TODAY’S STUDY: WORLD WIND 2010

A friend recently celebrated the birth of her granddaughter. The thrilled family naturally circulated photos of the infant. A thing of beauty to the doting, the little girl nevertheless showed normal traits of the newborn, inflamed skin, bleary eyes, still shaping bone structure.

Not to be cruel, but she looked like a very old drunk after a bad night on the town.

Similarly, the New Energy industries are beautiful to those who are giving birth to them but to those who stand outside the family circle and don't see what they represent, they still don't seem fully formed.

Nevertheless, the world's development of wind energy continues to grow, as the report highlighted below makes clear.

Maybe it would be appropriate to say the wind energy industry is the adolescent of the New Energy industries. It has a scholarship to a fine university and the family knows it will soon be a thriving part of the world's energy sector but others still only see a rebellious upstart.

Wind energy now has an installed capacity of almost 200 gigawatts and generates a significant portion of the electricity in many western nations. It is rapidly on the rise in many emerging economies. It is an even more significant factor in the new generation capacity being built around the world. This means that it is going to play an ever more important role in the world's energy mix in years to come.

Offshore wind is the newborn infant in the utility-scale energy world. It has just begun to advance, though at a pace in keeping with its post-natal status and technology. Outside the family, the Old Energies are still snickering at its appearance. Offshore wind's early growth and technological development indicate, however, that it will by the end of this decade be a factor to reckon with in the world's energy business.

The Old Energies will not be snickering when the infant metaphorically takes a postion at the best grammar school in town away from their child by becoming a major source of power generation to shoreline cities like London, New York and Beijing where it is now beginning to get a foothold.

Consider the report below a contribution to the family album. And make plans now to attend the adolescent's college graduation in a few years, when the only distinction between "traditional" and "alternative" energies will be how fast the latter will be replacing the former.

As for the newborn, there really is no limit to her potential.

World Wind Energy Report 2010
April 2011 (World Wind Energy Association)

Executive Summary

Worldwide capacity reached 196,630 Megawatts, out of which 37,642 Megawatts were added in 2010, slightly less than in 2009.

Wind power showed a growth rate of 23.6 %, the lowest growth since 2004 and the second lowest growth of the past decade.

All wind turbines installed by the end of 2010 worldwide can generate 430 Terawatthours per annum, more than the total electricity demand of the United Kingdom, the sixth largest economy of the world, and equalling 2.5 % of the global electricity consumption.

The wind sector in 2010 had a turnover of 40 billion Euros and employed 670,000 persons worldwide.

China became number one in total installed capacity and the center of the international wind industry, and added 18 928 Megawatt within one year, accounting for more than 50 % of the world market for new wind turbines.

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Major decrease in new installations can be observed in North America and the USA lost its number one position in total capacity to China.

Many Western European countries are showing stagnation, whereas there is strong growth in a number of Eastern European countries.

Germany keeps its number one position in Europe with 27,215 Megawatt, followed by Spain with 20,676 Megawatt.

The highest shares of wind power can be found in three European countries: Denmark (21 %), Portugal (18 %) and Spain 16 %).

Asia accounted for the largest share of new installations (54.6 %), followed by Europe (27.0 %) and North America (16.7 %).

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Latin America (1.2 %) and Africa (0.4 %) still played only a marginal role in new installations.

Africa: North Africa represents still lion share of installed capacity, wind energy plays hardly a role yet in Sub-Sahara Africa.

Nuclear disaster in Japan and oil spill in Gulf of Mexico will have long-term impact on the prospects of wind energy. Governments need to urgently reinforce their wind energy policies.

WWEA sees a global capacity of 600,000 Megawatt as possible by the year 2015 and more than 1,500,000 Megawatt by the year 2020.

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General situation: Stable overall market size, but decrease in market size in major countries

In the year 2010, the wind capacity reached worldwide 196,630 Megawatts, after 159,050 MW in 2009, 120,903 MW in 2008, and 93,930 MW in 2007.

Investment in new wind turbines saw a decline in many parts of the world. For the first time in more than two decades, the market for new wind turbines was smaller than in the previous year and reached an overall size of 37,642 MW, after 38,312 MW in 2009.

China accounted for more than half of the world wind market 2010. Without taking into account China, the world market shrank by one third and decreased from 24,512 MW to 18,714 MW.

Still and in spite of the slowdown, the trend continued that the installed wind capacity more than doubled every third year.

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In the year 2010, altogether 83 countries, one more than in 2009, used wind energy for electricity generation. 52 countries increased their total installed capacity, after 49 in the previous year.

