Global wind installs dip as China growth slows; Vestas forecasts stable margins

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Global wind installs drop 14% on slower growth in China

Global wind installations were 54.6 GW in 2016, some 14% lower than the record 63.6 GW installed in 2015, the Global Wind Energy Council (GWEC) said in its annual statistics report published February 10.

In China, the most active wind power market, annual wind installations fell from 30 GW in 2015 to 23 GW in 2016, driven by cuts to feed in tariffs, GWEC said.

"Also, Chinese electricity demand growth is slackening, and the grid is unable to handle the volume of new wind capacity additions; although we expect the market to pick up again in 2017," Steve Sawyer, GWEC Secretary General, said in a statement.

China still installed three times as much capacity as the U.S. in 2016 and represented 43% of global installations.

The U.S. installed 8.2 GW for a 15% share of new additions while Germany installed 5.4 GW to represent 10%.

Germany remained by far Europe's most important wind power market. France installed 1.6 GW in 2016, Netherlands installed 887 MW and UK 736 MW, GWEC said.

India and Brazil together represented around 10% of global installations.

Source: GWEC.

US wind overtakes hydro to become largest renewables source

U.S. wind power has overtaken hydroelectric to become the largest source of renewable energy capacity in the country, the American Wind Energy Association (AWEA) said February 9.

U.S. installed wind capacity rose 11% in 2016 to 82 GW and means wind is the fourth-largest source of power generation behind natural gas, coal and nuclear energy. Wind power now generates around 5.5% of U.S. electricity and in 13 states wind power represents over 10% of power generation.

                          Wind power share of total generation by US state

U.S. wind power capacity is forecasto to rise to 94 GW by the end of 2018, according to the U.S. Energy Information Administration's Short-Term Energy Outlook, published February 7.

Europe wind investments rise 5% on offshore surge

Investment in European wind energy rose by 5% in 2016 to 27.5 billion euros ($29.3 billion) as offshore wind investments surged 39% to 18.2 billion euros, WindEurope said February 9. Onshore investments fell 29% to 9.3 billion euros, it said.

Wind power projects accounted for 86% of Europe's new clean energy finance in 2016, up from 67% in 2015.

Wind power finance was dominated by the UK, where 12.3 billion euros (equivalent) was invested in wind projects to represent 46% of wind investments.

Europe's total installed wind capacity was 153.7 GW at the end of 2016. Wind power provided 10% of Europe's power last year.

             European clean energy investments in 2016 

                     

Source: WindEurope.

Vestas forecasts stable margins after annual sales rise 22%

Vestas posted 2016 sales up 22% year-on-year to 10.2 billion euros ($10.9 billion), mainly due to higher volumes, the wind turbine group said February 8. Gross operating profit [EBIT] rose 65% to 1.4 billion euros, driven by higher revenues, a “favourable product mix,” and improved average project margins, it said.

Revenue in 2017 is forecast in the range 9.25 billion-10.25 billion euros and the service business is expected to continue to grow with “stable” margins, Vestas said. EBIT margin in 2017 is forecast in the range 12%-14%, compared with 13.9% in 2016.

Wind turbine order intake rose from 8.9 GW in 2015 to 10.5 MW in 2016 and the value of the service order backlog increased by 1.8 billion euros to 10.7 billion euros.

Order intake in Q4 2016 hiked 70% on a year ago to 4.5 GW. The U.S., Australia, Germany, and France were the main order intake markets in Q4 2016, accounting for approximately 70%.

Average selling price of order intake was 0.95 euros per MW, up from 0.90 euros/MW in Q4 2015, driven by “larger share of EPC [Engineering-Procurement-Contractor], turbine mix, and FX,” Vestas said.

Price per MW can depend on a variety of factors such as wind turbine type, geography, scope, and uniqueness of offering.

Saudi Arabia to launch first wind power tender in April

Saudi Arabia plans to launch its first tender for 700 MW of wind and solar projects in April, energy minister Khalid Al-Falih, said February 1.

The first round will call for 400 MW of wind power capacity and 300 MW of solar, according to reports.

Saudi Arabia aims to build 3.5 GW new renewable energy capacity by 2020, rising to 9.5 GW by 2023. The government wants to attract up to $50 billion of investments in wind and solar projects by 2030.

Saudi Arabia is looking to lessen its domestic reliance on fossil fuels as it pursues its vision 2030 plan of diversified economic and social objectives. The kingdom currently burns 25% of its crude oil production, or 2.8 million barrels per day (bpd), for domestic energy needs, according to data from the King Abdullah University of Science and Technology.

South Africa to sign renewables PPAs: President 

South Africa will sign outstanding renewable energy power purchase agreements (PPAs) and will expand its Independent Power Producers Programme to include coal and gas-fired generation, President Jacob Zuma said in his State of the Nation Address February 9.

“Renewable energy forms an important part of our energy mix, which also includes electricity generation from gas, nuclear, solar, wind, hydro and coal,” Zuma said.

“Eskom will sign the outstanding power purchase agreements for renewable energy in line with the procured rounds,” he said.

South Africa’s Renewable Energy Independent Power Producer Procurement Program (REIPPPP) has thus far procured 102 projects, representing investments of some 194.1 billion rand ($14.7 billion) including 53.4 billion rand from foreign investors, according to the South African Renewable Energy Council (SAREC).

Since 2016, state utility Eskom has delayed the signing of a number of PPAs, holding back some 58 billion rand in investments, figures from SAREC show.

“Some of the serious economic effects of the recent pause in South Africa’s [REIPPPP] such as factory closures and job losses have caused serious hardship for this fledgling industry. We trust that there will now be rapid movement to resolve the impasse in line with the President’s directive”, Brenda Martin, SAREC chair, said in a statement.

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