Wind turbine investments are expected to more than double by 2025 despite continued economic turmoil, according to a study released by IHS Emerging Energy Research (NYSE: IHS).
The study, Global Wind Turbine Markets and Strategies: 2011-2025, said investments will increase from $30 billion in 2010 to more than $68 billion in 2025. The trend corresponds with worldwide installed wind capacity increasing from 188 GW to more than 940 GW during the time period.
Investment levels will return to $34 billion by 2012, the same level as it was in 2008, the study said. A slow economic recovery in the U.S., plateau in European demand and continued pressure on prices globally are a few of the reasons investments will remain below the 2008 level in the short-term.
The report also said renewable electricity demand in the global market will continue in the long term, combined with more competition between Asian and European suppliers, technology shifts toward larger turbine procurement and buy-side consolidation.
“Industry restructuring is underway as a response to slumping demand, with positive long-term implications for the wind energy sector,” said Eduard Sala de Vedruna, Director of Global Wind Energy Advisory at IHS. “Wind turbine players face important strategic decisions now to diversify markets geographically, build a position in offshore wind, and optimize their manufacturing operations to address these demand shifts”.
IHS expects the amount of installed wind power capacity to jump 16 percent in 2011 compared to 2010. The increase in installed capacity will translate into a 14 percent increase in investment for the year, according to the study.
Average prices for turbine and tower remain below $910/kW in 2011, due to ongoing globalization of turbine manufacturing, increasing competition from Asian suppliers and an abrupt drop in demand that have created a challenging environment for manufacturers, the study says.
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