Global Wind Market Outlook (2019-2025)
Global wind outlook summary
- Wind capacity additions shifted lower over the past year, with about 46 GW added globally, or a 3% Y/Y decline in growth.
- Platts Analytics global power outlook assumes annual wind additions of 45-50 GW/year will take place for the period 2019-2025. While overall additions are not as large as solar (~100 GW/year), wind generation will still grow faster than solar, thanks to already stronger load factors, which are likely to increase further.
- China maintains the lead globally, with 2018 additions increasing by over 30% Y/Y, equivalent to 20 GW. We assume wind capacity growth in China will flatten with additions remaining at 2018 levels through 2025. However, an imminent shift to auctions and limitations in provinces, where curtailments are the highest, pose some risks to growth in the medium term. The U.S. will continue to see upward momentum in the near term (10+ GW in 2019) due to the phase out of the federal tax credit. India remains a very promising market thanks to significant tender activity and political will to diversify the mix, in spite of slowing additions in 2018 and so far in 2019.
- Limitations are emerging for onshore wind. Our data shows that commissioning times for onshore projects are lengthening in general, with the exception of China. In Europe, especially Germany, the expansion of onshore wind is now facing considerable attrition due to the introduction of distance rules from dwellings, which make suitable sites scarcer, and changing supporting mechanisms.
- In key auctions around the world, bids for onshore wind also appear to be stabilizing. This easing is partly due to an upward trend in steel prices (a key material used in wind turbine towers) and scarcer sites in other cases.
- The future of wind is offshore. Interest in offshore wind continues to gain momentum, with about 100 GW currently in the pipeline versus 240 GW for onshore wind. With costs declining, offshore wind is now starting to look attractive in Europe, even on a merchant basis, as shown by the zero bids projects in Europe. In some regions, a driver of offshore wind development will be greater proximity to large load centers, while players are becoming more comfortable with the technology.