TODAY’S STUDY: The World’s Wind Right Now
Global Wind Report; Annual Market Update 2017; Opening up new markets for business
April 2018 (Global Wind Energy Council)
The Next Big Thing?...Global Status Of Wind Power In 2017
The global wind power market remained above 50 GW in 2017, with Europe, India and the offshore sector having record years. Chinese installations were down - 19.66 GW - but the rest of the world made up for most of that. Total installations in 2017 were 52,492 MW, bringing the global total to 539,123 MW. The annual market was in fact down 3.8% on 2016’s 54,642 MW; and the cumulative total is up 11% over 2016’s year-end total of 487,279 MW.
The offshore segment had a record year with 4,334 MW of installations, an 87% increase on the 2016 market, bringing total global installations to 18,814 MW, and representing a 30% increase in cumulative capacity. Offshore is still only about 8% of the global annual market, and represents about 3.5% of cumulative installed capacity, but it’s growing quickly.
Beyond the statistics, however, is the fact that wind power is in a rapid transition to becoming a fully commercialized, unsubsidized technology; successfully competing in the marketplace against heavily subsidized fossil and nuclear incumbents. The transition to fully commercial market-based operation has meant that the industry is going through a period of adjustment and consolidation. Also, some governments have left ‘gaps’ in the transition. The global 2017 numbers reflect that, as will installations in 2018.
Total new investment in clean energy rose to US$ 333.5bn (€ 296.8bn1 ) in 2017, up 3% over 2016, but still lower than the record investment of US$ 348.5bn (€ 324.6bn) in 2015. According to BNEF, China alone accounted for 40% of total investment with US$ 133bn (€ 118.7bn); and the Asia Pacifi c region as a whole invested US$ 187 billion, over 57% of the total. Total investment in wind amounted to 107 billion US$.2
Cratering prices for both onshore and offshore wind continue to surprise. Markets in such diverse locations as Morocco, India, Mexico and Canada range in the area of US$ 0.03/ kWh, with a recent Mexican tender coming in with prices below US$ 0.02. Meanwhile, offshore wind had its fi rst ‘subsidy-free’ bids in a tender in Germany last year, with tenders for more than 1 GW of new offshore capacity receiving no more than the wholesale price of electricity. Overall, offshore prices for projects to be completed in the next 5 years or so are half of what they were for the last fi ve years; and this trend is likely to continue.
The technology continues to improve, opening up many areas for onshore wind development which were previously not commercial. More sophisticated power electronics, better planning and overall management have contributed to increased reliability as well as price reductions. Offshore, the size of the machines continues to boggle the mind, and we will have 1X MW machines in the not too distant future. Indeed, on 1 March GE announced its long-awaited next-gen design, the 12 MW Haliade-X, with a rotor diameter of 220 m, which could come into commercial operation as early as 2021. It might not be too far into the next decade before we’re talking about 2X machines for massive fl oating offshore installations in the deeper waters of the outer continental shelf.
Today, wind is the most competitively priced technology in many if not most markets; and the emergence of wind/solar hybrids, more sophisticated grid management and increasingly affordable storage begin to paint a picture of what a fully commercial fossil-free power sector will look like.
China, the largest overall market for wind power since 2009, retained the top spot in 2017. Installations in Asia once again led global markets, with Europe in the second spot, and North America in third.
Once again in 2017, as has been the case since 2010 (except for 2012), the majority of wind installations globally were outside the OECD.
By the end of 2017 there were 30 countries with more than 1,000 MW installed: 18 in Europe; 5 in Asia-Pacifi c (China, India, Japan, South Korea & Australia); 3 in North America (Canada, Mexico, US), 3 in Latin America (Brazil, Chile, Uruguay) and 1 in Africa (South Africa).
Nine countries have more than 10,000 MW of installed capacity, including China, the US, Germany, India, Spain, the UK, France, Brazil and Canada.
China will cross the 200,000 MW mark in 2018, adding another milestone to its already exceptional history of renewable energy development since 2005.
Asia: Record Year For India…North America: Strong Growth Continues In The Us…Europe: New Records Abound…Latin America And The Caribbean: Brazil Continues To Lead…Pacific…Africa And The Middle East…
2017: A Transition Year
In 2017, the global wind industry continued with installations above 50 GW. After fi ve years of essentially fl at markets from 2009-2013 due to the global fi nancial crisis, installations crossed the 50 GW mark in 2014 mark, and have stayed over 50 GW for the last four years, with the anomalous Chinese market in 2015 pushing the total over 60 GW. Globally, cumulative installations passed 500 GW in 2017, ending the year at about 540 GW.
Wind power is increasingly the most competitive way of adding new power generation to the grid in an increasing number of markets, even competing against heavily subsidized incumbents; and for the fi rst time we can say that this now includes offshore, with ‘subsidy-free’ winning bids in Germany’s offshore auction in 2017, followed by a Dutch ‘subsidy-free’ tender, which has just (20 March) been awarded for two projects to be built out by 2022.
Wind is a mature technology, with proven reliability and cost competitiveness. It is more and more often the technology of choice for utilities, and has also dominated the surging corporate PPA market, where savvy companies look to both provide a hedge against potentially wildly fl uctuating fossil prices, and at the same time reduce their carbon footprint – not to mention ‘greening’ their image with increasingly vigilant consumers.
Wind is making a rapid transition from a technology reliant on ‘support’ in most markets, to one where it stands on its own economically, even without any kind of fi nancial benefi t for the major rewards society reaps from its deployment in terms of clean air and carbon-dioxide emissions reductions. Hopefully we’ll get there one day. But in the meantime, the industry will have to struggle with shifting policy regimes and the inevitable gaps that accompany them and do our best to take it to the next level – annual installations of 60, 70, or even 100 GW/year. This will be necessary to meet the Paris targets and secure a sustainable energy future on a planet left habitable for succeeding generations.
2017 saw a concentration of installations in a smaller number of markets in Europe, Africa, and Latin America, reversing a trend for a diversifi cation of markets that has marked the industry’s growth over the last decade. That needs to change, and there are solid signs that it will in 2018, but we shall see.
There is a still an acute need around the world for new power generation, which is clean, affordable, indigenous, reliable and quick to install. Wind power is leading the charge in the transition away from fossil fuels; and continues to blow away the competition on price, performance and reliability.