Slow growth beats boom and bust

Another year of sluggish growth, squeezed margins and fierce price competition from natural gas lies in wait for the wind-power industry OEMs in 2018.

After the bumper year of 2015, when more than 60GW of new wind capacity was installed worldwide (though not all connected), the new-build rate slowed to around 55GW in 2016, and looks set to be around 51-52GW for 2017.

Most of that downturn can be attributed to China's recent focus on quality over quantity, but few of the rest of the world's markets are doing much to pick up the slack.

India's slump looks temporary, but Brazil remains in the economic doldrums, and South Africa is stuck in coal-backed politics.

Canada and Australia could, and should, be doing much more. The US wind scene currently looks healthy, despite the federal administration's environmental vandalism, but the clock is ticking on the production tax credit.

Europe has its own political and economic problems that impact on wind development, not least generation over-capacity from ageing coal-fired plant, pushing down wholesale prices.

Sluggish growth is preferable to boom and bust, though. Over-optimism meeting harsh reality is one of the themes that runs through the new edition of Wind Power: the struggle for control of a new global industry, by FTI Consulting's Ben Backwell, which chronicles the high casualty rate among wind-turbine makers.

Most, like Bonus, Tacke, Areva and Alstom, were swallowed by the bigger fish. Some, like Clipper, Zonk and Enron, crashed and burned. Others, Sinovel and Suzlon, come to mind, are shadows of their former selves. And then there are the joint ventures — Vestas and MHI, Nordex and Acciona, Siemens and Gamesa. Consolidation has surely not finished yet.

Small steps

Our annual review of the year's best wind-power hardware provides some pointers to how the dwindling number of turbine manufacturers are responding technologically to slow growth and intense competition.

Extracting more energy from essentially the same package characterised many of the leading contenders — from Vestas' power rating and rotor diameter upgrade on its well-proven 2MW platform, to the development of SGRE's B82 blade for its new offshore turbine, building on the lessons learned from the B75 unit.

As long as future volumes remain so uncertain, technological progress is likely to be made in small steps. But such incremental improvements are adding up to significant advances.

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