Moving towards a supply-demand equilibrium
Frost & Sullivan has acknowledged that even as wind energy industry growth rates will slow down, it does not mean the industry will stall.
While unfortunate for certain industry players, the economic slowdown will turn out to be a growth opportunity for others. Cash-rich companies and those with a higher credit rating will be able to extend their wind portfolios at reasonable prices. Cheaper equipment available at shorter lead times for new installations, as well as wider availability of specialised construction services and fiercer competition along every segment of the value chain will force total project costs down. Once the economic outlook brightens, lower project costs are likely to make the investments into wind power more attractive for a wider range of countries and type of investors.
Recently, Frost & Sullivan mentioned that the global economic turmoil has started having an impact on the wind energy industry in Europe. Some companies are cutting down forecasts and production for 2009 and the market is showing the first signs of slowdown. At the same time, this situation will have positive effects like reduction in turbine prices (due to fall in raw material prices), the reduction of delivery times of components leading to a more balanced demand supply situation. The industry seems to be heading from the overheated undersupply state into a supply-demand equilibrium if not into a state of having spare production capacities and thus having to fight rigorously for the new orders still remaining in the market.