Wind power growth downgraded, solar up: analysts

LONDON (Reuters) - Wind power growth will be slower than expected this year and next due to weak power demand, Barclays Capital and HSBC analysts said on Tuesday, contrasting wind with a forecast uptick in solar power.

Barcap cut its global wind power growth forecast by 4 percent for 2010 and by 3 percent for 2011, while HSBC cut its forecast for 2010 by 1.7 percent and for 2011 by 1.5 percent.

"The current surplus in power generation, coupled with weak economic growth and uncertain or revised regulation, made for a tough operating environment in the global wind sector," said the Barcap report, entitled 'When the going gets tough'. Barcap now forecasts 35.3 gigawatts of newly installed wind power in 2010, slower growth than the 36.9 GW installed in 2009. HSBC forecasts 36.3 GW installed in 2010. "Weak electricity demand resulting from energy efficiency measures and recessionary forces have made national wind installation targets easier to achieve," said HSBC in a report entitled 'Becalmed? Is it all over for the global wind markets?'

"This is bad news for wind turbine demand. We continue to favor the wind farm developers, with our preference for this part of the value chain increasing. In this note, we reiterate our cautious stance on the (wind turbine) OEMs," it added.

Developers have large, existing portfolios of profitable wind farms, regardless of changes in future turbine demand.

HSBC most favored Acciona and EDP Renovaveis. Barcap recommended Gamesa as the best positioned wind stock.

Both reports said falls in forecast growth in the United States and Europe this year would partly be offset by increases above previous forecasts in China and the rest of the world.

Forthcoming U.S. renewable energy laws as they appeared in draft could imply flat growth in the United States through 2020.

Meanwhile, most European countries are now ahead of or on target to meet their 2020 renewable electricity goals, under wider European Union goals.

By contrast to a dip in wind power fortunes, Barcap forecast what it described as a "stellar" 2010 for solar power on the back of strong growth in Germany as developers rush to complete projects before a cut in support tariffs there.

That led Barcap to increase its forecast for solar installations in Europe by 42 percent to 9.3 gigawatts in Europe, including 6.8 GW in Germany.