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 IHS Emerging Energy Research.
2011 investment levels will fall below their historic 2008 high, but investments will increase from $30 billion in 2010 to more than $68 billion in 2025, the report predicts.
Worldwide, installed wind capacity will rise from the current 188 GW to over 940 GW through 2025, they say.
Investment levels will return to 2008 highs of $34 billion a year by 2012, the study finds.
Slower than expected economic recovery in the US, a plateau in European demand, and continued pricing pressure globally are among the reasons investments will remain below 2008 levels in the short term.
IHS expects the amount of installed wind capacity to jump 16% in 2011 compared to 2010, translating into a 14% increase in investments.
Average prices for turbines are expected to stay below $910 per kilowatt in 2011 because of ongoing globalization of turbine manufacturing and increased competition from Asian suppliers.
Those factors, combined with an abrupt drop in demand, have created a challenging environment for manufacturers.
"Pricing in the global wind turbine market has undergone rapid shifts in the last two-and-a-half years," says 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."
Key features that will drive market growth include:
- strong global long-term renewable electricity demand combined with intensifying competition between Asian and European suppliers
- technology shifts toward larger turbines
- buy-side consolidation
"Industry restructuring is underway as a response to slumping demand, with positive long-term implications for the wind energy sector," says 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."
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