What did we get right in our 2018 predictions?

In our first Wind Watch analysis piece of 2018, we shared ten predictions about what we expected to happen in the wind industry over the last year – and we promised we would check back. So did it look like we had Crystal Balls or were we talking balls?

Let’s look back and then give ourselves a score out of ten.

1) Europe seeks to regain initiative: Europe has slipped behind North America and Asia in terms of wind installations, and we said we thought the European Union would commit to a tougher target to regain the initiative. Well, in July, the EU committed that renewables should account for 35% of Europe’s energy mix by 2030, up from a previous target of 27%, and more supportive policies for wind and solar. So we’ll claim a point for being right on that – but with a caveat that wind is still being hit by political uncertainty in Germany, the UK and France. 1

2) US faces tougher year: Despite President Trump’s hostility to wind, the industry has found him relatively benign in 2017. We said we expected businesses to find things tougher going in 2018 as a result of punitive policies, but they haven't arrived. So, in the end, our worst fears weren’t realised and we can’t claim the point. Trump has been pro-coal and kept attacking wind – but hasn’t backed this up with damaging policies. As his tweets would say: FAIL! 0

How it might look if we got the Trump treatment... (Source: FakeTrumpTweet.com)

3) Auctions weigh on manufacturers: Competitive tenders have been taking a toll on the financial performance of wind turbine manufacturers, and we said there would be more restructurings and redundancies in 2018. It gives us no pleasure to say that has been the case, with Vestas, Siemens Gamesa, GE and the other big names all doing their best to ride out the tough market. Here's to a more positive 2019. 1

4) Contracts for Difference get sexy: CfDs get sexy?! There must have been Christmas booze flowing when we wrote that headline, but our point still stands. We expected to see more wind firms calling for CfDs as a way to help them stabilise their revenues and give them certainty on pricing. Undoubtedly, we have seen companies calling for the use of CfDs, not least for UK onshore wind, but the clamour hasn’t been deafening. Half a point. 0.5

5) Germany and India face tender fallout: The launch of competitive tenders in Germany and India in 2017 caused problems for companies in both countries as prices plummeted, and 2018 offered little respite. The political crisis around Chancellor Angela Merkel has plunged German onshore wind into a deeper slump, with its most recent auctions undersubscribed, while India’s latest auctions have also failed to attract enough bids. The fallout continues. 1

6) Wind support for Scotland and Wales: We said UK leaders would make progress to
support construction of more large wind farms in Scotland and Wales this year – although, with Brexit battles raging, we may have fallen victim of wishful thinking. Developers have only submitted applications for 18 wind farms in Scotland, Wales and Northern Ireland this year; and we’ve seen little action despite Claire Perry’s talk of more onshore support. A shame. 0

7) PPAs pick up in Europe: We got this one, though. We have seen more corporate power purchase agreements at wind farms in Europe this year, with major deals including Novo Nordisk and Novozymes agreeing the first corporate PPA at an offshore wind project, the 600MW Kriegers Flak; interesting PPAs in Germany and Poland by Mercedes-Benz; and Microsoft’s 180MW PPA at the 400MW Dutch schemer Wieringermeer. 1

8) Frothy pricing continues: One big talking point of our Financing Wind event in London in 2017 was the huge investor interest and high prices being paid for wind farms in Europe – and this remained a talking point at our 2018 event with the much-discussed ‘wall of money’. We’ve seen nothing to spark a major exodus of investors from the wind sector this year and, despite constant economic uncertainty, we haven’t seen a liquidity-sapping crash either. 1

9) Developer consolidation: We predicted that consolidation would focus more on utilities buying developers this year, and that has proved to be the case – with Engie, Equinor, Innogy, Orsted and Statkraft all growing by acquisition. It isn’t an easy market and buying a project portfolio can super-charge growth. There'll be more of this in 2019. 1

10) Battery storage breakthroughs: We made our own battery breakthrough this year by buying sister title Energy Storage Report in September, but that isn’t quite what we forecast. We said more firms would seek to make inroads in storage in 2018, and we are seeing more established wind players teaming up with the likes of Fluence and Tesla. It’s still early days, but storage does look to be on the cusp of major growth. 1

So if I tot that all up it means we got 7.5/10. For the third year in a row. On that basis, it looks like we need to be a bit bolder in our predictions for 2019, which we’ll reveal in our first edition back, on 4th January 2019. Find out how risky when we return.

From all of the team at A Word About Wind, we hope you have a lovely break.