$600Bn to Be Spent on Wind Turbines Globally by 2028: WoodMac

$600Bn to Be Spent on Wind Turbines Globally by 2028: WoodMac

Despite demand fluctuations, the global wind turbine supply chain is racing towards a USD 600 billion cumulative opportunities by the end of 2028, as said by the global energy research & consultancy firm.

Global Component Supply Market

However, annual average wind turbine supply is forecast to hit USD 60 billion between 2020 and 2028 – reflecting an increase of 8 percent compared to 2019, as per the new analysis done by Wood Mackenzie, or popularly known as WoodMac.

The report further added that higher average turbine prices and a 20 percent growth in offshore demand reflect a 37 percent uptick in supply chain potential, representing a cumulative value of USD 222 billion by 2028. Strategic capital components, such as blades and towers, present a USD 25 billion cumulative opportunity by themselves.

The report further raised concerns that the coronavirus presents near-term hurdles for the industry despite a healthy outlook for the wind turbine supply chain over the next decade.

Over 44GW of combined peak wind demand in the US and China is likely to strain the wind supply chain in 2020, it added.

Additionally, a shortage of several critical components has been further exacerbated by the coronavirus crisis.

Commenting on the after-effects on the industry, Shashi Barla, Principal Analyst at Wood Mackenzie, said that “a rush in installation activity has caused a shortage of blades and bearings. The coronavirus has jeopardised approximately 10-15 percent of production volumes in China, Spain and Italy. However, Chinese companies resumed production in early March, resulting in a downgrade of the only 3GW for 2020 installations.”

Barla further added that “just over USD 6 billion worth of turbines and component supply production is already jeopardised in Q1 2020. The coronavirus impact could worsen this if facilities continue to face delays in resuming production.”

“Turbine OEMs and suppliers can mitigate the impact by increasing manufacturing during the latter part of the year and relocating supply to other markets, such as India and Mexico,” Analyst suggested.

According to WoodMac, US PTC phaseout post-2020 will spur demand for nearly 5,000 wind towers in 2020, compelling turbine OEMs to increase tower imports into the US despite anti-dumping duties. US tower imports from Canada, Indonesia, South Korea and Vietnam surpassed a combined total of USD 900 million over the past 6 years.

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Manu Tayal

Manu is an Associate Editor at Saur Energy International where she writes and edits clean & green energy news, featured articles and interview industry veterans with a special focus on solar, wind and financial segments.