FTI Intelligence has raised its forecasts for the global wind market, which is headed for a second consecutive record year in 2015. New installations globally in 2015 are expected to reach 59GW, compared to the 52GW installed in 2014.
Total installations for the 2015-2019 period are now expected to reach 264GW – an increase of 5.6 percent from FTI Intelligence’s first quarter 2015 forecast. Total installations for the 2015-2024 period are expected to reach 592GW corresponding to a 3.3 percent compound annual growth rate between 2014 and 2024.
The new installation forecasts in 2015-2019 were upgraded by 12.4 percent for North America. The key drivers are the expected strong growth in Canada in 2016 and the optimism created by the political debate about the revised U.S. federal Clean Power Plan. FTI Intelligence has increased its Asia Pacific forecast for total installations by 2019 by 5.6 percent as it expects strong continued growth in China due to a clear visibility of project pipelines in 2016.
FTI Intelligence estimates firm order intake for the top 10 wind turbine OEMs in the first half of 2015 was approximately 20GW. Danish-owned manufacturer Vestas leads the intake, driven by near record orders of 3GW in the second quarter of 2015. Chinese companies, Goldwind and United Power take second and third place, respectively, by taking the advantage of strong market growth in their home market. Germany’s Siemens, the second largest wind turbine manufacturer in 2014, saw a relatively low order intake due to a lull in offshore orders in both the first and second quarters of 2015.
Confirmed offshore orders for the first half of 2015 totalled 1,203MW, led by Senvion (443MW) followed by MHI-Vestas (423MW) and Siemens (337MW).
The Global Wind Market Update – H2 2015 Briefing also highlights the acceleration in M&A activity in the wind sector, with a large number of deals announced or finalised. On the supply side, the highlights were the recent acquisition of Acciona Windpower by Nordex, regulatory approvals of the GE-Alstom acquisition, and the merger of Chinese turbine manufacturers CSR and CNR, respectively. These deals followed the acquisition of Senvion by Centerbridge Partners earlier this year.
There were also a number of deals involving component manufacturers, such as Ming Yang’s acquisition of China Smart’s RENergy, one of its top electric components suppliers, ZF’s acquisition plan to take over Bosch Rexroth’s industrial gears and wind turbine gearbox business, and most recently GE’s acquisition of modular blade producer Blade Dynamics.
On the demand side, onshore M&A continues to be driven by strong appetite for assets of yieldcos, including deals such as the acquisition of projects from Atlantic Power and Invenergy in the US by SunEdison controlled TerraForm Power and the acquisition of projects and equity in Brazilian developer Renova by TerraForm Global. The market also saw GE buying a 49 percent stake in Enel Green Power’s 760MW portfolio of operating and under-construction renewables assets in North America.
“Although the wind market still suffers from policy uncertainty, continual improvements in technology and innovations in finance are changing ‘facts on the ground’ and making wind power directly competitive with fossil fuels in growing areas of the world – despite low oil and gas prices,” says Aris Karcanias, Managing Director at FTI Consulting and Co-Lead of the Company’s Clean Energy practice. “There is a new sense of maturity and confidence in the wind industry, as well as an ongoing process of consolidation around companies with strong financial and industrial capabilities.”