The global wind energy sector is experiencing a remarkable surge as the first quarter of the year witnessed a new record in order intake. According to a comprehensive analysis conducted by Wood Mackenzie, a leading research and consultancy group, global wind turbine orders soared to an impressive 2350MW, representing a significant 27% increase year-over-year (YOY).
The driving force behind this unprecedented activity was a Q1 high achieved in China, where orders reached a staggering 15.2GW. Additionally, Latin America experienced its best-ever Q1 growth, with orders totaling 1.7GW, while the United States surpassed all expectations, leaping to 1.8GW from a mere 0.8GW in the same period last year, effectively doubling its performance and surpassing its H1 2022 total.
In total, global wind turbine orders amounted to an estimated $15.2 billion, marking a $3 billion increase compared to the previous year. Luke Lewandowski, research director at Wood Mackenzie, highlighted the significant role played by China in driving global activity. He also expressed optimism about the emergence of other regions building momentum, such as Latin America, where Argentina and Brazil contributed to a record-breaking Q1. The United States, too, is experiencing renewed confidence and order growth, thanks in part to the Inflation Reduction Act.
However, while certain areas outside of China witnessed growth, overall activity from Western original equipment manufacturers (OEMs) remained relatively stagnant, with Q1 orders declining by 9% YOY. This divergence in performance can be attributed to fundamentally different strategies employed by these two markets. China prioritizes aggressive growth strategies to fulfill local government renewable requirements, while Western OEMs focus on enhancing profitability.
Lewandowski emphasized the selective and disciplined approach of Western OEMs, driven by the goal of improving profitability. Strategies such as measured technology development and price indexing have been implemented to expedite a return to profitability, resulting in relatively stable pricing in markets like the United States. This quarter has witnessed the stabilization of turbine pricing, thanks to these prudent measures.
Although offshore wind orders experienced a 12% YOY decline, Europe demonstrated growth in this sector, accounting for 3GW of offshore activity. Offshore wind orders constituted 13% of all orders in Q1, underscoring the growing significance of this sector in the overall wind energy landscape.
For the second consecutive quarter, Envision secured the largest share of new orders, with an impressive 3.6GW, closely followed by Vestas (3.3GW) and SANY (2.6GW). These leading companies exemplify the dynamism and competitiveness of the global wind turbine market.
The record-breaking Q1 performance in global wind turbine order intake signals a remarkable growth trajectory for the wind energy industry. With China continuing to spearhead global activity and promising developments emerging from regions outside of China, the sector is poised for sustained expansion. Western OEMs' focus on profitability and the stabilization of turbine pricing further contribute to a favorable outlook. As the world increasingly embraces renewable energy, wind power remains a crucial component of the clean energy transition.
