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    Global Wind Power Report: Introduction


    June 17, 2022 - Fitch Solutions Sector Intelligence

     

      THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.

      Global Wind Power Report: Introduction

      • 17 Jun 2022
      • Global
      • Renewables

      Key View: We expect wind capacity growth to remain robust over the coming decade with key decarbonisation aims and energy security concerns driving additions. Mainland China will continue to dominate the space representing almost half of global additions, although western European markets will also see robust capacity growth. Wind power projects planned over the near term are creating a surge in demand for materials. This pressure on the supply of key metals in particular will continue to drive up Capital costs across the globe. However, we highlight that new advancements in large wind turbine technology and new highly efficient floating wind technology will improve the economics of projects long term.

      In this bi-annual Global Wind Power Report, we aggregate our forecast for the global wind power sector and take a top-down perspective in order to identify global trends, opportunities and risks. Our global wind power forecasts are a bottom-up aggregate of the 117 markets we cover, making up more than 99% of the global market.

      The report is divided into five different areas, which we outline below together with a number of our views:

      • Global Wind Forecast: Our outlook for the wind sector has improved this quarter and we now expect to see 745GW of new capacity growth to be added between 2022 and 2031, against 690GW last quarter. This is being driven by a sharp increase in markets looking to increase domestic power supply, ensure energy security and decarbonize their power sectors. Mainland China will retain its dominant position globally as it expands both its onshore and offshore wind growth with new programs.
      • Investment Hotspots: In this biannual report, we highlight Germany and United Kingdom as our wind power sector outperformers, as the third and fifth largest markets in terms of installed wind capacity over our 10-year forecast period to 2031. South Korea is our wind power 'market to watch', due to the rapid growth of wind capacity and support for a burgeoning offshore wind pipeline, which poses large upside risks to our outlook.
      • Technology Trends: Elevated material prices will continue to have an impact on the capital costs for wind technologies. Paradoxically of the sector, the demand for wind turbines will remain high despite elevated costs owing to increasingly aggressive decarbonisation strategies Global wind CapEx will see upwards pressures amid the combined rising prices and rising capacity. Historically, costs have varied between regions and technologies with variations not necessarily uniform across the globe.
      • Decommissioning wind turbine parts will increase in the coming decade as wind turbines installed in the early 2000s are reaching their end-of-life. North America and Europe will need to lead the recycling of wind turbines in the coming decade as the need for recycling will rise with the increasing number of decommissioning wind power projects. Current methods of recycling wind turbine blades are limited in scale and landfills will remain more cost-attractive in the short term. In addition to recycling, repowering of wind turbines have been introduced as a way to reduce wind turbine waste, though this does not immediately address hard-to-recycle wind turbine blades.
      • Project Analysis: Over the past six months, we have observed the floating wind project pipeline expand significantly, with our Infrastructure Key Projects Data showing over 300GW of projects in various stages of developments. A number of bespoke floating wind developers are competing with established energy companies for market share. Latest UK offshore wind leasing round outlines major potential growth for the floating sector with major energy firms competing in the UK and globally.
      • Competitive Landscape: We expect to see wind farm sizes continue to increase over the coming decade, as developers seek to reduce costs through increased scale. The typical size of wind turbines, offshore technology in particular, shows signs of a rapid increase. European manufacturers continue to lead the wind project pipeline, as developers turn to large technology to reduce costs.
      This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.

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