Trade disputes with the U.S. will do little damage to China’s domination of the global wind-tower market, a report by business intelligence company GlobalData says. Recently, the U.S. Department of Commerce placed tariffs on imports of wind towers from China following accusations that the Chinese government subsidized domestic manufacturers to flood the U.S. market.
The tariffs range from 13.74 to 26% depending on the company. Although the decision is preliminary (a final order is expected in October), if enforced it will damage the Chinese wind tower export industry by increasing prices and reducing demand in its largest market.
However, according to GlobalData’s latest report, the affect on China’s overall wind-tower industry will be relatively minor because of the small percentage maintained by the export sector.
China exported 2.4 GW and 2.6 GW of towers in 2010 and 2011, but these numbers are dwarfed by the 18 GW of towers installed at home. In 2011, China installed 12,766 towers, accounting for 53% of the global market. To put this figure in perspective, the second largest market shareholder was the U.S., with 3,782 installations. Due to lower production costs, favorable government subsidies, and the sheer scale of manufacturing in the country, China is both the world’s largest producer and consumer of wind towers.
2011 was a good year for the global wind energy market, following a dip the previous year. From a value of 74,192 MW in 2006, the installed capacity grew at a Compound Annual Growth Rate of 26.3% to reach 238,351 MW in 2011. This is expected to grow further still to 427,338 MW by 2015.
The financial crisis substantially hindered the increase of wind power capacity in 2009 and 2010, but the revival of suspended projects in 2011 witnessed a steep rise which is expected to continue through 2012. Financial incentives such as feed-in tariffs and capital support programs including tax credits and loan guarantee programs, along with mandates such as renewable portfolio standards, will continue to drive the wind power market.
Against this backdrop, GlobalData expects wind energy capacity to increase by 2020, and in turn drive drive demand for wind towers in the future.
Filed Under: Policy, Towers