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Looming Wind Energy Policy Induced Demand Peak Set For 2018, Says MAKE

Near-term growth in the wind energy sector is being driven by a winding down of policy incentives, and heading towards a 2018 policy induced demand peak.

These are the conclusions made by renewable energy intelligence firm, MAKE Consulting, in its recently published Q1/2016 Global Wind Power Market Outlook Update. Specifically, the current trend of global wind energy growth is likely to reach a tipping point in 2018, as national markets adjust to either a lower level of incentives, a transition to new support mechanisms, or a lack of policy support altogether.

wind turbines GermanyThis is exemplified by the rush at the end of 2015 in China to maximize the benefits from the expiring Feed-in Tariff policy, which saw the country report wind installations in 2015 of 32.9 GW (or 32.5 GW, depending on who is reporting).

The expectation of a policy induced demand peak in 2018 hinges on the looming question of successor policies, and whether or not the wind energy sector will receive policy support moving forward — especially due to the “uncertainty surrounding the depth and scale of post-2020 renewable energy commitments” made by individual nations.

“Optimism flourishes under expectations of the creation of national-level commitments under the Paris Agreement,” MAKE Consulting explained in the press release attached to the publication of its Update.

“Moreover, a burgeoning non-state, consumer-driven market supported by commercial and industrial commitments seemingly works both in parallel and independently of national-level policies. However, the question of wind power integration, storage, and further LCOE improvements linger and potentially limit growth potential as governments wrestle with the cost of compliance.”

Looking forward, therefore, MAKE Consulting predicts global connected wind power capacity to decline by 17% in 2016, though this is due primarily to what MAKE describes as “a return to relative normalcy in China” which will reset in 2016, dropping 35% year-over-year. Global growth excluding China is flat, according to preliminary data from 2015.

MAKE forecasts global growth to spike in 2018, before growing gradually from a lower 2017 level toward 2025.

 
 
 
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