What we got right in our predictions for 2016


December 23, 2016

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In our first Wind Watch of 2016 we made ten predictions on the stories and trends we expected to shape the wind sector this year. How accurate was our crystal ball? Let’s rank ourselves out of ten.

  1. Chinese slowdown but no disaster: Correct. We have seen a slowdown in the Chinese economy, which is stifling growth in demand for electricity and is forcing China’s leaders to rein in wind development plans. But turbulence in its stock market has not yet sparked a global contagion.
  2. Oil to stay below $50 a barrel: Oil prices have crept up in 2016, from $40 a barrel at the start of the year, but stayed under $50 a barrel for most of the year because of Saudi Arabia’s refusal to cut production. It went over this last month after a deal with Opec – but we’re claiming the point!
  3. New global brands to sign wind PPAs: We have seen giants like Amazon, Facebook, General Motors and Google keep signing major power purchase deals with wind farms in 2016. They have been joined this year by firms including 3M, Johnson & Johnson and Target. One more for us.
  4. Brexit risk unsettles EU but no vote yet: Hands up! We got this one wrong – but we weren’t totally off the mark. We said former UK prime minister David Cameron would not hold a referendum on membership of the European Union during 2016 because he would fail to win major concessions from the EU. We were right on that failure, but he called the referendum anyway, and you know the rest.
  5. Increased activity in North America: The surprise five-year extension of the US wind production tax credit in late 2015 has been a big shot in the arm for the sector; while Canada’s Justin Trudeau agreed new clean energy targets for 2025 with Barack Obama. But how much will survive under President Trump?
  6. Senvion future to lead takeover talk: Only half a point. Takeovers were a major talking point in 2016, but Senvion’s IPO in March did not end up being hugely exciting. Our pick of the M&A deals are the planned wind merger by Siemens and Gamesa; and GE’s €1.5bn acquisition of LM Wind Power. Both are due to complete in 2017 – and both larger than Nordex’s €785m Acciona deal.
  7. Confidence erodes in UK offshore: It has been a game of two halves – and only half a point again. The Brexit referendum sowed uncertainty in the first half of 2016 but, in the months since, the UK has committed to new support for offshore wind in its Contracts for Difference regime; and cost-cutting in new projects in Danish and Dutch waters give good hope for the sector’s longer-term prospects.
  8. Listed US yieldcos go conservative: Things could hardly have gone worse for US listed yieldcos after a tough second half of 2015, but we are seeing the likes of NextEra, NRG and Pattern Energy leading a small recovery. The collapse of SunEdison will serve as a warning to others to stay conservative.
  9. Wind will prevail in Latin America: We expected demand for wind to stay strong in Latin America in 2016, and tenders in Argentina, Chile and Uruguay show that governments in the region are still positive on wind. We lose half a mark for singling out the ailing Brazil as a resilient market. Whoops.
  10. Battery storage pioneers take shape: Battery storage is crucial. We know that because we hear it at every event we go to! And the likes of EDF, General Electric, Invenergy, NextEra and RES Group are among those who want to take a leadership position – but we want more projects.

So the results are in and we make it… 7.5/10. We’ll be aiming to beat that when we give our predictions for 2017 in the first Wind Watch of the new year, on 2nd January.

Have a great festive period. We look forward to catching up in the new year – and helping your business thrive in a turbulent 2017.

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