Policymakers must act now to avoid supply chain challenges stalling record years of new wind energy capacity – EQ Mag
An enormous 680 GW of new capacity is forecast to be installed by 2027
Sao Paulo : The wind industry can expect record installations in both onshore and offshore markets by 2025 with 680 GW of new capacity expected by 2027. Policymakers need to act now to avoid a supply chain bottleneck stalling the deployment of wind energy from 2026. Those supply chain challenges could imperil hopes of the world reaching key 2030 climate targets – a key stop on the journey to net zero by 2050.
After a disappointing year in 2022, a fast evolving policy environment has set the scene for a period of accelerated deployment over the coming years, with the industry set to install 136 GW per year, reaching a compound growth rate of 15pc.
As the Global Wind Report demonstrates, there is an urgent need to ramp up investment in the supply chain all around the world. GWEC’s mapping shows that both the US and Europe are likely to see supply bottlenecks for turbines and components from as soon as 2025, as the wind market sees the positive impact of the US Inflation Reduction Act, increased ambition in Europe, continued rapid build out in China and large developing countries speeding up their deployment.
Decisions made by policy makers will have a decisive impact on whether the world will be able to carry out the energy transition within the necessary time frame, and the cost of the transition. While moves to further incentivise investment in supply chains and create more regional diversification and resilience are to be welcomed, attempts to create rigid local content requirements or implement protectionist trade measures create the risks of sharply higher costs or even serious delays to the necessary expansion of wind and renewables.
Ben Backwell, Global Wind Energy Council CEO, said: “The message for policymakers from this year’s Global Wind Report is clear: it is time to double down on your ambition and deliver the support that will secure the clean energy future dawning in front of us.
“New policies focused on accelerating the deployment of secure, renewable energy are being introduced across the world, and GWEC expects a sustained surge in growth over the coming decade and beyond. But in order to ensure implementation policymakers need to act decisively to fix market and regulatory barriers to allow investment to flow into new factories to avoid future bottlenecks. In addition, we need much more active global collaboration to enhance and de-risk the supply of critical raw materials in order to ensure that the green economic revolution had the inputs it needs in this crucial period.
“The theory has long been proven: backing wind energy creates jobs, builds new industry and delivers clean & secure energy while ensuring climate goals are met and net zero is achieved. Policymakers must embrace the opportunity in front of them and work with industry to secure the energy transition.”
Francesco La Camera, Director-General of the International Renewable Energy Agency (IRENA) said: “Today, renewables are still the energy choice for new power generation, despite the effects of recent global crises and geopolitical shocks on the energy sector. IRENA’s latest data confirm 2022 has seen the largest increase in renewable energy capacity to date. The world increased the stock of renewable power by 9.6% and contributed an unprecedented 83% of global power additions. Wind energy remains one of the fastest growing generation sources. But the latest IPCC message is clear, we are not moving fast enough. One of the most realistic options to limit the global temperature increase is a massive scale-up of renewable energy solutions. If we are to stay on the 1.5C pathway, renewable power must triple by mid-century.”
Keisuke Sadamori, the IEA’s Director of Energy Markets and Security, said: “The global energy crisis has super-charged growth in renewables as countries around the world recognise the energy security benefits these technologies deliver alongside their emissions-reducing credentials. Renewables empower nations to diversify supply and reduce reliance on imports while addressing climate change.”
“Onshore and offshore wind have been stalwarts of the clean energy transition so far, but the IEA’s analysis shows there is still much work to do. By the end of this decade, global installations of wind power need to increase four-fold to be in line with a pathway to net zero emissions by 2050. This requires a rapid expansion in investment and strong actions by governments to reduce permitting delays and other red tape while building resilient supply chains.”
Morten Dyrholm, Chairman, GWEC, said: “The recent IPCC Synthesis Report makes it crystal clear: we need to scale renewable energy up now. But scaling up wind energy requires healthy industries and healthy industries require thriving markets.
“This year, 2023, will be a crucial year to turn prospects into permits, to future-proof auctioning and market design, to speed up infrastructure build-out as well as flexibility solutions on supply and demand side. As this report sets out, there are challenges on the horizon that require bold policy action and strong support for the industry from governments. GWEC and the industry stand ready to work with policymakers around the world to ensure we can rapidly scale up the deployment of wind energy around the world.
Elbia Gannoum, Chief Executive Officer at ABEEólica – Associação Brasileira de Energia Eólica e Novas Tecnologias – Vice Chair of Board at GWEC, said: “Although Brazil and Latin America have a great potential when it comes to renewable energy, we realise that it is not enough to simply have the hope for competitive resources if there is no strong signal from public policy to attract the investors who can turn potential into reality.
“We run the risk of missing opportunities to deliver the energy transition for Brazil. Even though we already have a structured chain for onshore, for offshore and clean hydrogen to deliver for Brazil, policymakers need to present a strong industrialization energy plan, similar to those now being seen in the United States and Europe.”
“The Brazilian wind sector, which plays an important role for all of Latin America, has a huge potential in generation capacity. That potential has only grown with the arrival of offshore wind and clean hydrogen. But in the short term, we must work internationally to address escalating prices and introduce public policies that avoid the bottlenecks and supply chain challenges that would impact globally, and therefore impact on Brazil. These are important issues that require action in 2023 if the sector is to be able to deliver on this energy potential and achieve the net zero goals to mitigate the effects of climate change”.
Bryan O’Neil, Director, Global Offshore and Power Generation at report sponsor Lincoln Electric, said “This year’s theme of “The Coming Acceleration” accurately describes what is required to support one of the most rapid industrializations of energy supply chain and technology ever needed since the 1900’s. Simply said, the collective global wind energy segment has an immense challenge and opportunity ahead to make the 2035 and 2050 targets…. past and future commitments to manufacturing will enable this industrialization.”
Source: gwec
