Wind turbine purchases globally will more than double from 2010 levels to reach $68 billion in 2025, according to a study from IHS Emerging Energy Research. However, the research firm said the industry will have a rather slow start this year.
IHS expects that the amount of installed wind power capacity will still jump 16 percent in 2011 from the previous year, translating into a 14 percent increase in investment.
But 2011 investments will still be below a previous high of $34 billion in 2008, the research firm said.
Slower than expected economic recovery in the United States, lower demand in Europe, and continued pressure on prices globally are among the reasons investment will remain below the 2008 mark in the short term, IHS, with offices in Singapore, Spain, and Massachusetts.
Additionally, growing competition from Asian suppliers have caused average prices for wind turbines and towers to remain below $910 per kilowatt in 2011, which IHS said «have created a challenging environment for manufacturers» since it will possibly affect revenues and profits.
However, current developments in wind energy in France, Germany, and the United States, particularly in offshore wind, could change the political and business environment and make the industry’s predicted rise come sooner.
Overall, worldwide installed wind capacity is expected to rise from 188 gigawatts in 2010 to over 940 GW, according to IHS.
«Industry restructuring is underway as a response to slumping demand, with positive long-term implications for the wind energy sector,» Eduard Sala de Vedruna, director of globalwind energy advisory at IHS said.
«Wind turbine players face important strategic decisions now to diversify markets geographically, build a position in offshore wind, and optimize their manufacturing operations to address these demand shifts,» he added.
Recent developments
The United States Interior Department has just designated an area off the coasts of Rhode Island and Massachusetts on Wednesday where developers may build offshore wind farms. The department invited developers to submit proposals for wind projects.
Similar areas off the coasts of Delaware, Maryland, New Jersey and Virginia have also been assigned in February, planning to offer commercial leases for wind farm development as early as 2012.
In Germany, criticism over nuclear power following the disaster at Japan’s Fukushima Daiichi plant drove government to announce plans to close all 17 of its nuclear reactors staring July.
Eventually to be replaced with cleaner sources of power, part of the country’s plan is to install 10 GW of wind turbines at sea by the end of the decade and 25 GW by 2030.
Britain, on the other hand, has a much larger target of 29 GW of offshore wind by 2020, needed to meet its legally binding target to get 15 percent of its energy from renewable sources by then.
The Crown Estate, which oversees Britain’s seabed, is auctioning portions of land out at sea to increase its offshore wind power capacity. The current round is offering offshore wind farms across nine regions which could provide up to 32 gigawatts of wind generating capacity.
Meanwhile, the French government has announced plans to have 6 GW of offshore wind capacity by 2020 as it tries to meet a target of sourcing 23 percent of its energy from renewables by 2020. The country, like the United States, currently has no large offshore wind energy capacity.
President Nicolas Sarkozy announced in January that the government will invest 10 billion euros ($14.613 billion) in developing offshore wind farms. For the bidding round this July, France offered a competitive tender for around 3,000 megawatts of wind projects.
