%. Order intake fatigue in the U.S. after significant activity in Q4'13 impacts total volume in the region. Among the turbine order winners in Q1'14 were Vestas in the Americas, Siemens in EMEA and Windey in Asia-Pacific.
MAKE says average turbine pricing remains stable from Q1'14, with newer technology demanding higher price points, particularly in Western markets. Increasing demand for quality in China, coupled with more aggressive government-sponsored targets, may help create a seller's market for specific original equipment manufacturers.