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Updated May 06, 2020

While the projected global wind power installations in 2020 has been revised down by 4 to 9 GW by consulting firms due to impacts of COVID-19, the Global Wind Energy Council’s (GWEC) report found that wind power capacity grew by 60 GW in 2019.

Despite a slowdown in the installation of wind turbines, the council expects to see more than 60 GW of new capacity additions this year. The robust growth will bring the total cumulative installations to 840 GW by the end of 2022, a 56% growth compared to 539 GW in 2017.

The wind industry’s long-term growth potential is evidenced by the strong performance of the First Trust Global Wind Energy ETF (FAN). As of March 2020, the ETF has delivered a return of -7.1%, while the S&P 500 has returned -13.3% during the 12 month period.

Vestas Wind Systems A/S (VWDRY), a Danish wind turbine manufacturer and service provider, is the fastest growing wind stocks – it recorded 27.1% year-over-year earnings per share growth in its most recent quarter report. However, the company posted in the first quarter report a net loss of 80 million euros, a significant drop compared to a 25 million euros profit in the first quarter last year.

Vestas ascribes the loss to the supply chain hiccups and increased costs of logistics brought by the COVID-19 pandemic. The company said it has offered to pay for air freight to keep deliveries on time, thereby maintaining its relationship with customers and position amid pandemic.

This explains why logistics remains one of the key factors determining whether wind power manufacturers can resume operating at full capacity.

Although the company suspended its 2020 financial guidance and axed 400 jobs in April in response to uncertainty caused by COVID-19, the pandemic has limited impact on the manufacturing side. Since the coronavirus outbreak began, none of Vestas’ factories have closed for more than two weeks.

On the bright side, Vestas reported more than 3.3 GW new orders, with revenue rising 29% to 2.2 billion euros in the first quarter 2020 results. In Asia-Pacific region, Vestas has secured a 64 MW and 50 MW wind turbine supply contract respectively in Vietnam and China in May. Earlier in March, the company also won a contract to supply wind turbines for 139 MW wind farm in Japan. Moreover, it has been selected as preferred wind turbine supplier for 300 MW Zhong Neng offshore wind power project in Taiwan.

With offshore wind development plans in Asian countries starting to bear fruit, Asia Pacific has become key to drive growth of global wind power.

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