1. Home
  2. Featured
  3. WoodMac sees $600bn to be spent on wind turbines by 2028
WoodMac sees $600bn to be spent on wind turbines by 2028

WoodMac sees $600bn to be spent on wind turbines by 2028


Despite demand fluctuations and Covid-19 impact, analysts expect $60bn annual average in spending

Despite demand fluctuations and the impact of the coronavirus, analyst at Wood Mackenzie expect $600bn to be spent on wind turbines and its components in the ten years through 2028, or an average of $60bn per year.

That would be an increase of 8% compared to 2019 spending levels.

Higher average turbine prices and a 20% growth in offshore demand reflect a 37% uptick in supply chain potential, representing a cumulative value of $222bn by 2028, the analysts said.

The Covid-19 pandemic presents near-term hurdles, however, as more than 44GW of combined demand in the US and China is expected to strain the supply chain this year.

“Just over $6bn worth of turbines and component supply production is already jeopardised in Q1 2020. The coronavirus impact could worsen this if facilities continue to face delays in resuming production,” Wood Mackenzie principal analyst Shashi Barla sid.

“Turbine OEMs and suppliers can mitigate the impact by increasing manufacturing during the latter part of the year and relocating supply to other markets, such as India and Mexico.”

In the US, the phase-out of production tax credits (PTC) after this year will spur demand for some 5,000 wind towers in 2020, the analyst adds. That will compel OEMs to increase tower imports into the US despite anit-dumping duties in place against imports from Canada, Indonesia, South Korea and Vietnam.

“The US Department of Commerce slapped preliminary anti-dumping rates on these four countries in 2020, ranging from 5.04% to 65.96%, to create a level playing field for domestic tower suppliers,” Barla said.

“A surge in demand will force turbine OEMs to continue imports into the US, incurring additional import duty costs between $60-90m in 2020. Turbine OEMs will be forced to absorb the additional costs and renegotiate contracts with asset owners,” added Barla.

Source: rechargenews
Anand Gupta Editor - EQ Int'l Media Network


Your email address will not be published. Required fields are marked *