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From the Editor

Is the renewable energy sector finally heading for a downturn after years of unprecedented growth? It would of course be quite wrong to call time on an industry that is by any standard a major force in the global power generation sector and has enjoyed robust expansion year-on-year for perhaps a decade or more. But it would also be unrealistic to expect such growth to continue indefinitely. And it cannot be denied that a number of indicators have emerged in recent weeks which suggest that , for example, the European wind sector is facing a period of demand volatility and oversupply.

Vestas – whose latest financial results we cover in a new section in this issue – says that while at the beginning of 2010, it resolved to retain substantial excess capacity in Europe in expectation of an increased demand in 2010 and 2011, it now believes that in 2011 European market growth will not live up to expectations. As a result, the company says, it has been compelled to adjust its capacity in Europe, closing down of a number of factories, primarily in Denmark where costs are highest. In total, around 3000 jobs will be lost.

There is also evidence that the impact of a slowing market is being felt further up the supply chain. For instance, gearbox manufacturer Hansen Transmissions International NV recently announced that it will focus its future business strategy on wind energy. However, as part of a restructuring move it will reduce its current wind turbine gearbox manufacturing capacity by 1100 MW from a total capacity of 8700 MW. This reduction will help reduce the level of over-capacity and is 'reflective of the continued volatility and uncertainty in the global wind energy market,' the company said in a statement.

It may be that alongside the worst global economic recession in decades, the traditional markets for renewable energy technology are set for a downturn as the best sites are exploited, saturation levels are reached and the glory days which followed the introduction of feed-in tariffs are long gone. If anything, European governments are expected to cut tariff rates in a bid to balance the books.

However, while these traditionally strong markets may not be expected to grow as vigorously as in previous years there is perhaps cause for optimism in the sector, with the growing strength of emerging markets.

Indeed, according to the World Wind Energy Association (WWEA) president, Dr. Anil Kane: 'The Asian markets and especially China with its impressive growth continue to be the main drivers of the world wind energy markets. Companies in the Asian countries are now about to start exporting wind turbines and equipment on a larger scale. Such new manufacturing capacities will further speed up the wind energy deployment worldwide, mainly for new markets in the developing world.'

This is a key observation and in this edition we look at several sectors that are expected to witness significant growth, albeit starting from a platform of relative underdevelopment.

This month we also consider wind development in the Balkan states and review the prospects for the future. We also have an in-depth profile of the renewable energy sector in Australia, where we consider recent policy developments and the growing impact of carbon markets. In addition, we include a number of articles looking at renewable energy development in Africa.

Given the evidence presented here, it seems that the traditionally strongest renewable energy markets of the US and Europe may be a long way from the boom times of a year or two ago. But that said, as a global industry developing markets mean that it is certainly far from bust.

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03/01/2015
Volume 18, Issue 3
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