The turnover of the wind sector worldwide reached 40 billion euros (55 billion US$) in 2010, after 50 billion euros (70 billion US$) in the year 2009. The decrease is due to lower prices for wind turbines and a shift towards China.

Worldwide stagnation due to lack of political support

The decrease in new capacity outside China can be seen as a result of insufficient political support for wind energy utilisation.

In a paradox situation, more and more policymakers are declaring their support for increased use of wind energy, but such statements do not go hand in hand with the necessary political decisions.

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While the year 2009 had seen two major milestones – the first North American feed-in law in Ontario and the introduction of the first feed-in tariff in Africa – the year 2010 did not bring comparable breakthrough decisions in national or international policies.

Especially in the USA, there is major regulatory uncertainty and not enough focus on renewable energy.

Also in many developing countries there is still a huge policy gap and there is not yet enough stability and reliability in market frameworks, next to a lack of financial resources.

In addition, the necessary international frameworks for renewable energy have not yet been established.

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Lowest global growth since 2004

With 23.6 %, the year 2010 showed the second lowest growth rate of the last decade.

The growth rate is the relation between the new installed wind power capacity and the installed capacity of the previous year.

Before 2010, the annual growth rate even had continued to increase since the year 2004, peaking in 2009 at 31.7 %, the highest rate since 2001.

The highest growth rates of the year 2010 by country can be found in Romania, which increased its capacity by 40 times. The second country with a growth rate of more than 100 % was Bulgaria (112 %). In the year 2009, still four major wind markets had more than doubled their wind capacity: China, Mexico, Turkey, and Morocco.

Next to China, strong growth could be found mainly in Eastern European and South Eastern European countries: Romania, Bulgaria, Turkey, Lithuania, Poland, Hungary, Croatia and Cyprus, and Belgium.

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Top wind markets 2010: China is dominating

In 2010, the Chinese wind market became a class of its own, representing more than half of the world market for new wind turbines adding 18.9 GW, which equals a market share of 50.3 %.

A sharp decrease in new capacity happened in the USA whose share in new wind turbines fell down to 14.9 % (5.6 GW), after 25.9 % or 9.9 GW in the year 2009.

Nine further countries could be seen as major markets, with turbine sales in a range between 0.5 and 1.5 GW: Germany, Spain, India, United Kingdom, France, Italy, Canada, Sweden and the Eastern European newcomer Romania.

Again twelve markets for new turbines had a medium size between 100 and 500 MW: Turkey, Poland, Portugal, Belgium, Brazil, Denmark, Japan, Bulgaria, Greece, Egypt, Ireland, and Mexico.

By end of 2010, 20 countries had installations of more than 1,000 MW, compared with 17 countries by end of 2009 and 11 countries by end of 2005.

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Worldwide, 39 countries had wind farms with a capacity of 100 Megawatt or more installed, compared with 35 countries one year ago, and 24 countries five years ago.

The top five countries (USA, China, Germany, Spain and India) represented 74.2 % of the worldwide wind capacity, significantly more than 72.9 % in the year.

The USA and China together represented 43.2 % of the global wind capacity (up from 38.4 % in 2009).

Due to the strong performance of the Chinese market, a certain concentration process of the world market on China can be observed, with China alone representing more than half of the market for new wind turbines.

The newcomer on the list of countries using wind power commercially is a Mediterranean country, Cyprus, which for the first time installed a larger grid-connected wind farm, with 82 MW.

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Wind share in electricity supply

All wind turbines installed globally by the end of the year 2010 contribute potentially 430 Terawatthours to the worldwide electricity supply which represents 2.5 % of the global electricity demand.

This energy amount is more than the electricity needs of the United Kingdom, an industrialised country with more than 60 million inhabitants, and the sixth largest economy in the world.

In some countries and regions wind has become one of the largest electricity sources. Again in terms of wind share, Denmark is the world leader. The countries with the highest wind shares are:

- Denmark: 21 %
- Portugal: 18 %
- Spain: 16 %
- Germany: 9 %

In China, wind contributed 1.2 % to the overall electricity supply, while in the USA the wind share has reached about 2 %.

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Employment in the wind sector

By the end of the year 2010, about 670,000 persons were employed worldwide directly and indirectly in the various branches of the wind sector. Within five years, the number of jobs almost tripled, from 235,000 in 2005.

There is an increasing demand for a very broad range of jobs, from engineers, skilled workers to mangers, financial, environmental and legal experts.

