Global Wind Power Outlook Falls 29 GW in Q4 2023: Wood Mackenzie
Reductions in Chinese and U.S. markets led to 82% of global decline
The worldwide wind power industry forecast has declined by 29 GW in Q4 2023, indicating that the cumulative installed capacity would fall to 2.35 TW by the end of 2032, according to a report by Wood Mackenzie.
The ongoing policy and economic uncertainty in the U.S. and China’s increased restriction on permits and cancellation of projects has led to the combined reductions in these markets, accounting for 82% of the global quarter-over-quarter (QoQ) decline.
The worldwide offshore forecast from 2023 to 2032 was downgraded by 10.9 GW due to several power purchase agreements that were canceled in the U.S., according to Wood Mackenzie’s ‘Global Wind Power Market Outlook Update: Q4 2023.’
Beyond Orsted’s announcement that it will no longer be developing its Ocean Winds 1&2 projects, delays in the permitting process and supply chain obstructions will push almost 8 GW of offshore wind projects in the U.S. to be completed after 2032. This implies that the U.S.’s total offshore capacity by 2030 will be around half of the 30 GW goal set by the government.
Policy and economic uncertainty and pending guidance from the U.S. treasury is behind the timeline shifts on onshore and repowering development, the report said.
China, too, is facing its own constraints, including the combination of tightened permitting requirements and cancellation of projects classified as inactive, leading to a 12 GW downgrade or a 1.5% QoQ drop.
As per the report, the near-term outlook for China is slow, but at the same time, onshore wind from the year 2026 to 2032 will remain unchanged QoQ.
“Long-term market fundamentals remain strong globally despite near-term challenges in project execution in China and offshore market maturation in the U.S. markets will evolve, and the findings from the report reflect some of those nuances,” said Luke Lewandowski, Vice President of Global Renewables Research at Wood Mackenzie.
As per another Wood Mackenzie report, China is expected to install a record-breaking 230 GW of wind and solar capacity in 2023, which is more than twice as many installations as in the U.S. and Europe.
According to the report by Bloomberg NEF, a number of obstacles are affecting the U.S. offshore wind business, including growing prices, delayed permits, and difficulties connecting to the grid, all of which have reduced profits for developers.