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Annual revenue for global Wind Turbine Supply Chain Predicted to Hit $600bn

 

Wind Turbine

 

The global wind turbine supply chain is expected to generate up to $600 billion per annum between 2020 and 2028, according to a new study released by Wood Mackenzie.

 

Despite the COVID-19 pandemic which is pressing near-term hurdles for the wind energy industry, the market is expected to record 8% growth during the forecast period compared to 2019.

 

The study states that US PTC phaseout post-2020 will spur demand for nearly 5000 wind towers in 2020, compelling turbine OEMs to increase tower imports into the US despite anti-dumping duties.

 

The more than 44 GW of combined peak wind demand in the US and China in 2020 is expected to strain the wind turbine supply.

 

Wood Mackenzie says higher average turbine prices and a 20% growth in offshore demand reflect a 37% uptick in supply chain potential, representing a cumulative value of $222 billion by 2028. Strategic capital components, such as blades and towers, present a $25 billion cumulative opportunity by themselves.

 

Shashi Barla, a principal analyst with Wood Mackenzie, said: “A rush in installation activity has caused a shortage of blades and bearings. The coronavirus has jeopardized approximately 10-15% of production volumes in China, Spain and Italy. However, Chinese companies resumed production in early March, resulting in a downgrade of only 3 GW for 2020 installations.

 

“Just over $6 billion worth of turbines and component supply production is already jeopardized in Q1 2020. The coronavirus impact could worsen this if facilities continue to face delays in resuming production.

 

“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.”

 

Barla added that 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”.

 

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

 

Source:  https://www.renewableenergyworld.com/2020/04/14/annual-revenue-for-global-wind-turbine-supply-chain-predicted-to-hit-600bn/