Ten predictions for the wind industry in 2019

It’s our first edition back - hooray! - and that means it’s time for us to make ten predictions about the trends and stories we expect to shape wind in the next 12 months. We’ll re-visit these in our final edition of 2019 to see how many we got right.

1) The cyberwar escalates: Renewable energy has always been a fertile area for Russian trolls, and most recently talking up US wind and solar in order to hinder shale gas. However, we don’t expect the cyberwar to remain this benign. The emergence of right-wing populist leaders will keep emboldening the critics of renewables and we expect attacks to grow more vicious. We’d also expect more firms to beef up their cybersecurity to prevent direct attacks.

2) US trade wars hit wind: Draft-dodging President Trump avoided Vietnam, but he’s shown more appetite for trade wars – and that will carry on as long as his presidency does.

We expect the US wind industry to remain strong in 2019 before the expiry of the production tax credits, but Trump's trade wars will start having an effect on the sector. Potential impacts include pushing up the cost of imported materials; reducing appetite from Chinese firms in US cleantech; and making it tougher for overseas turbine makers to enter the US.

3) Brexit’s moment of truth: What a gloomy list! Okay, we’ve been wrong on Brexit before, but we’re now at the moment of truth following the UK’s decision to pull out of the European Union. Whatever form Brexit takes – if it happens – we don’t expect much to change for the wind industry, although life will get tougher for exporters and those using overseas labour.

That said, UK leaders are continuing to back offshore wind and give little support to onshore wind, despite widespread public support, and it appears that only a change of government will change that. In Europe, the market will be driven by national governments.

4) More utilities cave to green tariff pressure: Public pressure about climate change is growing stronger and we would expect to see far more people putting pressure on utilities around the world to offer renewables-only energy tariffs for domestic and business customers. In the UK, Scottish Power became the first big utility to move to providing 100% renewable energy in October. While we can’t tell who’ll be next to do so, we expect to see more utilities taking up the battle with green tariffs.

5) Fresh manufacturer M&A deals: It was a quiet 2018 for mergers and buyouts by big wind turbine makers, with nothing to follow a series of huge deals from 2015 to 2017: Siemens-Gamesa, GE-LM, Nordex-Acciona, and so on.

In 2019, we expect to see more acquisitions by manufacturers of niche players in software and storage as wind-and-storage projects come more into favour. And we wouldn’t rule out a high-profile tie-up between two major manufacturers as German firms struggle at home and Asian players look to grow internationally.

6) More momentum for green bonds: It’s been a few years since we wrote about green bonds, other than news stories about bond issues. Why? Well first, because of the ongoing debate of how ‘green’ the products funded with these vehicles actually are; and second, because green bonds aren’t all that interesting. Sorry.

However, with the volume of green bonds reaching an estimated $210bn last year, which is five times the level back in 2015, we expect to see more firms in the wind industry taking advantage; and more green bond funds flowing to wind.

7) More corporate PPAs offshore: It’s too boring to say we expect to see more corporate power purchase agreements in Europe and North America this year, as the momentum is picking up. Still, let’s stick our neck out a bit more and say we expect to see more corporate PPAs offshore, after pioneering deals including at Vattenfall’s 600MW Kriegers Flak project in July. This will show that energy buyers have as much confidence offshore as the sector does.

8) Uncertainty in Taiwan: Until November 2018, Taiwan looked nailed on to stay the world’s most attractive emerging market for offshore wind investors. But the emergence of the anti-wind Kuomintang party at local elections in November, and changes to 2019 feed-in tariffs, have increased the risks in a market where firms were already grappling with risks including typhoons. We will see continued uncertainty in the run-up to the 2020 general election.

[Note: We wrote this before this week's Ørsted news, honest!]

9) Storage gets serious: If you didn’t notice, we gained a sister in 2018 – or Energy Storage Report to use her full name. While there is still a furious battle between competing systems in this sector, we expect to see a couple of trends in 2019.

First, growth in the number of utility-scale projects announced in countries around the world as the trend takes hold; and second, growing interest from wind and solar companies in long-duration systems. We've been too bullish on storage before, but this time feels different.

10) Diversity up the agenda: English footballer Raheem Sterling’s comments on racism in sports journalism has rightly ruffled feathers among journalists, and we expect businesses in more parts of the economy – including the media – to make this a bigger priority this year.

For renewables firms, this will mean more scrutiny of racial and gender diversity at all levels, and what plans and policies they have in place to fix perceived imbalances. The industry may not look much different at the end of 2019 than it does now, but we expect to see more firms publicly engaging with these issues and setting out their long-term plans.

So there you go. Those are some wide-ranging predictions for the trends and issues that we expect to shape the global wind industry, and companies within it, in 2019. We'll look back at these and give ourselves a mark out of ten in the final edition of the year.

Here's to a prosperous 12 months.