Global wind power capacity was likely to more than double to a projected 33 500 MW by 2011, placing suppliers under more stress to iron out supply constraints, a report by financial management and advisory company Merrill Lynch said. The company predicted that growth would be underpinned by strong demand in the US and Asian markets.
Europe was still the largest wind energy market, accounting for 65% of total capacity, with Germany and Spain taking up most of the installed capacity. The US was the next largest market, but Merrill Lynch predicted that the Asian markets, in particular India and China, were expected to accelerate the use of wind energy.
Merrill Lynch said that it the market for new installations had grown by 42% in 2005, 30% in 2006, and that it was expecting growth of 25% in 2007. New power plants in the post 2010 time period would “inevitably” be wind farms, as the expectation of high carbon prices, coupled with high oil prices, were disincentivising power companies from building fossil fuel fired plants.
Wind power was also far more suitable for large scale roll-out of renewable energy capacity, Merrill Lynch stated. The world’s largest solar power plant was a 40 MW project, comprising a million solar panels, while the largest wind plant was almost 20 times the size at 780 MW.
The growth in the global wind energy market would put “tremendous pressure” on a stretched component supply chain, which the report noted was already at full capacity. The main bottlenecks had been found in large bearings and gearboxes. “Most turbine manufacturers appear to have secured component supply for their 2007 needs and the build out of new capacity in gearboxes and bearings has begun but equilibrium is unlikely to be reached before the end of the decade,” Merrill Lynch said.
It added that the move to larger turbines had aggravated this trend, as there was greater availability of component supply for smaller turbines than the 1.5 MW to the 2,5 MW, or mainstream, class. But, despite the market growing at double-digits, there had been very few new entrants, Merrill Lynch said. “We see little risk of new entrants as the absence of proven technology and, importantly, an operating track record represents a key barrier to entry,” it stated.
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