The Path to Drawdown: Wind Manufacturing
To solve climate change and remain below 1.5ºC of global temperature increase, the globe needs to switch to generating power from fossil fuels to using 100% emissions free sources.
Global wind capacity has risen steadily by around 20% per year for the past decade. Thanks to this expansion, the cost of electricity generated from wind continues to fall, even in areas with low wind speeds.
According to Project Drawdown, to be on a path to remain under 1.5C° of warming, onshore wind turbines will need to be generating 26.85% and offshore wind generating 3.2% of global electricity by 2050.
To get there, the onshore wind industry will need to continue to scale over the next few decades
- 1,212 TWh of onshore wind electricity generated in 2018
- 21,715 TWh needed by 2050
- CAGR of 9.44% from 2018 - 2050
The IEA projects (p. 198) that, to reach a 100% clean electricity grid by 2050, annual wind capacity will have to increase from 737 GW in 2020 to 3101 GW in 2030, and finally to 8265 GW in 2050.
Broadwind, Inc (stock ticker: BWEN) is a manufacturer of structures, equipment and components for clean tech and other specialized applications. Headquartered in Cicero, Illinois, their largest business segment is to provide steel towers and repowering adapters to wind turbine manufacturers in the US.
BWEN's Role in Drawdown
According to the IEA (p. 198), for the world to reach net-zero emissions by 2050, it needs to increase wind powered electricity capacity from 737 GW in 2020 to 3,101 GW by 2030, and to 8,265 GW by 2050.
In 2020, BWEN’s wind tower production facilities have a combined production capacity of up to 500 towers per year, enough to support 1.1 GW (p. 8) worth of new wind generation capacity, or 0.15% of global market share. For BWEN to maintain this market share through the IEA’s projected wind capacity growth, they would need to expand their wind tower production to 2,314 by 2030, and to 6,167 by 2050.
For BWEN to pull off this level of growth, its year-on-year production capacity would need to be about 15.5% between now and 2030, and 5% between 2030 and 2050. Given that their wind tower production capacity has hardly increased since 2016 (1.95% CAGR), this would be a challenging feat.
BWEN: What We Like
We applaud BWEN for making the production of equipment and components for the wind energy sector its top business segment, and we urge them to continue this focus on wind power:
Wind-related revenue has consistently accounted for 50% or more (p. 13) of total revenue since 2016