Our annual survey looks at the status of 26 regional markets and their potential. The big news of 2001 was the massive growth in the US -- and the big news now is that of US market stagnation, with little hope of the Production Tax Credit for wind being reintroduced soon. As a result, the global wind market in 2002, for the first time ever, is likely to contract by 4% in dollar terms, reports market analyst Merrill Lynch. Its view is backed by investment bank HSBC, which in late January issued a wind industry profit warning.
Both companies, however, are bullish on the long term growth potential, at least until 2010, as is Frost & Sullivan, an international market consultant, and Dresdner Kleinwort Wasserstein, an investment bank. But the period from "2002-2005 could offer significant growth challenges," says Merrill Lynch, raised by the regulatory hiccup in the US and maturing markets in Europe: Spain and Germany are near their practical peaks. Germany has scope for "two more very big years before market saturation becomes a real issue," while Spain's decline will begin from next year. Market veteran Denmark is "virtually saturated," though Merrill Lynch, in a report released last month, ignores the Danish 500 MW repowering potential.
"The ability of the wind power industry to move into a new phase of growth is contingent on new markets evolving rapidly within the next two to three years." Merrill Lynch cites South America, UK, France, China and India, but disregards Australia, which has new market regulations for potentially rapid growth. Offshore growth will come near the end of the decade. The US "should be the world's largest wind market for the next 20 years," returning to strong growth in 2004 and peaking at 4 GW a year (5% of electricity generated).
Merrill Lynch expects the global wind market to peak in 2010-2015 at $11 billion a year, up from $5 billion in 2001, an increase of 33% over the previous year. The CAGR to 2010 in dollars is projected at 8.8%, lower than the 13.5% projection for installed capacity growth to account for a continuation of the rapid fall in technology prices.