In its ‘Global Wind Power Market Outlook Update: Q2 2019', the analyst has upgraded its global wind power outlook by 11GW, from 2019 to 2028, a 1.5% increase from the previous quarter, with the US and China leading demand.
The report forecasts average global annual capacity additions of around 71GW from 2019 to 2023 and 76GW from 2024 to 2028.
Wood Mackenzie Power and Renewables director Luke Lewandowski said: “A 5GW upgrade in the global offshore sector will yield 129GW of new capacity and a compound annual growth rate (CAGR) of 26%.
“Overall, the outlook is positive and global wind power continues to prosper due to both economic and social benefits."
In the report the US market has been upgraded by 16% quarter-on-quarter, highlighted by a 3.8GW upgrade in 2021 alone.
Lewandowski said: “Eligible offtakers are rallying to capitalise on the renewable electricity production tax credit (PTC) before the full value incentive expires in 2020 and then phases down.”
He said developers qualifying wind facilities in 2017 are eligible for 80% of the full credit amount, which is incentivising US wind market growth.
“New state-level targets in the US and the strengthening of renewable portfolio standard mechanisms across the country is expected to support post-PTC demand,” he added.
An upgrade of 1% quarter-on-quarter in Latin America is driven by near-term upgrades in Brazil and Mexico, according to the study.
The report has upgraded Northern Europe by 6%, which offsets “an otherwise dismal outlook” update in Europe, as the other sub-regions combine for a 2.2GW downgrade, according to the analysis.
“Permitting challenges and undersubscription of onshore tenders in Germany and France have impeded growth. However, an increasing appetite for unsubsidised projects and a proliferation of demand from the C&I segment across Northern Europe both support a modest 0.6% upgrade for Europe quarter-on-quarter,” said Lewandowski.
Slow project development due to political instability, immature support mechanisms and increasing competition from solar has resulted in a 2% downgrade quarter-on-quarter in Africa.
In China, onshore and offshore policy deadlines underpin a 2.9GW quarter-on-quarter boost, according to the study.
Lewandowski said: “Onshore developers are rushing to comply with a new policy that requires projects to be commissioned by the end of 2020 in order to capitalise on feed-in tariffs (FiTs) before a subsidy-free era begins.
“Offshore developers must commission projects before the close of 2021 if they are to utilise the current level of offshore FIT.”
Current market conditions in India have impacted the Asia-Pacific region’s near-term outlook, resulting in a 4% downgrade quarter-on-quarter.
Due to the government-imposed auction ceiling prices and delays in commissioning awarded projects, the report has decreased the outlook for India by 24% from 2019 to 2022.
Reliability concerns in Thailand have led to a 37% downgrade over the 10-year outlook.
