Global electricity demand is projected to increase 60% from 2019 through 2050, and generating capacity is expected to reach over 20,000 gigawatts with wind energy making up 33% of the 2050 global power generation mix1.
We expect the long-term trend for wind energy to strengthen based on the low cost of wind energy and continued efforts to further drive down cost, as well as strengthening of political will around the world to positively impact climate change. In the U.S., new wind projects now have until the end of 2025 to be commissioned to qualify for the Production Tax Credit; utilities are planning for expanded wind penetration due to the unsubsidized cost competitiveness; commercial and industrial demand is growing; and states are adding renewable portfolio targets. In Europe, the European Council voted to cut emissions beyond the original target in the European Green Deal to 55% by 2030 compared to 1990 levels. China committed to reach carbon neutrality by 2060, and India committed to increase its renewable energy capacity to 450 GW by 2030 and has further committed to 40% non-fossil fuel energy by 2030 as part of the Paris Agreement.
The levelized cost of wind energy has dropped 71% since 20092. The key drivers that continue to reduce the cost of wind power are longer wind blades, taller towers, increased megawatt ratings, higher capacity factors, lower cost of operations and maintenance and siting advancements. Average wind blade lengths for TPI’s customers are projected to increase by approximately 25% by 20283 compared to what we are manufacturing today.
We are a key supplier to our customers in the manufacture of wind blades and related precision molding and assembly systems. We dedicate capacity in our global world-class facilities for our customers through long-term supply agreements and a dedicated supplier model. This collaborative dedicated supplier model provides us with contracted volumes that generate significant revenue visibility, drive capital efficiency, and allow us to produce wind blades at a competitive total delivered cost.