Wind power outlook in Eastern Europe and Russia upgraded by 17% QoQ over next decade

An auction-triggered awakening in Poland and a growing confidence in developers' ability to comply with local content requirements in Russia led to a 17% wind power capacity increase QoQ in Eastern Europe and Russia, according to new research from Wood Mackenzie.

This increase influenced a 3.1GW upgrade in Europe QoQ, as noted in Wood Mackenzie's 'Global Wind Power Market Outlook Update: Q3 2019'. However, undersubscription of the last two onshore wind tenders in Germany resulted in a 3% downgrade in Western Europe QoQ. All other European sub-regions were upgraded this quarter. This was underpinned by a 3% elevation in North Europe, headlined by improved policy visibility in Ireland (+666MW) and continued investment in Finland (+426MW). 15 of the top 20 countries globally are expected to more than double their installation base by 2028.

Slight global upgrade masks ongoing market challenges in India and Germany

“The outlook for Germany has been downgraded by 2.3GW as the last two onshore wind tender rounds, held in August and September of this year, went heavily undersubscribed. This exacerbated the crisis faced by the country’s onshore wind sector, which continues to encounter public opposition and court appeals.

"With a 5% upgrade in the US over the outlook period, slow-moving utility interest will mobilise to capture expiring wind power Production Tax Credits (PTCs). Deliverability concerns continue to mount as the backlog of contracted and high-probability capacity swells beyond 23GW for 2020, causing some spill over of 'excusable disruption' capacity into 2021,” said Luke Lewandowski, Wood Mackenzie Research Director.

With less than a 0.3% decrease QoQ in Latin America, near-term upgrades have given way to medium-term market challenges in key markets. H1 2019 wind turbine installation activity puts Mexico and Argentina on track for a record annual capacity this year. Strong turbine order intake in Brazil in H1 will prevent a downturn in 2020.

Market turmoil in India cuts Asia Pacific outlook

Relentless market disorder persists in India, where a 3.2GW downgrade from 2019 to 2021 cuts the 10-year outlook for Asia Pacific - excluding China - by 2.8%.

“A carefully-watched legal dispute in India’s Andhra Pradesh, a key wind power state, could eventually spoil opportunity in other states and disrupt the outlook. However, there will be no significant change to the rest of Asia Pacific QoQ other than the financial close of a project in New Zealand. This will boost an otherwise dormant market.

“China’s domestic supply chain will limit developer ambitions to capitalise on the expiring feed-in-tariff (FIT), therefore resulting in no change to the outlook in the country QoQ,” added Mr. Lewandowski.

Project level adjustments in the Middle East and Africa result in a modest 0.3% downgrade QoQ. Construction of REIPPP Round 4 projects in South Africa have commenced, underpinning what will be a record 2GW+ installation year for the Africa region in 2020.