According to an expert at GlobalData, the wind turbine market is currently suffering from manufacturing overcapacity, falling subsidies, and general uncertainty about the long-term future of wind energy.
Presented as evidence, the world’s largest wind turbine manufacturer has predicted far weaker sales this year and is revising shipment forecasts.
GlobalData’s Senior Energy Consultant Jennifer Santos says the key to survival is for the sector to take significant cost cutting measures. For instance, last year Vestas implemented cost cutting measures including rationalizing its manufacturing base and reducing headcount. These changes have paid off and and the company had a positive cash flow in the fourth quarter of 2012.
The most dominant forces in the wind turbine production business, China and the United States, currently account for 60% of the global wind turbine market. Sadly, each country’s potential for significant turbine manufacturing is looking grim.
Santos does believe wind turbine prices have bottomed out, at least for the top manufacturers. A number of wind turbine manufacturers are developing new products which are arguably higher priced per MW than conventional wind turbines.
If turbine manufacturers are able to lower their costs in 2013, profitability may be possible and prices at and prices may be sustainable.