BERLIN - The global wind energy market is set to keep growing in 2008, despite pressure on turbine makers from raw materials prices, but it is likely to slow in Germany, the German Engineering Federation (VDMA) said on Tuesday.
Thorsten Herdan, head of VDMA power systems, said Germany, one of the world's biggest markets, would probably experience a further slowdown after shrinking by 25 percent in 2007.
"Worldwide we see further growth," Herdan said.
"The situation in the supply markets is a little tight and that has to do with the fact that lots of companies have invested in new capacity," he told a news conference.
The world market for wind energy grew by 30 percent in 2007, with around 20,000 megawatts (MW) installed, the VDMA said. This was compared with 32 percent growth in 2006.
Herdan said China had experienced three-fold growth while the U.S. market had doubled in size.
Debate over European Union plans on how to share the burden of cutting carbon dioxide emissions in Europe and the planning rehaul of the emissions trading system (ETS) had, however, caused some uncertainty among investors, Herdan said.
"This current discussion is not necessarily beneficial for potential investors in the market," he said.
Herdan said the German outlook was gloomy, despite a draft law that seeks to make wind energy production more attractive amid plans to shut down the country's nuclear power plants.
"Even respective of this, there will be a fall, definitely. It could happen that we have a fall of around 1,000 MW," Herdan said. Germany is the world's largest producer of electricity from wind power and has 22,247 MW installed.
Hermann Albers, President of the German Wind Energy Association, said the German market was under pressure from high raw material and energy costs, which make up around 10-20 percent of total manufacturing costs, according to the VDMA.
Around 1,666 MW worth of wind turbines were installed in Germany in 2007, down 25 percent from a year earlier.
Albers said the turbine industry was not planning to move production to other countries, unlike Finnish cell phone maker Nokia, which last week it announced the closure of a German plant.
"Our policy at present is that Germany continues to be an attractive market," Albers said.
He added that while Germany's first offshore wind farms should be running by 2010, they were not going to be the answer to Germany's energy needs.
"The wind industry and power companies are in agreement that we are going to have relatively small capacity, even taking into account climate protection," he said, estimating that around 500 to 1,000 MW were expected to be produced from offshore in 2010.
"The onshore market remains and will remain of central importance for the industry and the government's climate protection program," he said.
Reporting by Sylvia Westall, editing by Anthony Barker
© 2008 Reuters