China Leading Wind Power Market with Large Difference
Wind power is a form of energy conversion, where the turbines transform the kinetic energy of wind into mechanical or electrical energy. This transformation of energy is considered a renewable energy source. The energy from wind is generated for centuries for tasks such as grinding grain and pumping water. Current commercial wind turbines generate electricity by using rotational energy to run an electrical generator. They are usually made of a rotor or blade. Wind power is one of the fastest-growing renewable energy technologies and offers several benefits with low air pollution and zero water consumption. Moreover, wind energy is also the most affordable source of power creation. The wind turbine used to generate energy from wind can operate for more than 20 years once installed. All these factors are contributing to making wind energy an ideal alternative to fuel, which is one of the significant factors driving the wind power market.
Before five years, wind energy was contributing around 4% of the world’s total electricity. Since then, the generation of wind power has been increased dramatically, owing to concerns over the price of petroleum and impacts of fossil fuel combustion on the weather and environment. China is one of the nations with the most number of installed wind capacity. In 2016, China was generating 168.7 GW of energy, which increased to 281 GW in 2020. With China’s new capacity of generating energy from wind, they are the largest in the world by a wide margin.
Moreover, with steady economic growth and rise in industrial demand, the demand for electricity has increased majorly. Moreover, fast-developing industries and rapid urbanization in China are most likely to increase the demand for electricity. This will result in an increased growth rate for wind power market in China and globally in the upcoming future.
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Shortage of Raw Materials Led to Massive Slowdown of Wind Power Market during COVID-19 Crisis
The COVID-19 pandemic has had a wide and devastating impact on global industries, including the wind power market. Most producers had shut down their plants at the start of 2020, resuming production on a limited scale. Regulation to contain the spread of the virus has caused traffic bans and quarantine measures in China, impacting the supply chain. The production capacity in regards to elements and turbines has declined drastically. Loads of wind turbines are expected to further decline during the year 2021. The wind project installation in China is growing much slower than predicted. Moreover, the global COVID-19 outbreak has worsened the previously severe shortage of key components, adding pressure on wind power development in China. Furthermore, restrictions on global trade impacted the supply chain of raw materials and technology, which China is heavily dependent on other countries. All these factors contributed to the hindrance in the wind power market amid the pandemic.
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Although most facilities are not yet functioning at full capacity, and many workers and employees are working from home, the restoration of manufacturing suggests that the recovery to normal has already begun. However, the impact caused during the shutdown of global industries will take a while to recover. Moreover, restraints on trade activities, travel, and border closings have distinctly decreased the energy demand in various industries, lowering the consumption of wind power. Developing macroeconomic hurdles may provoke the dissolution or suspension of investment decisions for both large and small-scale designs under development. However, with rising population and energy demand, the wind power market is anticipated to increase its production to full capacity in order to flatten the demand curve. The post-COVID-19 pandemic is expected to bring new opportunities in the regional market, as all the closed businesses will require energy to restore their processes.
Supporting Policies, Incentives to Drive Wind Power Market in China, Globally
Wind power is one of the clean sources of renewable energy that does not contribute to air or water pollution. The operational costs are almost nothing once a turbine is installed. In addition, government incentives in China to encourage wind energy development and production to make turbines cheaper are major factors for an increasing number of wind power sources in China. Moreover, wind power is one of the cheapest land-based utility energy sources available in present times. The electricity from the wind farms is usually sold at a steady price, while other energy source prices vary with time and circumstances. Most other power plants rely on the combustion of fossil fuels, such as coal or natural gas, which release particulate matter, nitrogen oxides, and sulfur dioxide that cause human health problems and economic damages. Wind power does not contribute to air pollution as well as does not allow atmospheric emissions that cause acid rain, smog, or greenhouse gases.
The wind is a form of solar energy, as it is caused by the heating of the atmosphere by the sun, while the earth is rotating with its surface irregularities. Thus, the infinite source of wind can be transformed into energy for a long time. The increased production of wind energy is also proving propitious in the economy in rural areas, where most of the best wind sites are found. Moreover, China has strict policies regarding limiting carbon dioxide emission and the government is offering incentives to adopt renewable energy sources. All these factors are anticipated to fuel the growth of the wind power market during the forecast period.
Government Initiatives to Increase Wind Power Prove to be Major Advantage
The wind power market is estimated to exceed US$ 1.5 Trn by 2031, expanding at a CAGR of ~10% during the forecast period. The rising need for electricity while the country is developing at a rapid pace is majorly contributing to the growth rate. Moreover, the Government of China has plans to increase the share of non-fossil fuels in primary energy consumption to around 25% by 2030. This is most likely to improve the demand for wind power equipment in the upcoming period. The plans include a road map to install 1200 GW of wind and solar energy by the end of the forecast period.
