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Growth Potential in Emerging Markets

Entry barriers to emerging markets remain high due to unstable regulatory regimes, siting issues, and/or grid-related barriers such the lack of infrastructure at windy sites. 

After Poland, Hungary is likely to be one of the most active Eastern European wind markets.  However, although the combination of a high incentive scheme with a relatively straightforward permitting process facilitates project development, grid capacity constraints will cap market growth at 330 MW by 2010. 

Turkey, as the largest emerging market in terms of size and population, is driven by large local industrial groups, with the number of projects installed per year as well as the average project size expected to increase over time. Although the country’s incentive scheme recently became more stable, thereby lowering investment risks, the authorisation process is rather congested due to growing site speculation, and remains difficult to navigate.  As such, it is likely that Turkish Independent Power Producers (IPPs) will continue to dominate the wind market.

In both Estonia and the Czech Republic, there are interesting opportunities for growth given that wind investment risks are moderate despite the existing regulatory frameworks, site approval processes and competitive environments.  However, project size in these markets will remain constrained by space and resource availability.

Bulgaria, Lithuania, and Romania lead this group because each has recently adopted a support system, with Lithuania and Bulgaria offering feed-in tariffs and Romania a green certificate scheme.  At the moment, the authorisation processes in these markets are relatively expedient, although delays and congestion are anticipated as project queues get longer, taxing inexperienced permitting authorities.