The outlook for the global wind power sector has fallen by 29GW in the fourth quarter of 2023, according to Wood Mackenzie.
The downgrade signifies a drop in cumulative installed capacity to 2.35TW by the end of 2032, it cited in figures in its “Global wind power market outlook update: Q4 2023”.
The report highlighted that the fourth quarter downgrade amounts to less than a 2% change in expected capacity quarter-on-quarter (Q-o-Q) and reflects developments in key markets such as the US and China.
“Long-term market fundamentals remain strong globally despite near-term challenges in project execution in China and offshore market maturation in the US,” said vice president of global renewables research at Wood Mackenzie Luke Lewandowski.
“Markets will evolve and the findings from the report reflect some of those nuances.”
The report stated that 82% of the global downgrade Q-o-Q come from the combined cuts in the Chinese and US markets.
A number of cancelled power purchase agreements in the US has contributed to a 10.9 GW downgrade in the global offshore outlook Q-o-Q from 2023 to 2032.
Beyond Orsted’s announcement to cease development of its Ocean Winds 1&2 projects, supply chain bottlenecks and permitting delays will push nearly 8GW of offshore wind projects in the US beyond the 2032 outlook.
This means that cumulative offshore capacity in the US by 2030 will reach roughly half the government’s 30GW target as a result.
A continued “wait and see” approach in the US caused by economic and policy uncertainty is resulting in a 2GW cut in the near term to the 10-year outlook for the US market.
“Continued economic and policy uncertainty, including pending guidance from the US Treasury, caused onshore and repowering development timelines to shift, prolonging the 2023 slowdown through 2024,” Lewandowski said.
A tightening of the permitting requirements in China has a 12GW cut to the forecast Q-o-Q.
This increased stringency in permitting is partnered by the cancellation of several projects that have been classified as idle and slow project execution rates to result in a 12GW downgrade, a 1.5% decrease Q-o-Q according to the report.
“The near-term outlook [for China] is expected to be sluggish and this is reflected in the outlook,” Lewandowski said.
“However, China’s onshore wind outlook from 2026 to 2032 remains unchanged Q-o-Q.”
The report added that the comparatively fast solar installation process allows state-owned asset owners to manage wind project construction delays as new solar capacity helps to make progress towards the annual renewable targets.