A global perspective from Steve Sawyer
Last year was a great one for the wind industry: Our figures* show 44% annual market growth and record installations of more than 51GW; a strong recovery from the industry's biggest-ever slump in 2013. After slipping just below our Global Wind Energy Outlook (GWEO) moderate scenario at the end of 2013, 2014's spectacular growth puts us back on track with the GWEO advanced scenario for 2014, probably for 2015 and perhaps 2016 as well. After that, it becomes more difficult.
Nobody foresaw that China would install 23GW, but given the lowering of the feed-in tariff at the end of 2015, we can expect similar numbers this year. The Indian wind industry has a de facto target of 5GW per annum for the rest of the decade and into the next, due to the new government's enthusiastic targets. We don't expect it to reach that in 2015, but it will move in that direction. We expect the installed capacity in the Asia region as a whole to double between now and the end of 2019, adding another 140GW; led by China and India, but with a number of smaller markets contributing by the end of the period.
For Europe, we projected a slight downturn for 2014, but we were wrong, and overall Europe's annual market grew by more than 5% last year. Germany's spectacular performance is likely to be matched in 2015, or nearly so, and will remain strong throughout the period. Growth in the UK will depend somewhat on the outcome of this year's election in May, but the European offshore segment as a whole seems much healthier than it was this time last year. We expect Europe to continue its march towards its 2020 targets, installing about 70GW over the next five years.
North America is always the hardest market to call, and we predicted more of a recovery in the US market in 2014 than actually happened; we're hoping to see much of what was expected in 2014 installed in 2015 and 2016. But what happens after that? Canada has an equally uncertain future after 2016. Mexico's existing legislation sets another de facto target of at least 2GW a year, but sorting out the details of the energy reform means the country will have to play "catch-up" to reach these goals in 2017 and 2018. We expect to see about 44GW installed in the North American region between now and 2019.
Emerging markets
We underestimated the growth in Latin America last year. On the basis of existing contracts, the Brazilian industry is expected to install another 12-13GW over the next five years, and with four auctions planned during 2015, that number could rise substantially. Wind will likely surpass gas in terms of installed capacity by the end of 2017, and assume its place as the number two power source in the country.
Chile's wind market finally took off in 2014, and although it won't rival Brazil, it will evolve into a modest but steady market, while Uruguay continues to surprise. Peru, the Central American countries and others will contribute to what we expect to be about 25GW installed in Latin America over the next five years, largely led by Brazil, but with other markets making significant contributions to the total as time goes by.
The Africa and Middle East region reached nearly 1GW of annual installed capacity for the first time in 2014, and we expect that it will pass the 1GW-mark with room to spare in 2015, and not look back. Driven initially by South Africa and Egypt, we see Morocco, Ethiopia, Kenya, Tanzania and Ghana as emerging markets to pay attention to. In the Middle East, there are new projects coming soon in Jordan, and if the current negotiations succeed, we could see the emergence of the next "big" market in Iran towards the end of the decade. We project total installations of a bit more than 13GW in the region through 2019.
Australia is the main market in Pacific region, and was the only one to add capacity in 2014. While the current government is trying to kill the renewables industry, we don't think it will succeed, or at least not completely; but still we don't expect more than 4GW to be installed in the Pacific region between now and 2019.
So this is what we expect the markets will do over the next five years. Asia will continue to dominate, followed by a steady Europe, and a volatile North America. Latin America surges ahead, and so does Africa, a few years behind. Prognostication is a dangerous business, and we will of course revisit the issue in 12 months' time to see how we did, and to adjust our rolling five-year forecast in the light of whatever surprises (good or bad) 2015 will inevitably bring.
Steve Sawyer is CEO of the Global Wind Energy Council
* Figures include some Brazil capacity pending grid connection.
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