Chinese companies were responsible for almost two-thirds of the total wind power capacity added in 2017, according to a new report from Wood Mackenzie Power & Renewables.
The report – ‘Global Wind Power Asset Ownership 2018’ – found that 63% of capacity additions last year were made by 11 Chinese companies.
At the top of the pile was CHN Energy, formed by the merger of power producer Guodian Group and mining and energy company Shenhua.
CHN Energy’s wind portfolio is almost twice as large as the second-ranked company Iberdrola, said Wood Mackenzie Power & Renewables.
Wood Mackenzie Power & Renewables Asia-Pacific analyst Xiaoyang Li said: “Many turbines installed during recent years of breakneck growth in China’s wind sector are reaching the end of their turbine manufacturer warranty period.
“This coming transition, coupled with the low prices seen at new wind energy tenders, is forcing large asset owners to prioritise availability and annual energy production, driving a significant focus on operations and maintenance.”
She added that Chinese asset owners are now looking beyond the home market to build and buy projects overseas.
“Australia has been a particularly attractive overseas market, thanks to its open market and high project profits,” Li said.
Offshore wind is dominated by four large utilities that develop and then sell off about 50% of the projects to a “more fragmented pool of institutional investors”, the report said.
The growing offshore wind market will affect asset ownership in Asia Pacific from 2022 onwards, boosting the utility market share in Japan and South Korea, it added.
In North America, Canadian and European companies developed “significant new capacity”, while many US owners completed just 20% of their collective average 2015-2016 installation volume, said Wood Mackenzie North America wind research analyst Anthony Logan.
NextEra, BHE, Invenergy and Duke and several other domestic asset owners “used the year to allow their development arms to rebuild exhausted project pipelines”, he said.
Wood Mackenzie added that in Latin America, competitive auction dynamics in 2017 and 2018 indicate that global independent power producers (IPPs) with utility subsidiaries will have an increasing market share in the region.
Europe saw a record year for wind power additions in 2017 driven by the expiry of subsidies in the northern and western regions, it said.
In the UK ownership was dominated by utilities, while community ownership in Germany peaked, the report said.
“Across Europe in the first half of 2018, utilities and large IPPs drove consolidation to secure a project pipeline that will ensure their positioning in an increasingly competitive market,” Wood Mackenzie said.
Outside of China in Asia-Pacific, wind farm owners were mainly focussed on domestic markets.
The report also looked ahead and predicts that the phasing out of subsidies in the US and Canada will lead to a market decline in the early 2020s.
This will “significantly destabilise the traditional model of independent power producers”, and allow utilities with “ambitious rate-basing plans” and institutional investors to gain market share, it said.
Competitive auctions in Europe and the Middle East will lead to large IPPs and utilities owning more capacity, because they are “better able to leverage cost over smaller outfits”.
China will see an increase in ownership share by the turbine manufacturer segment due to the gradual erosion of the IPP sector, the report added.