Despite demand fluctuations and the impact of the coronavirus, some $600bn is foreseen being spent on wind turbines and componentry in the ten years through 2028, pointing to an increase of 8% compared to 2019 levels, according to latest figures from analysts Wood Mackenzie.
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 analyst group 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 said.
“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 after this year will spur demand for some 5,000 wind towers in 2020, the analyst added. That will compel OEMs to increase tower imports into the US despite anti-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,” he added.