Renewables

Wind industry set for record growth until 2025 but bottlenecks are looming

Wind industry record growth 2025 bottlenecks looming

Photo: Ian Simpson on Unsplash

Published

March 27, 2023

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Published:

March 27, 2023

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After a disappointing year in 2022, the wind industry can expect record installations in both onshore and offshore markets by 2025, GWEC said in its annual report.

Global Wind Energy Council warned of supply bottlenecks in the United States and Europe threatening the industry from as soon as 2025 unless policymakers facilitate supply chain investments. According to the annual Global Wind Report, the sector is facing a ramp-up from the US Inflation Reduction Act, increased ambition in Europe, continued rapid buildout in China and large developing countries speeding up their deployment.

After a disappointing year in 2022, a fast-evolving policy environment has set the scene for a period of accelerated deployment over the coming years, with the industry set to install 136 GW per year, translating to a compound growth rate of 15%, the authors said. They expect 680 GW of new capacity by 2027.

But spare manufacturing capacity is expected to run out by 2026, GWEC underscored.

US had largest slowdown among world’s regions

The global industry connected only 77.6 GW to the network in 2022, translating to year-on-year growth of 9%, to 906 GW. GWEC attributed the slowdown primarily to the US. Latin America, Africa and the Middle East are the other main laggards.

The onshore wind market added 68.8 GW last year, with China contributing 52%. The offshore segment grew by 8.8 GW to 64 GW.

The wind sector is ready to bounce back in 2023 and exceed 100 GW in total new installations for the first time, the organization pointed out. It expects 115 GW, of which 97 GW would be onshore.

The wind industry is expected to add more than 100 GW for the first time in 2023

“We need much more active global collaboration to enhance and de-risk the supply of critical raw materials in order to ensure that the green economic revolution had the inputs it needs in this crucial period,” GWEC’s Chief Executive Officer Ben Backwell said.

Many manufacturers suffered losses due to the “race-to-the-bottom pricing, as a result of misguided government policies around procurement and offtake arrangements, exacerbated by higher inflation and logistics costs,” the organization said. Wind projects have
been delayed or stalled by inadequate and inefficient permitting and licensing rules, the authors underscored.

Global capacity seen topping 1 TW in 2023

While moves to further incentivize investment in supply chains and create more regional diversification and resilience are to be welcomed, attempts to create rigid local content requirements or implement protectionist trade measures create the risks of sharply higher costs or even serious delays to the necessary expansion of wind and renewables, the document reads.

Later this year, wind energy is forecast to exceed 1 TW in installed capacity. The first turbines were registered four decades ago. The report shows the second terawatt is expected to come online by 2030.

The second terawatt should be online before the end of the decade

As for the world’s manufacturing capacity, China is dominant with 77 nacelle assembly facilities for onshore wind turbines and 20 plants making offshore machines, followed by Europe’s 16 and five manufacturing units, respectively.

Earlier, the International Renewable Energy Agency, IRENA, earlier said the world’s wind energy capacity grew 9.1% in 2022 to 899 GW. The onshore segment advanced 8.5% to 836 GW.

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