The global wind turbine market is set to experience a turbulent end to the decade, according to new figures from research and consulting firm GlobalData, which has predicted the market will rise steadily through to 2019 before dropping back in 2020.
GlobalData’s latest report analyzes the wind turbine market through to 2020, and predicts that the market will grow from $76.54 billion in 2015 to a peak of $81.14 billion in 2019, before dropping back down to $71.21 billion in 2020. The declining costs of wind turbines have been due to improvements in technology and manufacturing, which will in turn fuel the growth of the wind industry over the next few years.
However, GlobalData predicts that the expiration of the United States’ Production Tax Credit will have a negative impact on global figures.
“Despite the initial year-on-year growth of the wind turbine market during the forecast period, the expiration of Production Tax Credits (PTC) in the US market in 2020 will have a negative impact on global wind turbine installations and market value in the same year,” explained Swati Gupta, GlobalData’s Analyst covering Power.
“The PTC for wind energy, which pays $23 per megawatt-hour ($0.023 per kilowatt-hour), will remain until 2016, followed by incremental reductions in value for the years up to January 2020. The projects which start construction in 2017 will get 80% of the credit, those that qualify in 2018 will get 60%, and those in 2019 will get 40%. The PTC for wind facilities will be phased out completely if the construction starts after December 31, 2019.”
“Thus, the wind-power market is expected to see a huge rush of capacity additions during 2016–2019 to take the benefits of tax credit extensions before they expire.”
Of course, this is reliant upon the US wind industry remaining a dominant factor over the next few years — years which will be remembered primarily as the years Donald Trump was President. Donald Trump has already promised a return to backing fossil fuel development. A climate change skeptic, Donald Trump has no love for the policies which have supported renewable energy, so the global wind industry may need to make do without the US sector for a while.
Thankfully, as GlobalData points out, China will remain a dominant force throughout the next four years, accounting for 26% of the wind turbine market in 2020. Second will be Germany, with 10% — highlighting just how dominant China is expected to remain.
In countries around the world, however, adding more and more wind power will need commensurate upgrades to existing electricity grids and infrastructure.
“Upgrading electricity infrastructure to meet future transmission and distribution demands will be a major challenge for wind power development,” Gupta explains. “Existing grid infrastructure is deemed insufficient and there is an urgent need for modifications to be made to the existing grid and its regulations to accommodate for specific wind power characteristics. Indeed, the development of new grid infrastructure requires massive investment, in terms of financial resources and time, which could reduce the market’s medium-term growth.”