The wind industry is struggling to survive despite the shortage of components because of the excessive growth of the industry. This is similar to the shortage faced by the PV industry for the last couple of years. There are simply not enough materials or manufacturing capacity to keep up with the increasing demand for wind turbines. The need for steel, copper, concrete and other materials has driven up project costs, restricted turbine supplies and created a difficult market for smaller wind developers.
But despite a two-and-a-half year stretch of materials shortages and rising costs, the global wind industry is experiencing steady growth worldwide and increased acceptance by utilities, governments and citizens.
Much of that new demand was caused by the two-year extension of the production tax credit (PTC) in the U.S., which provided certainty for wind developers and encouraged a slew of new projects. In addition, China and India emerged as major players in the wind market, further straining supply of materials.
As the global market expanded rapidly starting at the end of 2004, the manufacturing capacity was not in place to handle demand. Since 2005, manufacturers have been playing catch-up and pumping out turbines as quickly as developers can put them into the ground. However, because it takes about 20 months to ramp up manufacturing capabilities, the cost increase and turbine shortage is not expected to level out until sometime in 2009, it is predicted.
The long-term economics of wind energy are still very attractive to utilities and their customers. While the price of fossil energies continues to rise, the cost of wind will always stay the same—free.
According to the Global Wind Energy Council (GWEC), the global wind industry will grow at an average rate of 19% over the next three years.
As the wind industry sorts itself out and deals with higher project costs, analysts are anticipating continued, steady growth all over the world. According to GWEC, the U.S. could overtake Germany in cumulative installed wind capacity by 2010. China and India will also represent a major force in Asian wind development, leading an expected average annual growth rate of 28% on the continent.
Overall, the industry is on track to reach almost 150 gigawatts of installed capacity in the next three years, which is more than double the cumulative installed amount in 2006.