According to a new report from MAKE Consulting, the good news is that with 270 GW of installations worldwide, wind power has clearly become a mainstream energy choice. The bad news, however, is that challenges remain, and the U.S. is slated for a huge drop in new installed capacity this year.
The 2013 Global Wind Power Asset Ownership report says that over 70% of top owners view wind as a key part of a diversified generation portfolio strategy, while 85% of these owners seek to add value throughout the development value chain all the way to O&M, thus demonstrating that wind is now seen as a core generation technology.
The goal of many within the industry is for wind to be the most cost-competitive electricity source, free of subsidies and preferential treatment, since these are anathema to long-term sustainable industry growth, MAKE says. However, the report adds the transition from a subsidized to an unsubsidized industry at a time of reduced economic growth and some balance sheet pressure in Western markets is affecting the investment strategies and portfolio choices of asset owners.
As financial constraints lead to the prioritization of returns, capital recycling and balance sheet restoration, MAKE says it has observed a marked rise of co-ownership strategies, an increase in secondary asset trading, and new financial owners being drawn into the sector. A predominant favor toward onshore investments continues to be the trend, but a small core of offshore specialists has emerged, the report adds.
Utilities and independent power producers are seeking co-ownership opportunities, with partnerships with financial investors viewed as extremely mutually beneficial, the report continues. As a result, MAKE says it has observed an increase in the trading of assets between 2011 and 2012 and is on track to reach over 6 GW in 2013, equivalent to nearly 16% of MAKE