Mar 26 | 2020
(Global) Long-term Capacity Expected to Grow 112%
The impact of the current economic slowdown is expected to wipe almost 5 gigawatts of new wind power capacity from schedules in 2020, but longer term the sector is expected bounce back with strong growth, according to industry researchers.
The revised forecast for the global wind sector, predicts 73 gigawatts of new installations this year, a decline of 4.9 gigawatts compared with previous estimates.
“The potential impact on global installations remains most significant in China and the U.S., where wind-focused policy deadlines were expected to deliver record volumes. European Tier I wind energy markets, such as Spain, France and Italy, could be hit even harder on a percentage basis due to more aggressive lockdown measures inhibiting worker mobility,” said Dan Shreve, head of global wind energy research at Wood Mackenzie.
Tax Credit
While production and construction in the Chinese market is reported to be recovering, severe supply disruptions are in place in Western Europe. In the U.S., discussion is underway over an extension of tax credits for the renewable energy industry as part of a stimulus package.
“Impact from the coronavirus is expected to exacerbate an already pressure-filled 27.5 gigawatt two-year build cycle in the U.S. As the production tax credit fades, U.S. offshore annual capacity additions will depend increasingly on state leadership. We expect this to yield 23.3 gigawatts over the 10-year outlook period,” said Luke Lewandowski, Wood Mackenzie research director.
Headquartered in Edinburgh, Scotland, Wood Mackenzie is a subsidiary of Verisk Analytics, a global data analytics and risk assessment group.
77GW Annual Growth
Despite the gloomy outlook for the sector in 2020, longer-term prospects are expected to improve with Wood Mackenzie estimating that momentum built up in 2019 will push forward into 2021.
“In general, any near-term extensions are not likely to be additive in terms of our existing forecast covering the 2020-2021 time period but rather will enable the shifting of installations from 2020 into 2021 … In the months to come, there may be a more concerted effort to weave renewables policies into more sweeping omnibus bills aimed at providing fiscal stimulus in the countries hit hardest by the pandemic,” Shreve said.
The firm predicts that global wind power capacity additions will average 77 gigawatts per year from 2020 to 2029, representing growth of 112 percent in global installed capacity over the next decade.
