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Structural shift starts to show

If all news is cyclical, the last few weeks saw the cycle of annual reports on the state of the industry, past and predicted. As any financial report writer will say, one bad year makes the next look a lot better -- and last year was bad.

For 2014, the Global Wind Energy Council has predicted a 34% surge in installations to 43GW by year end. Much of this is likely to come from the US, with Brazil and China also supplying a large proportion. BTM Navigant was a little more circumspect. The problem with crystal balls is that they can't see around corners.

The future of the industry still seems to pivot on two points. One is the policy making and political shenanigans that appear to be happening at different levels in each market. "Energy is political," said European Wind Energy Association president Andrew Garrad at the body's annual conference in Barcelona. How true. In the UK, despite the falling cost of onshore wind and the governing Conservative Party's love of spending cuts, it seems to favour riskier, more expensive offshore wind. The fact that many of the UK's high-wind sites fall within Conservative constituencies seems to hold more influence over policy than technical or economic arguments.

This approach seems to be catching on in Poland too. Ahead of this month's EU elections of member state candidates, the opposition Law and Justice party is campaigning with age-old disproven wind-turbine syndrome accusations.

There is more than a feeling that the industry, and trade associations specifically, could be more combative in fighting these issues. One positive example is Germany, where a proposed renewable energy bill triggered a series of stoppages and protests. Market leader Enercon, as well as Senvion and Vestas, all joined wind association BWE-organised protests against the moves. Enercon even threatened to ice investment plans. In the event, the draft bill was considerably watered down with the industry generally happy.

The second pivotal point is the changing structure of the industry itself. The momentum appears to be shifting away from pure players towards conglomerates such as GE and Siemens. The likes of Enercon and Vestas continue to produce onshore turbines, but offshore is looking a different beast. Outside China, Senvion (formerly Repower) remains the only pure player, selling a platform that dates back to the mid-2000s.

Offshore split

Looking beyond the 6MW class, it is unlikely any 8MW-plus turbines will be produced by a pure turbine manufacturer. Senvion has no plans to launch a new platform before 2020, while Gamesa and Vestas are tied in with partners Areva and MHI respectively. In China, most manufacturers - with the possible exception of Sinovel — are part of multinationals and backed by the state.

It is impossible to tell how this will benefit the market, but it is further proof that offshore is splitting away and that development and production in this sector is becoming a rich man's game. Even GE is nervous of entering, and the shift from the many to an elite few could have future repercussions on choice and cost.

Keeping with the cyclical, this month the American Wind Energy Association is holding its annual event. Its report on 2013 makes difficult reading, with just over 1GW installed. But there is hope as the Senate committee has added the production tax credit to a list of bills to be extended. Maybe 2014-15 will be the US's turn to shine again.

James Quilter is associate editor of Windpower Monthly

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