Falling costs and developers’ and investors’ increasing tolerance of risk in the wind power sector should enable capacity growth to occur over a broad geographical base in this period.
More than 60 markets will add at least 100MW each in the coming decade, according to Fitch's global wind power outlook.
However, 85% of the expected new capacity will be concentrated in the ten fastest expanding markets, the research forecasts.
Broader base
As wind power costs fall, developers and financiers are becoming less risk-averse, the analysts noted.
This lower cost will accelerate further as more markets move to auction systems and will make wind even more attractive, Fitch predicted.
The number of 1GW markets will increase from 31 to 38 by the end of the period, while the number of 100MW markets will reach 67, up from 59 at the end of 2017.
Wider picture
However, just a few big markets will remain crucial to the success of the wind power industry over the next decade, Fitch added.
Growth will be fastest in China, the US, Germany, India, the UK, France, Turkey, Mexico, Brazil and Australia.
Despite wind power’s expansion from 514GW at the end of 2017 to 980GW by 2027, its share of total non-hydropower renewable energy capacity will decrease from 50% to 47% largely due to solar PV expanding at a faster rate, Fitch noted.
Wind’s share of total non-hydropower renewables generation will remain stable at 51%, however, because of improving generation efficiency — especially as the offshore wind sector, which can access higher wind speeds, expands.
China
World leader China is expected to continue its dominance of the wind power sector as it tackles grid bottlenecks and expands its offshore sector during the ten-year forecast period.
It will account for 45% of the 466GW global capacity growth to 2027.
Fitch expects the country will also transition successfully towards subsidy-free wind power in this period.
China has a growing backlog of subsidy payments — currently valued at $17 billion, according to its National Energy Administration — the analysts noted.
Therefore, future growth in the sector will likely require that new project developments are close to unsubsidised.
Over the ten-year period to 2017, the country achieved average annual additions of 19GW, the analysts said.
After a slowed rate of annual growth at the start of the forecast period — down to 17GW in 2019 and 2020 — capacity increases will accelerate to more than 22GW per year between 2021 and 2027.
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