Winds of Change – The Global Wind Power Market for 2013 and Beyond
Posted December 6th, 2012
The wind power industry is reaching maturity, signaled by the end of incubator-like protection and financial support from governments worldwide. As might be expected, the industry is predicted to face some bumps in the road in 2013 as it struggles to find its place independently in the global economy. Here’s a look at the progress of wind power so far, and what the future holds.
- China once again topped Ernst & Young’s wind index in the accounting firm’s latest quarterly report. However, the country’s recent rapid growth in new wind capacity is expected to decline from 2011’s record 20GW to between 15 and 17GW annually for the rest of the decade, as the Chinese government attempts to prevent overcapacity by strengthening permit rules. China will continue to be a player, however – the combination of increasing coal prices and falling turbine prices means that wind is likely to remain an attractive energy resource. Another wind powerhouse in the region, India, had a good year in 2011 and looks to continue expanding due to more supportive regulatory measures passed in that country.
- In the United States, future growth depends upon the fate of the US Production Tax Credit that is set to expire at the end of this year. With federal finances in crisis, renewal of this credit is looking increasingly unlikely. Should that credit disappear, industry growth is certain to drop off, although the four states with the largest levels of installation – Texas, Iowa, California and Illinois – have high targets for renewables penetration set through 2020-25. The growth outlook in Canada is slight more favorable – the country saw a doubling in installations from 2010, and in turn, that number is expected to double once again in the next five years.
- Europe has toppled from its position as the largest regional market, going from having 51% of new installations last year to just 24.5% currently. Part of the problem is that while EU policy broadly support wind power, the true decision-making lies at a national level, with individual countries progressing at varying rates depending upon which way the political winds are blowing.
According to the Ernst and Young report, the wind industry is expected to rally again in 2014 and 2015, when installed capacity is forecast to grow to 48GW and 56GW respectively. And as the industry continues to mature by transitioning from a politically correct, token source of energy to a supplier of significant amounts of power, growth rates should become steadier and more sustainable.
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