European onshore wind outlook

Onshore wind has been a major renewable energy source globally with one-third of the capacity installed in Europe by YE2015. The last 5 years, 2010 – 2015, saw a growth of 49 GW of onshore wind capacity in Europe and will see another 57 GW being installed until 2020. Changing market dynamics driven by 3 major trends will bring a 180-degree change in the way this capacity will be installed in the next 5 years.

These major trends are shift of policy framework from government-regulated incentives to market-based incentives, shift of new capacity installations from traditional markets to new and emerging installation markets and shift of new installations from high-wind resource sites to moderate/low-wind sites due to limited availability of high-wind sites in Europe.

These trends lead to the division of European onshore wind market into 4 segments, Emerging markets – Countries having government support through old FiT scheme and a strong growth potential with availability of medium/high wind sites, Stable and Growing markets – Countries with already implemented market based schemes and strong targets but with suitable site limitations, Declining markets – Countries with non-supportive government and exhausted suitable sites, and In-transition market – Countries with achieved targets and a lack of visibility for future incentives.

According to the report, 3 major owner segments exist in the onshore wind market based on their intent to be in the onshore business, namely Build to sell (electricity), Build to consume and sell and Build to transfer. The Build to sell(electricity) segment has the largest share in Europe and is expected to retain similar share going forward. The Build to sell and consume and Build to transfer are relatively smaller segments which have the pressure to maintain their market share and are at high risk of inability of competing in the new market dynamics. This leads to evolving needs of these owner segments in each market, driven by the changing trends mentioned above.

The Report highlights the impact of the changing market landscape on the owner segment to map the high-level needs of each owner segment in each market segment. It also links these needs to the capabilities of the WTG OEMs, which is expected to lead to the emergence of 4 archetypes of WTG suppliers in the European onshore wind market.