Even in the context of a global economic crisis, annual installed wind capacity in Asia is expected to grow 20-30% on average over the next five years to reach 110 GW by 2014, reports Windpower Intelligence, the research division of Windpower Monthly, in two, 200-page investment reports based on detailed surveys. One report looks at trends and investment opportunities in Asia to 2014, with a special focus on India, while the other focuses on China.
Under a best-case, high growth scenario, which assumes even stronger growth in China driven by significant new policies, greater investment in grid construction, and a surge in offshore development, the Asia total could reach as much as 150 GW. In tandem, there will a shift in the size of wind turbines installed, with machines rated at 1.5 MW in capacity and more starting to dominate.
"The wind industry in China and Asia is going to change very quickly," says Philip Swinden of Windpower Intelligence. "Expect large turbines to dominate, developers and manufacturers to become more concentrated, unit costs to decrease and offshore to develop rapidly." This will result in "new opportunities for foreign suppliers with components and materials probably among the best bets," he adds.
China and India, which already host 98% of Asia's wind capacity, will continue to dominate. With a combined total of just over 21 GW installed, the two countries accounted for 18% of the 120 GW installed worldwide by end 2008. Around 15 GW of new capacity is expected for India in the three years to 2012. It will be China, though, that drives Asia's growth. It is forecast to install a further 29 GW to take its cumulative total from 12 GW at end 2008 to over 40 GW by 2012, under Windpower Intelligence's expected growth scenario. By 2014, India's cumulative wind capacity is forecast to be 60 GW, although under the best-case scenario this jumps to 100 GW, a compound annual growth rate of 33%.
Development will continue to be concentrated within a handful of wind-rich regions or states. Of the capacity installed in Asia by end 2008, 70% is located in just eight regions, provinces or states, all either in China or India (table). Nearly half of it is located in just two regions -- the state of Tamil Nadu in India, with over 4 GW installed, and China's Inner Mongolia autonomous region, with 3.7 GW. While growth in Tamil Nadu will remain, other Indian states are closing in on it, with Maharashtra, Gujarat and Karnataka offering good development opportunities, reports Windpower Intelligence.
None of the Indian states can compare to China's Inner Mongolia, however, which is set to become the leading region for wind power development in Asia. Over the next ten years, the market for wind power equipment in Inner Mongolia is predicted to be worth around $1.47 billion, notes the China investment report. With plans for a number of huge wind power bases in other Chinese provinces or regions, demand for equipment elsewhere in China will also be strong.
Opportunities for foreign turbine suppliers in China's market, though, will continue to be constrained, notes the China investment report. Domestic manufacturers, already with 59% of the market last year, will increase their share over the next five years. The top three local turbine manufacturers, Goldwind, Sinovel and Dongfang, could alone account for as much as 75% of the market within five years.
With component supply chain bottlenecks forecast to remain, however, there will still be significant business opportunities for overseas companies. Supply of bearings, power control systems and blade materials will provide the best opportunities, the report says. Demand for carbon fibre composites, used in blades, is predicted to double in the next five years. Suppliers of blades for 1.5-2 MW turbines, in particular, and for bigger machines, will also have many new opportunities as China's market continues to increase its use of multi-megawatt machines.