A host of political events have had a negative impact on global growth expectations. Anticipated cuts to wind power targets in China under the country’s upcoming Thirteenth Five-Year Plan headline the most impactful of recent decisions that reduce capacity over the 10-year outlook. The election of Donald Trump in the USA, the suspension of the Large Renewable Procurement II process in Ontario, Canada, and the delay in offshore tenders in Sweden have contributed to a global downgrade.
Despite adverse policy developments, the underlying fundamentals of wind power are as strong as ever. Onshore auction results in Latin America and offshore auction results in Denmark, for example, reveal wind power pricing heretofore unseen, underscoring advancements in cost of energy that will ultimately make wind power less sensitive to political change.
MAKE downgrades the 10-year outlook by 4% in its Q4 analysis, primarily due to the weight of the cut to the outlook in China. The downgrade is most severe from 2016 to 2020, as 4GW of average annual growth is removed. Despite the Q4 adjustments, higher growth expectations QoQ in 2025 results in a CAGR of 1% over the 10- year outlook. Excluding China, the Q4 adjustments from 2016 to 2020 are negligible, a positive indicator of near-term growth. However, a 5% downgrade in the USA and a 12% downgrade in Sweden between 2022 and 2025 impact the global longer term outlook excluding China negatively.
Firm order intake increased 36% YoY in Q3/2016, primarily due to a surge in orders in China following delayed announcements in 1H. Buyers in India continue to place orders (+41% YoY) in an effort to capitalize on full incentive levels in 2016, supporting growth expectations. Order intake in the USA has increased 76% YoY, as developers gain PTC eligibility before the end of the year.