The outlook for wind power generation looks positive despite cost inflation that has weighed on the sector in recent years, analysts Wood Mackenzie said on Thursday.
Winning tender bids have shown a declining trend in key European markets amid rising volumes and stronger competition, Wood Mackenzie's commentary said, putting pressure on suppliers to keep costs down to maintain margins and R&D investment, while remaining competitive in tenders.
Reductions in turbine costs are likely this year and for the first time since 2020, Wood Mackenzie said.
The overhauling of wind tender frameworks look set to restore investor confidence that was absent during failed 2024-25 tenders, with new designs to focus on contracts for difference or CfDs that move more risk from developers to governments over periods of 20 years or more.
Tender activity looks intense for the 18 months ahead, testing the impact of those reforms.
In China specifically, the government's Plan for Building a New Energy System sets out a goal of 50% wind and solar within the power energy mix by 2030, prompting a boom in offshore wind while offshore faces challenges, Wood Mackenzie said.
Elsewhere, a backlog of repowering work is building up, with ageing and obsolete turbines awaiting replacement, but the high cost of such work has weakened the case for updating this equipment. It is accelerating however and raising average fleet efficiency as a result, Wood Mackenzie said.