In the International Energy Agency’s roadmap to zero emissions in the global energy sector, wind energy is expected to be the single largest generator of electricity by 2050, making up 35% of total generation and with over 8,000 gigawatts installed compared to approximately 740 gigawatts in 2020. This more than 10 times increase in installations is a significant opportunity for the wind industry and TPI1.
We expect the long-term trend for wind energy to strengthen based on the low cost of wind energy and strengthening of political will around the world to positively impact climate change. In the U.S., wind projects that started construction in 2021 have until the end of 2025 to be commissioned to qualify for the Production Tax Credit with discussions to extend this further as part of a broader based climate policy agenda that would provide additional industry investment and support if passed; 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 target of the European Green Deal is to reduce emissions 55% by 2030 compared to 1990 levels. The European Union is accelerating its efforts further through the REPowerEU program for more affordable, secure, and sustainable energy. China committed to reach carbon neutrality by 2060, and India committed to increase its renewable energy capacity to 500 GW by 2030 and carbon neutrality by 2070.
The levelized cost of wind energy has dropped 72% 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. Almost all onshore wind blades are expected to be between 80 meters to 100 meters by the end of this decade.3
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 supply agreements and a dedicated supplier model. This collaborative dedicated supplier model provides us with contracted volumes that generate revenue visibility, drive capital efficiency, and allow us to produce wind blades at a competitive total delivered cost.