RT @SPGSustainable1: In our most recent report, we outline nine trends we see rising in prominence in the #sustainability landscape during…
Discover more about S&P Global’s offerings.
Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Customer LoginsThe rapid growth expected for global wind energy installations over the coming decade and increasing wind turbine sizes will result in wind industry steel consumption doubling this decade. Steel prices have more than doubled in some regions between 2020 and 2021 on account of severe supply chain disruptions, highlighting the potential risk to the wind industry due to the commodity's price volatility.
Our team takes a closer look at the demand for steel by the wind industry, current pricing challenges and the normalization timeframe, potential steel price impacts on wind capital costs and levelized cost of electricity, and future challenges related to steel in for the wind industry.
The global wind industries steel consumption is expected to
double this decade reaching 147 MMT between 2021-2030, driven by
forecast global additions of 960 GW. Steel is critical for both
onshore and offshore wind turbines, making up 20% and 90% of
turbine mass for onshore and offshore wind, respectively. Both
onshore and offshore turbine towers are fabricated from steel, and
while onshore wind turbines rely on concrete for their foundations,
offshore wind turbines rely on steel structures such as monopiles
and jackets for their foundations.
Figure 1: Annual steel consumption by the wind sector by technology, 2020-30
This is important considering average global steel prices almost doubled between 2020 and 2021, reducing wind OEM profit margins and increasing wind project costs, highlighting the risk of steel price volatility causing disruption along the wind industry value chain.
Figure 2: Steel price overview
The recent steel price spikes alone could lead to increasing wind project CAPEX and LCOE of 6% and 4.5%, respectively. Onshore wind project CAPEX is most significantly impacted by increasing steel price due to having overall lower project costs compared to offshore wind. Future steel related challenges exist for the wind industry due to increasing implementation of carbon pricing mechanisms, steel industry decarbonization costs along with component fabrications and transport difficulties.
Figure 3: Impact of steel price doubling on wind and solar PV
Learn more about our renewables coverage.
Schedule 1-1 time with our experts, or ask them a complimentary question.
Posted 13 December 2021 by Indrayuth Mukherjee, Senior analyst, Clean Energy Technology and Renewables, S&P Global Commodity Insights and
Jason Sheridan, Senior Research Analyst, S&P Global Commodity Insights
This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.
RT @SPGSustainable1: In our most recent report, we outline nine trends we see rising in prominence in the #sustainability landscape during…
𝗛𝗮𝗽𝗽𝘆 𝗡𝗲𝘄 𝗬𝗲𝗮𝗿! 𝗧𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻 - A new journey for a new year! This account will be retired tomorrow. To keep up to da… https://t.co/Qaj4sgwJHx
𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗡𝗲𝘄𝘀! 𝗧𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻 - This account will be retired in 2 days. To keep up to date with the latest… https://t.co/nB3tSHqnt5
𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗡𝗲𝘄𝘀! 𝗧𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻 - This account will be retired in 3 days. To keep up to date with the latest… https://t.co/0ooKmljhBi