COPENHAGEN (Reuters) - Wind turbine maker Vestas sees U.S. demand peaking in 2020 as government incentives, which have spurred investments in the sector, are phased out.
The Danish company is the turbine maker most exposed to the U.S. market, where it competes with General Electric and Siemens Gamesa.
Strong interest from utilities looking to replace retiring coal assets and big companies looking to buy renewable power will ensure U.S. demand does not fall off a cliff, as some analysts have predicted, Vestas’ North American chief said.
“There’s no such thing as a cliff,” Chris Brown said at the firm’s capital markets day on Thursday.
“I think that 2020 is going to be the peak of where the demand is and you’re going to see it fall off a little bit as you lose the PTC (production tax credit). And then you’re probably going to see it come back,” he later told Reuters.
The PTC scheme has been critical to enabling wind projects to compete with fossil fuel plants but will start being gradually phased out from 2020.
Brown pointed to 22 gigawatt (GW) of unmet demand by 2030 from so-called RE100 companies, which is an alliance of firms including Goldman Sachs, Walmart and Starbucks that aims to get 100 percent of electricity from renewable sources to combat climate change.
Another 11 GW of unmet demand comes from utilities across the United States looking to replace coal plants with new wind generation, Brown added.
Reporting by Stine Jacobsen; Editing by Mark Potter