We have just released our Global Wind Report — Annual Market Update at Windergy in Delhi, detailing how in 2016, more than 54 GW of clean renewable wind power was installed across the global market, which now comprises more than 90 countries, including nine with more than 10,000 MW installed, and 29 which have now passed the 1,000-MW mark.
Cumulative capacity grew by 12.6 percent to reach a total of 486.8 GW. Wind power penetration levels continue to increase, led by Denmark pushing 40 percent, followed by Uruguay, Portugal and Ireland with well over 20 percent, Spain and Cyprus around 20 percent, Germany at 16 percent; and the big markets of China, the U.S. and Canada get 4, 5.5, and 6 percent of their power from wind, respectively.
Looking at our rolling five-year forecast, we see just under 60 GW installed globally in 2017, a more or less flat 2018 and then growth again out through the end of the decade to bring total installations up to just over 800 GW by the end of 2021, with the annual market rising to 75 GW in that year.
Global growth will continue to be driven by Asian markets. While we expect the Chinese market to increase a bit in 2017 due to the imminent feed-in-tariff reduction (and a spurt in offshore), it is unlikely to repeat its 2015 record of more than 30 GW, at least in the medium term.
2017 is likely to be another strong year for India. Elsewhere in Asia, Japan and Korea will continue to grow slowly, but we’re looking at increasing strength in the market in Pakistan, an impending surge in the Philippines, a new offshore market in Taiwan, and the ‘next big thing’ in Vietnam, pending critical regulatory changes, which are expected during the course of this year. Overall, we expect the Asian market to add 154 GW in the next five years, for a total of 357 GW by the end of 2021.
We expect Europe to proceed in line with its 2020 targets, and the evaluation of the Commission’s proposals for the post 2020 renewables regime, along with a strengthening Euro-zone economy, give rise to cautious optimism. We expect Europe to install about 73 GW of new wind power in the period out to 2021.
Offshore installations are expected to be up again in 2017, as well as in subsequent years, with much greater growth after 2020 given 2016’s (and 2017’s) dramatic price reductions. A number of countries have announced they are considering accelerating their offshore programs in light of the price points which have been reached in the past year.
North America as a whole looks pretty solid. After the deal struck at the end of 2015 for the extension and phase out of the production tax credit, the U.S. wind industry entered its longest ever period of policy stability and the 2016 market numbers bear this out. The results of the 2016 elections initially caused concern, but continued support at the state level, wind power’s increasingly competitive pricing and the more than 100,000 jobs (and growing) in the sector all bode well for a strong U.S. market for the next several years.
While the Canadian market is off its peak installation period of 1-1.5 GW/year from 2011-2015, we expect stable markets of .7-1 GW going forward. Mexico should have its first year installing more than 1,000 MW in 2017, in line with the new energy reform and government targets. Overall, we expect 61.5 GW to be installed in the North American region over the next five years.
The cancellation of all auctions in Brazil in 2016 due to the political and economic crisis is the dark spot in an otherwise bright picture for Latin America as a whole. Brazil’s market was down to just over 2 GW and although installations are expected to remain at least at that level through 2017, unless there are new auctions then the country’s newly established supply chain will be in trouble.
Elsewhere, we have a vibrant new market in Argentina, a dramatically strengthened Chilean market, the end of the big build-out in Uruguay and continued growth in Peru. The small markets in Central America will continue to make a contribution, and new climate and energy targets in the CARICOM countries mean that there will be significant activity there, although small in absolute terms. Overall, we expect just under 25 GW of new installations in the region in the period out to 2021.
After a relatively quiet 2016, we expect the Africa and Middle East region to start growing again this year. In South Africa, we hope the standoff with ESKOM will break, unleashing an enormous backlog of projects, and the government’s new Integrated Resource Plan, if it becomes policy, will facilitate this key African market’s reaching its potential.
Elsewhere in the region, Kenya’s 310-MW Lake Turkana project is now ready for commissioning, and we expect the initial buildout from last year’s auction in Morocco to begin this year, and carry on through 2020. There is also a pipeline of projects in Ethiopia; and we hope that the bottlenecks will be removed in Egypt so that country can begin to fulfill its potential as well as government targets.
Overall, we expect just over 12 GW to be installed in the Africa and Middle East region over the coming five years out to 2021.
After a very quiet 2016 where the only installations in the Pacific were 140 MW in Australia, we expect that the settlement of the Renewable Energy Target issue will drive substantial new growth in Australia. Increased investment has led to a pipeline of more than 1,500 MW of new wind projects either under construction or with construction expected to begin this year.
We don’t see much activity in the rest of the region in the near future, and Australia will be the main market driver leading to the installations of about 4.7 GW in the Pacific region in the period out to 2021.
This is how we see it as of late-April 2017. No doubt we will have both positive and negative surprises (there always are), but we have a lot of confidence in the wind power market going forward, as the technology continues to improve, prices continue to come down and the call for clean, renewable power to reduce emissions, clean our air and create new jobs and new industries only gets stronger with each passing year.