Despite the current economic turmoil, the global trend towards greater renewable energy deployment points to a sustained period of wind turbine investment, with equipment purchases expected to more than double by 2025, according to a new IHS Emerging Energy Research study.
To date, 2011 investment levels are well below their historic 2008 high, but investment will increase from $30 billion in 2010 to more than $68 billion in 2025, said the firm, which is based in Cambridge, Massachusetts in the US.
This trend corresponds with worldwide installed wind capacity rising from 188 GW to over 940 GW during this forecast period, HIS said.
According to the study, “Global Wind Turbine Markets and Strategies: 2011-2025”, key features of the market’s growth drivers include strong long term renewable electricity demand in the global market, combined with intensifying competition between Asian and European suppliers, technology shifts toward larger turbine procurement, and buy-side consolidation.
“Industry restructuring is underway as a response to slumping demand, with positive long-term implications for the wind energy sector,” said Eduard Sala de Vedruna, Director of Global Wind Energy Advisory at IHS.
“Wind turbine players face important strategic decisions now to diversify markets geographically, build a position in offshore wind, and optimize their manufacturing operations to address these demand shifts,” de Vedruna said.
IHS says lower than expected economic recovery in the United States, a plateau in European demand, and continued pressure on prices globally are among the reasons investment will remain below the 2008 mark in the short term.
But it predicts that Investment levels will return to previous highs ($34 billion in 2008) by 2012.
IHS expects the amount of installed wind power capacity to jump 16 percent in 2011 compared to the previous year. The increase in installed capacity will translate into a 14 percent increase in investment for the year, according to the study.
Average prices for turbine plus tower remain below US $910/kW in 2011, due to ongoing globalisation of turbine manufacturing, increasing competition from Asian suppliers and an abrupt drop in demand that have created a challenging environment for manufacturers, the study says.
“Pricing in the global wind turbine market has undergone rapid shifts in the last two-and-a-half years,” said Marc Mühlenbach, Global Wind Energy Advisory service analyst for IHS. “The recession hitting the market in 2009 moved the industry from a seller’s to a buyer’s market and it remains that way.”