Headed for a second-consecutive record year, the global wind market is expected to have 59 GW of new installations in 2015, compared to the 52 GW installed in 2014, says a new report from business advisory firm FTI Consulting's energy practice, FTI Intelligence.
According to FTI's latest renewable energy publication, the Global Wind Market Update – H2 2015 Briefing, total installations for the 2015-2019 period are now expected to reach 264 GW – an increase of 5.6% from FTI's first-quarter 2015 forecast. Total installations for the 2015-2024 period are expected to reach 592 GW, corresponding to a 3.3% compound annual growth rate between 2014 and 2024.
Specifically, the new-installation forecasts in 2015-2019 were upgraded by 12.4% for North America, with key drivers being the expected strong growth in Canada in 2016 and the U.S.' Clean Power Plan. FTI Intelligence says it has increased its Asia Pacific forecast for total installations by 2019 by 5.6% due to China's clear visibility of project pipelines in 2016.
The report estimates firm order intake for the top 10 wind turbine original equipment manufacturers in the first half of the year was approximately 20 GW. Danish-owned manufacturer Vestas leads the intake, driven by near-record orders of 3 GW in the second quarter.
Chinese companies Goldwind and United Power take second and third place, respectively, by taking the advantage of strong market growth in their home market. Germany's Siemens, the second largest wind turbine manufacturer in 2014, saw a relatively low order intake due to a lull in offshore orders in both the first and second quarters of this year, the report says.
Confirmed offshore orders for the first half of 2015 totaled 1.203 GW – led by Senvion (443 MW) and followed by MHI Vestas (423 MW) and Siemens (337 MW).
The briefing also highlights the acceleration in mergers and acquisitions (M&A) activity in the wind sector, with a large number of deals announced or finalized. On the supply side, the highlights were the recent acquisition of Acciona Windpower by Nordex, regulatory approvals of the GE-Alstom acquisition, and the merger of Chinese turbine manufacturers CSR and CNR, respectively. These deals followed the acquisition of Senvion by Centerbridge Partners earlier this year.
There were also a number of deals involving component manufacturers, such as Ming Yang's acquisition of China Smart's RENergy, ZF's acquisition plan to take over Bosch Rexroth's industrial gears and wind turbine gearbox business, and most recently, GE's acquisition of modular blade producer Blade Dynamics.
On the demand side, the report says, onshore M&A continues to be driven by strong appetite for assets of yieldcos, including the acquisition of projects from Atlantic Power and Invenergy in the U.S. by SunEdison and the acquisition of projects and equity in Brazilian developer Renova by TerraForm Global. The market also saw GE buy a 49% stake in Enel Green Power's 760 MW portfolio of operating and under-construction renewables assets in North America.
"Although the wind market still suffers from policy uncertainty, continual improvements in technology and innovations in finance are changing "facts on the ground' and making wind power directly competitive with fossil fuels in growing areas of the world – despite low oil and gas prices," says Aris Karcanias, managing director of FTI Consulting and co-lead of the company's clean energy practice. "There is a new sense of maturity and confidence in the wind industry, as well as an ongoing process of consolidation around companies with strong financial and industrial capabilities."
FTI Intelligence's full report can be accessed here.