The consultants downgraded their 2017-2019 outlook by 1.3GW, but upgraded their 2020-2026 forecast by more than 4GW — resulting in a ten-year compounded annual global growth rate of 3.8%.
Overall, Make increased its expectations for total installed capacity by less than 1% with an upgrade on the previous quarter of more than 5GW in the offshore sector offsetting downgrades in the onshore sector in markets such as the US, Australia and the Philippines.
North America
Declining in interest in off-take deals — through both power purchase agreements (PPAs) and hedge deals — prompted Make to downgrade its forecast for the US by 3% between 2017 and 2019.
In November, the US House of Representatives passed a reform bill cutting the production tax credit (PTC) incentive, but the Senate protected the support scheme in its equivalent bill. The current uncertainty could also disrupt the US wind industry, Make added.
South America
Upcoming auctions in Brazil and Argentina in December would give a boost to stalled and emerging markets, the consultants argued.
Make described the A-4 and A-6 auctions in Brazil next month as "pivotal" in reversing a "lack of PPA-signing activity" in the country since 2015.
It argued the results of the two countries’ auctions would "help shape the region’s growth profile over the next several years’".
However, November's results in the Mexican auction — in which solar took about 55% of the capacity available — revealed the "threat" to wind power from other forms of renewable energy, Make stated.
Overall, the analysts downgraded its outlook for Latin America by 1% "primarily due to the impact of project-level adjustments in Brazil".
Europe
The plunging cost of offshore wind in the UK and Belgium resulted in a 13% upgrade in northern Europe’s ten-year outlook.
In the UK’s second contract for difference (CfD) round in September, two offshore projects secured deals at £57.50/MWh (€64.10/MWh) — a reduction of roughly 50% since the UK’s first auction round in February 2015.
Meanwhile, in Belgium last month, a strike price of €79/MWh was awarded for three offshore sites that are to be connected to the government-backed Modular Offshore Grid hub.
Project-level adjustments in southern Europe had a minimal impact on the forecast, although Italy’s recently adopted 55% renewable energy target by 2030 "offers (an) upside" to the current outlook, Make stated.
In eastern Europe, the outlook is largely unchanged.
Investor interest in Ukraine — including Chinese lenders’ plans for a 500MW wind project in the south of the country — supports an upgrade of more than 5%.
Meanwhile, promising pipelines in Estonia and Georgia boost the outlook for the region post-2020, according to Make.
However, challenging long-term development conditions in Azerbaijan, Hungary and the Czech Republic have resulted in each market’s outlook downgraded by 2020.
Asia-Pacific
Curtailment remains a challenge in China, Make stated, but believed "there are signs of improvement", with curtailment levels beginning to fall.
However, competition from solar PV in the country’s south and the growth of grid-connected wind capacity in the north impacting curtailment levels would provide challenges.
The adjustment to an auction-based market has created market uncertainty and slowed development in India, the consultants conceded.
But government initiatives aimed at accelerating recovery — including the promise of an additional 4.5GW in auctions — may stimulate growth once implemented.
In Taiwan, plans to almost double offshore target prompted Make to upgrade the country’s outlook by 128%.
However, the steady growth in China and India and emergence of Taiwanese offshore looks set to be offset by Australia’s decision not to adopt the Clean Energy Target (CET), which "creates a void post-2020", according to Make.
Elsewhere, in the Philippines, the government is considering whether to discontinue the existing feed-in tariff allocation scheme — "significantly dimming the outlook in this promising market", Make stated.
.png)
.png)
.jpg)