Offshore wind

Offshore wind capacity continued to grow in the year 2010. Like in the previous year, wind farms installed in the sea could be found in twelve countries, ten of them in Europe, as well as in China and Japan.

Total installed offshore wind capacity amounted to 3,117.6 MW, out of which 11,617 MW were added in 2010. This represents a growth rate of 59 %, far above the average growth rate of the wind sector.

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The share of offshore in total wind capacity worldwide went up from 1.2 % in 2009 to 1.6 % in 2010. The share of offshore capacity in new installations went up to 3.1 %.

The United Kingdom accounted for more than half of the offshore market in 2010 and installed 653 MW of offshore wind turbines.

With this strong growth, the UK established itself as the by far biggest market for offshore wind turbines, with a total offshore capacity of 1,351 MW.

In the UK, offshore wind represents 26 % of the total wind capacity and 59 % of the capacity added in 2010.

Denmark is the number 2 offshore wind country with a current offshore capacity of 854 MW, 22.9 % of the total wind capacity.

Offshore wind turbines represented 62 % of the capacity added in Denmark in 2010. Another major market for offshore wind was Belgium which added 165 MW, representing 49 % of the market for new wind turbines in this country.

China installed its second major offshore wind farm, near Shanghai, with a capacity of 100 MW. However, in relation to the total size of the wind market in the country, offshore wind still plays only a marginal role (share: 0.5 % of new installations).

Japan added the Kamisu nearshore wind farm (14 MW) which survived the earthquake and tsunami on 11 March 2011 without being damaged…

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Future challenges and prospects worldwide

Six major drivers will have a decisive impact on the mid-term and long-term prospects of wind power:

1. The ongoing debate on climate change and how to find emission free energy solutions.

2. The depletion of fossil as well as nuclear resources, especially reflected in the increasing oil prices which especially represent a huge burden for the developing countries.

3. The damages caused by utilisation of fossil resources, as it became obvious during the oil spill disaster in the Gulf of Mexico, and the economic burden it has put on the economy of the USA.

4. The increasing awareness regarding the hazardous risks related with the utilization of nuclear energy, recently driven by reports on the huge nuclear disaster in Fukushima/Japan.

5. The increasing awareness regarding the potentials and actual contributions of wind and other renewable energies to an energy supply which is economically, socially as well as ecologically sustainable.

6. Further improvements in wind energy and related technologies, including backup and storage technologies.

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In order to make use of the full potential of wind and other renewable energies, it will be of crucial importance to strengthen the related frameworks, institutions and policies.

The world community as well as national governments will have to set up additional policies in favour of wind energy.

Special consideration has to be given to the deployment of renewable energy in the so called developing countries.

Incentives for decentralised and integrated 100 % renewable energy supply need to be created, again especially but not exclusively for developing countries.

Another key issue for the prospects of wind power in this context will be social acceptance. Recent studies from Scotland and Germany suggest that social acceptance is significantly higher in the case of wind farms which are owned by the local community where the wind farm is located. In general, acceptance of wind farms is high, however, people who see themselves as owners of a wind farm naturally have an even more positive attitude.

Policymakers have to draw the right conclusions from such results and introduce legislation that favours community based ownership models of wind farms.

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In spring 2011, the International Renewable Energy Agency IRENA will be officially established. It can be expected that the agency will eventually start its operations and will be able to contribute to the dissemination of technical as well as political and economic knowhow of wind and other renewable technologies.

It will be of crucial importance that renewable energy eventually move into the center of the debate at the UN Climate Change conferences.

In order to provide more financial resources on an international level, WWEA has suggested, together with our partners of the International Renewable Energy Alliance, the creation of a Global Fund for Renewable Energy Investment.

A core element of such a fund should be a global feed-in tariff programme as a primary tool to kick-start markets for grid-connected wind power in the developing world.

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Forecast for 2015 and 2020

In spite of the need to reinforce national and international policies and to accelerate the deployment of wind power, it can be observed that appetite for investment in wind power is strong and many projects are in the pipeline.

Further substantial growth can especially be expected in China, India, Europe and North America.

High growth rates can be expected in several Latin American as well as new Asian and Eastern European markets. In the mid-term, also some of the African countries will see major investment, after all in Northern Africa, but also in South Africa.

Based on the current growth rates, WWEA revises its expectations for the future growth of the global wind capacity:

In 2015, a global capacity of 600,000 MW is possible. By the end of year 2020, at least 1,500,000 MW can be expected to be installed globally.