IHS Study: After Record-Breaking 2009, U.S. Wind Markets Face a Growth-Constrained 2010
May 26 2010 - 11:00AM
Business Wire
Following a record-breaking year of capacity additions in 2009 —
with 9.8 GW of wind projects installed — the U.S. wind market finds
itself confronting a growth constrained 2010 and a near-term market
landscape wrought with increased competition, according to a new
market study, US Wind Power Markets and Strategies: 2010-2025 from
IHS Emerging Energy Research. However, with the proliferation of
favorable state and federal policies, the U.S. wind industry is on
track to add more than 165 GW of new capacity through 2025,
resulting in a total installed base of 200 GW, according to the
study’s projections.
The study forecasts anywhere from 6.3- 7.1 GW of wind could be
installed in 2010, 40-60 percent lower than 2009 installations.
“2010 marks the first time since 2004 that the U.S. wind industry
will not surpass the previous year’s growth level. Despite
unprecedented federal wind incentives, reverberations from the
financial crisis continue to create a difficult near-term market
landscape especially in light of continued energy policy
uncertainty. However, the U.S. wind market is poised to emerge from
this near-term uncertainty with a clearer path toward strong future
growth,” according to IHS Senior Analyst Matthew Kaplan, one of the
study’s authors.
The U.S. wind industry will represent U.S. $330 billion in
investments between 2010 and 2025, with more than 90 percent
stemming from onshore wind, according to the study’s projections.
The Midwest, Great Plains and Rocky Mountain states will act as
major wind export hubs to areas with large appetites for
renewables, including California, the Mid-Atlantic and the South.
While the U.S. is closer than ever to tapping into its enormous
offshore potential with the the expected completion of the Cape
Wind project in 2013, offshore is expected to account for only 5
percent of total U.S. wind build in 2025.
“The unprecedented decline in power demand and electricity and
natural gas prices has had a profound effect on utility willingness
to ink power purchase agreements,” says Kaplan. Despite large build
years in 2009, leading independent power producers EDP Horizon and
NextEra Energy Resources have slashed wind build expectations
exemplifying near-term challenges.
As heightened transmission congestion and waning utility demand
for wind have strained growth in traditional ‘wind hot spots’
including Texas, Minnesota and California, developers have been
forced to prospect states with less prolific resources and more
arduous development conditions. “Transmission remains one of the
greatest barriers to the development of U.S. wind projects.
Coordinated national policies will be necessary to more efficiently
link the U.S.’ vast wind resources to high-demand regions, however,
even with enabling policies, there will be a lag of several years
for projects to become operational,” says Kaplan. “A national
renewable energy standard or federal energy policy legislation
along with a streamlined transmission siting and cost allocation
process are the essential ingredients to building a robust future
U.S. wind market.”
On the supply front, the sudden drop in turbine demand and a
heightened level of competition has created a seller’s market for
the foreseeable future. “Turbine manufacturers and their suppliers
will increasingly look to differentiate themselves based on cost,
product, services and track record,” says Kaplan. The U.S. supply
chain continues to expand domestically, supported by strong
prospects for future wind growth. The surge in U.S. wind
installations over the past three years has encouraged established
European players and new entrants from Asia to enter the U.S.
market, ensuring a steady supply of turbines to the U.S. market for
the foreseeable future.
About US Wind Power Markets and Strategies: 2010-2025
Released in May 2010, this 234-page study provides strategic
market intelligence on U.S. wind energy markets analyzing
development strategies, supply chain positioning, regulatory
changes and growth in the new market landscape. Emerging Energy
Research (www.emerging-energy.com ), now IHS Inc. (NYSE: IHS), is
the leading provider of analysis on clean and renewable energy
markets.
About IHS (www.ihs.com)
IHS (NYSE: IHS) is a leading source of information and insight
in pivotal areas that shape today’s business landscape: energy,
economics, geopolitical risk, sustainability and supply chain
management. Businesses and governments around the globe rely on the
comprehensive content, expert independent analysis and flexible
delivery methods of IHS to make high-impact decisions and develop
strategies with speed and confidence. IHS has been in business
since 1959 and became a publicly traded company on the New York
Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA,
IHS employs more than 4,200 people in more than 30 countries around
the world.
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