Consultants at research firm MAKE expect the Americas region to add nearly 92 GW of new wind power capacity from 2013 to 2020, but the rate of growth will be significantly different between North America and Latin America. Despite macroeconomic headwinds in North America, enough demand exists to support average build over 6 GW/yr, but the market is crowded. The real opportunity over the next eight years will be in Latin America where MAKE forecasts a 20% compounded annual growth rate. For the first time, MAKE forecasts most of new wind capacity in the Americas occurring outside of the U.S. market.
Opportunities in Latin America abound as market potential has yet to be fully realized, and only recently have regulatory frameworks been executed to spur growth in renewable energy. Unlike in North America, the emerging economies of Latin America and associated macroeconomic conditions support higher electricity consumption that creates opportunities for wind power development. Several markets in the region are also subject to seasonal or unsecure power sources, or both which drives an interest in harnessing domestic energy sources such as wind power.
Growing pains caused by inadequate infrastructure, volatile political regimes and ineffective policies will influence a more sporadic growth trajectory than in more mature markets, but general demand is undeniable. Brazil highlights the region, becoming the second largest market for new growth in the Americas with nearly 14 GW of wind capacity forecast to be installed through 2020.
The U.S. wind market is in the midst of what MAKE believes to be the last PTC cycle. Given the expected stipulations of the program, MAKE predicts that installation numbers in the U.S. will rebound in 2014. A similar near-term growth is foreseen in Brazil on account of new capacity born from the 2009 to 2011 national power auctions and the delayed grid connection of 2012 to 2013 installations in 2014. Together, the U.S. and Brazil markets will account for over 26 GW of installations 2013 to 2016, with a bubble year expected in 2014.
Policy fulfilment, surplus power, and competition from inexpensive gas and hydroelectricity will impact demand for wind power in North America over the next eight years. Short-term policy support in the U.S., Ontario and Québec will support growth 2013-2016. In the longer term, the industry will leverage a decreasing LCOE for onshore wind, increasing gas prices, and opportunity born from coal retirements in the US and Canada markets to sustain growth.
MAKE’s inaugural Americas Wind Power Outlook Report is designed to more fully examine the region and to account for the different dynamics that drive growth and create opportunity for the wind power industry. The Americas Wind Power Market Outlook is a 100-page report that provides in-depth analysis and 2013-2020 forecasts of countries in the region.
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