MAKE’s Q3/2016 Global Wind Power Market Outlook Update presents an analysis of global and regional wind power installation forecasts through 2025. Policy clarity in several key global markets since June has impacted growth projections both positively and negatively in those markets, but the adjustments balance out over the 10-year outlook, with a net upgrade of less than 600MW.
MAKE upgrades the 2016 to 2018 global outlook by 1%, due largely to a 23% upgrade in the outlook for India and a 9% upgrade in the outlook for Germany over this period. Project timeline adjustments in developing markets temper the overall upgrade.
A 2GW downgrade from 2019 to 2025 is primarily attributed to policy announcements in the UK and in Poland. The downgrade, however, does not have a significant impact on the global outlook as the 10-year CAGR is maintained from the outlook in Q2.
There was minimal change to the outlook for the Americas from the Q2 analysis, with adjustments exclusively caused by dynamics in Latin America, representing a downgrade of less than 1%. Wind power in Latin America’s top markets–Brazil and Mexico–faces increasingly strong competition from solar, putting pressure on winning in upcoming auctions. In North America, new offshore policy in the US state of Massachusetts provides greater certainty and results in an upgrade to the offshore outlook.
Europe had a high concentration of adjustments in the Q3 analysis, led by policy-driven downgrades in the UK and in Poland. Despite the negative impact and lingering uncertainty in the UK caused by Brexit, upgrades in Northern Europe (+4% QoQ over the outlook period) offset the overall impact of downgrades across markets in Europe. Markets in Scandinavia continue to surge, as policy clarity and subsequent development efforts in Norway and Sweden lead to positive adjustments.
Troubling policies from Poland’s PiS government result in an 11% downgrade in Eastern Europe compared to the Q2 analysis. Positive developments in smaller markets in the sub-region (e.g., Croatia, Macedonia and Serbia) do not carry enough weight to have a significant impact.
Downward adjustments in Egypt and in Saudi Arabia yield a 1% downgrade QoQ in MEA. However, increasing long-term confidence in Iran helps to offset the long-term impact. The near-term impact is more significant (-8%), as Egypt’s FIT program is still maturing and Iran continues to recover economically.
MAKE keeps the outlook in China consistent with the Q2 analysis. China’s central government introduced a mechanism to encourage more rational investment in wind projects. This has motivated developers in heavily curtailed regions in the north to pursue opportunities in southern regions, which will offset a near-term decline in growth in northern regions.
Growth prospects in India continue to be a focal point for the industry, with the latest policy announcements triggering a 6% upgrade to the Q2 analysis. A short-term boost in India is dampened modestly by project adjustments in the rest of the sub-region, but overall the outlook for Asia Pacific excluding China is upgraded by 3% QoQ over the 10-year period.
Firm order intake decreased 15% YoY in Q2/2016 to nearly 12GW, primarily due to a pause in orders placed for projects in the US market as developers re-evaluated project timelines following IRS guidance on PTC qualification. Order volume in APAC stayed consistent YoY, as developers in India rushed to capitalize on full incentive levels in 2016 and developers in China direct focus to southern regions.