Wind power forecast downgraded by 9 GW

By Kari Williamson

The consultancy says a sluggish economic environment and regulatory change are the two primary factors that continue to plague global wind power growth for the next five years.

Downgrades to the global wind power outlook are based on economic uncertainty, regulatory change and tightened conditions for project financing in key markets.

US and Europe struggling

MAKE has downgraded the US' 6% CAGR forecast to -1% for the period equalling a reduction of 8.2 GW, based on poor economic growth, weak Federal policy support and low natural gas prices.

The situation is mirrored in the European wind power market, where Italy is struggling with limited project financing and regulatory uncertainty, while Portugal faces hurdles in licensing approval and permitting.

Balanced by Chinese growth

In the near to medium term, downgrades to the US and European forecasts could be balanced out by an upsurge in grid-connection of new wind power capacity in China, driven by the Chinese central administration’s mandate for reducing the large amount of unconnected wind power capacity through stricter permitting and connection standards and procedures.

However, the consequence of this, coupled with tightened conditions for project financing, will lead to a slow-down in new erected wind power capacity. Signs of this have already started to show, with new erected wind power capacity in 1H/2011 being significantly lower than last year, MAKE says.

Moreover, the current demand dynamics in the Chinese wind power market are expected to prevail in the near to medium term.

Offshore wind – the silver lining?

Although the outlook for global offshore market growth is downgraded, the offshore segment could prove to be the wind power industry’s silver lining; with a promise of steady and continued future growth, the consultancy predicts.