For the first time since 2004, global wind turbine demand is expected to contract this year, by as much as 5%, finds a new study from MAKE Consulting.
The report says the overall decrease is mainly due to declining demand in the U.S., Spain and Italy – historically key wind energy markets with extensive local supply chains.
This has created the need for capacity adjustments, while growth opportunities in new and emerging markets and the growing demand for larger wind turbines require additional investment due to local-content requirements or logistics.
Fundamental shifts in market demand caused by changes in support policies, power-demand projections and overriding macroeconomic factors are causing substantial capacity adjustments in traditional wind power supply chain manufacturing hubs, the report continues. Unstable support policies in key wind markets, such as the U.S. and Spain, have already resulted in significant redundancies and facility closures in the last 12 months, having a major impact on the global supply chain. Turbine OEMs have begun to withdraw production capacity from secondary markets and instead concentrate production in core markets with higher volumes to take advantage of economies of scale.
At the same time, the report says a need for expansion and new investments in the supply chain is created partly by growth opportunities in new and emerging markets associated with localization policies – e.g., Brazil and South Africa