FTI Intelligence released its Global Wind Market Update – H2 2015 Briefing, which highlights updates in the wind market forecasts and key developments since the Global Wind Market Update – Demand & Supply 2014 was published back in March 2015. The briefing includes a detailed five-year market demand forecast for both onshore and offshore for nearly 50 countries for 2015-2019, a five-year market projection by region for 2020-2024, order flow summary and key M&A highlights in the first three quarters. We wanted to share some of the key takeaways as 2015 is looking to be the second consecutive record year for the global wind market with Vestas leading the wind turbine order flow.
- New installations globally in 2015 are expected to reach 59GW, compared to the 52GW installed in 2014. Total installations for the 2015-2019 period are now expected to reach 264GW – an increase of 5.6 percent from FTI Intelligence’s first quarter 2015 forecast. Total installations for the 2015-2024 period are expected to reach 592GW corresponding to a 3.3 percent compound annual growth rate between 2014 and 2024.
- The new installation forecasts in 2015-2019 were upgraded by 12.4 percent for North America. The key drivers are the expected strong growth in Canada in 2016 and the optimism created by the political debate about the revised U.S. federal Clean Power Plan. FTI Intelligence has increased its Asia Pacific forecast for total installations by 2019 by 5.6 percent as it expects strong continued growth in China due to a clear visibility of project pipelines in 2016.
- FTI Intelligence estimates firm order intake for the top 10 wind turbine OEMs in the first half of 2015 was approximately 20GW. Danish-owned manufacturer Vestas leads the intake, driven by near record orders of 3GW in the second quarter of 2015. Chinese companies Goldwind and United Power take second and third place, respectively, by taking the advantage of strong market growth in their home market. Germany’s Siemens, the second largest wind turbine manufacturer in 2014, saw a relatively low order intake due to a lull in offshore orders in both the first and second quarters of 2015.
- Confirmed offshore orders for the first half of 2015 totaled 1,203MW, led by Senvion (443MW) followed by MHI-Vestas (423MW) and Siemens (337MW).
In terms of M&A activity, the Global Wind Market Update – H2 2015 Briefing highlights the acceleration in M&A and consolidation activity in the wind sector, with a large number of deals announced or finalized.
- On the OEM-side, the highlights were the recent acquisition of Acciona Windpower by Nordex, regulatory approvals of the GE-Alstom acquisition and the merger of Chinese turbine manufacturers CSR and CNR, respectively. These deals followed the acquisition of Senvion by Centerbridge Partners earlier this year.
- There were also a number of deals involving component manufacturers, such as Ming Yang’s acquisition of China Smart’s RENergy, one of its top electric components suppliers, ZF’s acquisition plan to take over Bosch Rexroth’s industrial gears and wind turbine gearbox business and most recently GE’s acquisition of modular blade producer Blade Dynamics.
- On the demand side, onshore M&A continues to be driven by strong appetite for assets of yieldcos, including deals such as the acquisition of projects from Atlantic Power and Invenergy in the US by SunEdison controlled TerraForm Power and the acquisition of projects and equity in Brazilian developer Renova by TerraForm Global. The market also saw GE buying a 49 percent stake in Enel Green Power’s 760MW portfolio of operating and under-construction renewables assets in North America. We expect that yieldco-driven demand may start to scale back though.