The trend towards clean, affordable and reliable power remains one of the key drivers behind the growth in renewable energy. Unlike solar energy, wind power has a huge CapEx. So, to encourage private investors, governments around the world have been providing subsidies and incentives. The strict environmental regulations also supported the market, particularly in matured markets in Europe and North America. So far, these initiatives substantially helped the wind power industry.
The proportion of wind power in the total power market doubled from 2% in 2011 to 4% in 2017, and we expect that the ratio will further increase over the next ten years. A number of projects have been in different stages and new projects to be added over the coming years. Both CapEx and OpEx in the wind energy market to fall over the next ten years, which is likely to attract investment.
One of the major competitors of the wind power is the solar energy which would affect the market in the coming years. Although the proportion of solar energy in electricity production is three times smaller than wind energy, but the increase in efficiency of solar panel and relatively decrease in its prices will affect the wind power market.
We expect that growth in capacity additions will decelerate, likely due to maturity in the industry. The wind market has been transiting from a subsidy-based industry towards an open competitive based market, which may affect some countries. The slowdown in growth belies falling costs, though it also emerges as an open market-based industry despite culmination of subsidies. The wind power is now competing in competitive auctions, where in some countries auctions reached to as low as $20/MWh.
This article is based on our recently publish report “The Global Wind Energy Market Outlook 2018-2028”.
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