The global wind turbines market is set to experience a degree of turbulence over the next few years, rising steadily from $76.54 billion in 2015 to $81.14 billion in 2019, and dipping to $71.21 billion in 2020, according to research and consulting firm GlobalData.
The company's latest report states that technological developments have paved the way for more effective and reliable equipment and machinery, making wind one of the most reliable sources of power in the global market. The steady growth of the wind energy market up to 2019 will be fuelled by declining costs of wind power generation, financial incentives by many governments, and growing environmental concerns.
Swati Gupta, GlobalData's Analyst covering Power, notes: "Despite the initial year-on-year growth of the wind turbine market during the forecast period, the expiration of Production Tax Credits (PTC) in the US market in 2020 will have a negative impact on global wind turbine installations and market value in the same year.
"The PTC for wind energy, which pays $23 per megawatt hour ($0.023 per kilowatt hour), will remain until 2016, followed by incremental reductions in value for the years up to January 2020. The projects which start construction in 2017 will get 80% of the credit, those that qualify in 2018 will get 60%, and those in 2019 will get 40%. The PTC for wind facilities will be phased out completely if the construction starts after December 31, 2019. Thus, the wind power market is expected to see a huge rush of capacity additions during 2016–2019 to take the benefits of tax credit extensions before they expire."
In terms of regional market share, China is set to continue its dominance of the sector throughout the forecast period, and will be responsible for 26% of the market in 2020, a long way ahead of second-place Germany, with 10%. To meet growing electricity demand, China has focused on increasing its installed capacity mainly from renewable energy sources and nuclear power plants.
Gupta continues: "Upgrading electricity infrastructure to meet future transmission and distribution demands will be a major challenge for wind power development. Existing grid infrastructure is deemed insufficient and there is an urgent need for modifications to be made to the existing grid and its regulations to accommodate for specific wind power characteristics. Indeed, the development of new grid infrastructure requires massive investment, in terms of financial resources and time, which could reduce the market's medium-term growth."
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