Some wind energy markets will see better growth than others in the years to come, as a weak macroeconomic and regulatory outlook may impede long-term wind power growth.
According to a report from Make Consulting, a few U.S. markets will see growth as developers make a final dash to capitalize on the soon-to-expire bonus tax depreciation and Section 1603 cash-grant programs, but long-term growth of the wind power industry may suffer.
This situation is mirrored in the U.K., where changes to the proposed renewable obligation certificate scheme are expected to drive onshore development before April 2013.
The apparent lack of confidence in the introduction of new or renewed support schemes dampens prospects for long-term growth, the report adds.
Apart from skepticism among developers in the U.S. and U.K. markets, bearish macroeconomic conditions in southern Europe have also considerably contributed to a downgrade in MAKE's long-term forecast for global capacity installations for the 2011-2016 period, which the firm pegs at 316 GW.
In Spain, there are no signs of a new regulatory framework before the first or second quarters of 2012, which the report says threatens installation levels for 2013 and 2014. Moreover, the new framework is expected to include reductions in the current feed-in tariff. Portugal suffers from similar conditions, leading to downgrades in both countries' medium- to long-term growth forecasts.
So far, China has been one of the strong driving forces of wind power development. MAKE's forecast for China shows an increase in grid-connected capacity but a slowdown of new installed capacity. In India, the possible expiration of the accelerated-depreciation scheme and increased momentum of the generation-based incentive drove growth in 2011 installations and is expected to do so in 2012 as well.
Offshore wind continues to be the industry's silver lining, with above-average growth rates and a strong and steady project pipeline. MAKE maintains its expectation for offshore wind power to grow at a compound annual growth rate of 32% from 2010 to 2016.
