Global wind power markets are expected to grow at a compound annual growth rate (CAGR) of 7%, according to MAKE Consulting's 2012 Global Wind Power Market Outlook report.
The forecast represents a downgrade from MAKE's last quarterly forecast of a 10% five-year CAGR. High growth is expected in new emerging markets and offshore wind, while weak macro conditions and uncertainty around support mechanisms have led to significant downgrades of expected demand in the U.S., Spain and India.
MAKE expects growth to be front-loaded with an expected 23% growth in 2012, driven by waning and soon-to-expire support mechanisms.
The wind power industry experienced a strong 2011, bringing over 40 GW online – representing almost 20% year-on-year growth over 2010 – led by the Asia Pacific, which accounted for more than half of all global additions. China accounted for most of these additions, with 17.4GW connected to the grid – up from 14 GW in 2010.
India followed China, with 2.8 GW connected in 2011- up from 2.1 GW connected the previous year. However, India is struggling with an impending policy flux, as its accelerated depreciation and generation-based incentive schemes are likely to expire in the near future, leading to a downgrade of MAKE's forecast for the country through 2016.
The Americas market remains substantial, but high growth rates are shifting away from the U.S. to higher growth in Canada and Latin America. Canada saw a growth of 75%, with 1.27 GW brought online, while Latin America logged 41% growth, totaling 1.1 GW in 2011 – up from over 767 MW in 2010.
In the U.S., short-term growth is fueled by expiring federal policies, which will likely support over 9.5 GW of capacity connected this year. MAKE is cautiously optimistic that key policies will be extended with a short tenure – most likely in December. However, the damage to 2013 activity will have already been done, and MAKE forecasts a U.S. downturn, which will contribute to a 5% decline in overall global installations in 2013.
Europe's wind market is split geographically, with the stronger economies of northern Europe eclipsing their southern neighbors. Installations grew in northern Europe by 21% in 2011 over 2010 levels, with nearly 5 GW of grid-connected capacity. Southern Europe showed flat growth in 2011, despite declines in France and Spain.
According to the report, offshore wind will play a key role in galvanizing the divide between northern and southern Europe as the wind businesses position themselves for offshore wind's higher growth rates, government incentives and relative appeal against increasing saturation of onshore development.