Global Wind Turbine Market Value To Hit $48 Billion By 2022, Led By APAC

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The global wind turbine market is expected to continue to grow over the next few years, according to new figures published by analysts GlobalData, with market value estimated to be $47.83 billion in 2022, up from $44.75 billion in 2017, driven primarily by onshore development.

GlobalData published a new report last week which claimed that the global wind turbine market will surf the wave created by renewable energy global investment trends aimed at addressing power sector challenges. The authors of the report point out the obvious, that “solar and wind are prevalent due to the availability of resources across the world” and that “Power sectors in countries are moving towards improving energy security, self-sufficiency, and addressing climate change issues; driving the utilization and deployment of clean energy technologies such as wind as a power generation source.”

With regards the wind turbine market specifically, GlobalData expects the Asia Pacific region to lead the way, with a market value in 2022 of $17.24 billion and an aggregate market value of $93.85 billion. They will be followed by the EMEA region (Europe, Middle East, and Africa) with an aggregate market value of $88.77 billion — although, it’s worth noting, GlobalData expects EMEA to “outrun” the Asia Pacific region in terms of market value for offshore wind installations, as compared to wind as a whole.

“There are growing concerns regarding environmental impacts of industrial activities and geo-political risks, which are prompting governments to utilize clean energy resources available within the country,” explained Nirushan Rajasekaram, Analyst at GlobalData. “Furthermore, the market opportunities are attracting a plethora of potential investors and stakeholders driving down equipment costs, promoting technology development, and thereby creating a conducive market for wind turbines.”

According to GlobalData, the “need to improve access to electricity, increasing consumption of electricity, and strong industrial market are primary driving factors for onshore wind turbines market.” Unsurprisingly, the growth in the Asia Pacific region is strongly driven by China, “which has established comprehensive development plans focused on utilizing renewable energy to sustain its growth and market ambitions to strengthen its position as a global leader in wind technology development.”

“The utilization of renewables is seen as a suitable mechanism to wean away from the widespread resilience on fossil fuels, which has contributed to a myriad of environmental and economic challenges,” added Rajasekaram. “The global commitment to curb emissions, need to circumvent geopolitical risks impacting fossil fuel supply, transition towards low carbon economies, and increasing demand for electricity will drive the wind turbines market.”

As regards China specifically, it will be interesting to see what role is played by the Government’s recent decisions to phase-out renewable energy subsidies in an effort to bring these technologies up to grid price parity.

“Although, the plan to phase out subsidies is expected to affect the Chinese market globally but it will prove beneficial in long run, helping to attain grid parity,” explained Nirushan Rajasekaram. “Thus, the Chinese wind power sector is expected to witness a decline in the market value from $13.4 billion in 2017 to $11.8 billion in 2022. On the volume side, the market is estimated to fall and reach 18.3 GW in 2022 from 19.5 GW in 2017 owing to the expected reduction in subsidies.”

Stepping away from China, however, and the role of offshore wind is set to play an important part in the expansion of wind development throughout the Asia Pacific region. Specifically, both Taiwan and Japan have, to varying degrees, committed heavily to developing large-scale offshore wind industries and pipelines.

Specifically, Taiwan’s Bureau of Energy has awarded a total of 5.4 GW worth of offshore wind capacity this year alone — in auctions in April and June. Across the waters in Japan, while things are not quite so far advanced, the country is nevertheless looking to offshore wind as a primary source of new power capacity as it transitions away from nuclear in the wake of the 2011 Fukushima Daiichi nuclear disaster. Specifically, the Tokyo Electric Power Company, better known as TEPCO, has announced it plans to pursue the development of up to 6 or 7 GW worth of new renewable energy, focusing primarily on offshore, while Japan’s Electric Power Development Co., better known as J-Power, signed a Memorandum of Understanding (MoU) with French multinational electric utility ENGIE to collaborate on power projects, specifically offshore wind and floating offshore wind projects.

Nirushan Rajasekaram on Taiwan and Japan

I asked GlobalData’s Nirushan Rajasekaram to expand on the role that Taiwan and Japan will play in the coming years.

“The Japanese government is trying to improvise the development of offshore wind power sector. The Japanese cabinet has drafted a new bill that would set nationwide rules for offshore wind development clarifying the permitting procedures and reducing the offshore wind prices. The proposed law also includes designated construction zones for offshore wind capacity and 30-year occupation lease for developers. Although, the law is expected to be approved but it got delayed due to the closure of Japan’s parliament in July due to natural calamities in the western part of the country. The cumulative installation for offshore wind power sector is expected to reach 546.6 MW in 2022 from 64.6 MW in 2017. Thus, country is expected to witness various offshore wind power installation in the forecast period. Some of them are:

  • Yurihonjo (560 MW)
  • Akita Prefecture- Offshore (455 MW)
  • Ishikari Bay (104 MW)

“The cumulative installed wind power capacity in Japan for offshore sector in the forecast period is depicted below:

Year Cumulative offshore wind power capacity (GW)
2018 0.07
2019 0.07
2020 0.21
2021 0.32
2022 0.55
Source: GlobalData

“The government of Taiwan has been emphasizing the use of wind power, both onshore and offshore. The Ministry of Economic Affairs (MoEA) have set wind power development targets of 1.2 GW for onshore and 3 GW for offshore wind by 2030. The government is focusing more on the offshore segment of the wind power market, as there is limited land area available, along with large potential offshore resources. The government of Taiwan has also initiated promotional strategies such as FiTs and Offshore Demonstration Incentive Program (DIP). For the Demonstration Incentive Program, three companies qualified in 2014. Taipower, Fu-Hai, and Hai-Yang agreed to set up demonstration projects at three different sites, with each project having a total capacity of 180 MW and consisting of 30 turbines. The projects will be commissioned by 2020, after which, based on the experience gained, more offshore projects will be added annually in order to reach the renewable targets by 2030. This incentive program consists of two parts described as follows:

  • A 50% incentive for the installation of demonstration wind turbines, which is aimed specifically at developers, to cover up to 50% of the cost of two demonstration turbines based on the capital expenditure for offshore wind power systems. The developer must pay back this part of the incentive with future income from the FiT.
  • The incentive, capped at TWD250m ($8.33m) for each project, will subsidize expenses such as the environmental impact assessment and the setting up of a met mast (wind mast).

This incentive policy is likely to boost the offshore power market in Taiwan. The country is expected to witness the construction of some offshore wind power plants that are depicted below:

  • Yunlin Country Offshore Wind Farm (640 MW)
  • Hai Long 2 Offshore Wind Farm (532 MW)
  • Miaoli Zhunan Formosa (528 MW)

The cumulative installed wind power capacity in Taiwan for offshore sector in the forecast period is depicted below:

Year Cumulative offshore wind power capacity (GW)
2018 0.008
2019 0.12
2020 0.38
2021 0.49
2022 1.03
Source: GlobalData

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Joshua S Hill

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