WITH GREAT DEEDS DONE, EU WIND NOW AIMS HIGH AND FAR

Pure Power; Wind energy targets for 2020 and 2030
November 2009 (European Wind Energy Association)

SUMMARY
European leaders are carving out an enormous opportunity and an enormous responsibility for their wind industry by declaring it ready to meet a big part of their anticipated rapid electricity demand growth while simultaneously sustaining their fight against global climate change.

Pure Power; Wind energy targets for 2020 and 2030, from the European Wind Energy Association (EWEA), reports that in 2008 the 27 nations of the EU had 65 gigawatts (GW) of installed wind power capacity, 63.5 gigawatts (GW) onshore and 1.5 gigawatts (GW) offshore. They installed 8.5 GW during the year and, by doing so, avoided €2.3 billion in emissions costs and €6.5 billion in fuel costs.

For 2020, European Commission leaders and EWEA are predicting a total EU installed capacity of at least 230 GW (190 GW onshore and 40 GW offshore). This will require an annual addition of 24.8 GW (17.9 GW onshore and 6.9 GW offshore) and annual spending of €23.5 billion, EWEA reports. The EU's investment will avoid fuel costs of €28 billion (assuming the IEA-forecast $110 per barrel oil) and emissions costs of €8.3 billion per year (assuming a €25 per metric ton GhG price).

For 2030, Europe’s ambitions are even bigger. Foreseeing the bigger potential of offshore wind taking market dominance by then, EWEA is targeting 400 GW of total installed capacity (150 GW onshore and 250 GW offshore) by continuing to install 24.2 GW per year (10.5 GW onshore and 13.7 GW offshore) with yearly investment of €24.8 billion. By sustaining its effort, the EU will avoid fuel costs of €56 billion (at the IEA-forecast $122 per barrel oil) and emissions costs of €15 billion per year (assuming a €25 per metric ton GhG price)

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A note about predictions: Wind regularly surpasses them. The wind industry met the European Commission’s 1997-set target for 2010 (40 GW) in 2005. It surpassed EWEA’s 2003-set target for total EU 2008 capacity of 61.1 GW by 2.8 GW. The EWEA 2003-set estimate for 2008 was 6.8 GW and the actual 2008 total was 8.1 GW (EU-15).

To meet the new goals for 2020 and 2030, EWEA foresees a new, continent-uniting transmission system and a new electricity market that will force investors instead of consumers to confront the increasing burden of emissions costs and fuel price volatility and thereby drive the market to New Energy in general and wind in particular.

Among the rewards to the EU for building the new infrastructure will be a turning back of the costs and burdens of climate change, increased European competitiveness, hundreds of thousands of new manufacturing and related jobs, the associated revenues and a redeemed and once again expanding economy.

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COMMENTARY
In 2008, the EU-27's 65 GW of installed wind power capacity, 8.5 GW built during the year, was 36% of all new electricity generating capacity. The €11 billion in spending paid for 4% of the EU’s 2008 electricity demand and was 8% of total EU electricity generating capacity, the equivalent of 34 million average EU households’ consumption. This was 27% of the EU-15’s required GhG reductions and avoided €2.3 billion in emissions costs and €6.5 billion in fuel costs.

For 2020, EWEA is targeting a total installed capacity of 230 GW. This will require an annual addition of 24.8 GW (17.9 GW onshore and 6.9 GW offshore). The annual €23.5 billion spent will buy enough wind power to meet 24% of total EU electricity generating capacity and 14%-to-17% of EU electricity demand, equal to the consumption of 131 million average EU households. The investment will also avoid fuel costs of €28 billion (assuming the IEA-forecast $110 per barrel oil) and emissions costs of €8.3 billion per year (assuming a €25 per metric ton GhG price).

For 2030, EWEA foresees offshore wind taking market dominance and predicts 400 GW of total installed capacity (150 GW onshore and 250 GW offshore) from a yearly investment of €24.8 billion. This will buy 38% of total EU electricity generating capacity and meet 26-34.7% of EU electricity demand, equivalent to the consumption of 241 million average EU households. It will avoid fuel costs of €56 billion (at the IEA-forecast $122 per barrel oil) and emissions costs of €15 billion per year (again assuming a €25 per metric ton GhG price)

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Present energy, future energy

The 2009 EU Renewable Energy Directive calls for the EU to take its 2005 New Energy of 8.6% to 20% in 2020. Thanks in large part to the wind industry, the EU is on track for that target.

In 2008, new wind was the EU’s single biggest form of new power generating capacity, bigger than coal, gas or nuclear. From 2002 to 2007, wind created 60,000+ new
direct jobs in the EU, 33 new jobs every day. In 2008, European manufacturers owned 60% of the €36 billion world wind turbine market.

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Through 2020, onshore wind will lead the new capacity development. But offshore wind will go from a present 1.5 GW to 40 GW!

By 2030, the EU is expected to be ready for real growth and total wind capacity will grow from a present 65 GW to 400 GW. Offshore wind will move ahead of onshore wind to an astonishing 250 GW.

One of the keys to the this growth will be changing EU’s thinking about its electrical grids. It must shift from the concept of the grids as national infrastructure to thinking about transmission as corridors of the EU electricity trade. By doing this, the EU will be able to move away from a sometimes paralyzing dependence on Russian and Middle Eastern natural gas.

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From 2000 to 2008, EU total installed power grew 225 GW, to 800 GW. This included a 75% increase in natural gas capacity to 177 GW. Wind grew five-fold in the same 8 years, from 13 GW to 65 GW. Fuel oil, coal and nuclear capacities fell off in the same period.

The 10 new EU Member States that joined in May 2004 added 112 GW of capacity (80 GW of coal, 12 GW of large hydro, 12 GW of natural gas, 6.5 GW of nuclear and 186 MW of wind power).

In 2008, 23.9 GW of new capacity was installed in the EU-27, including 8.5 GW (36%) of wind, 6.9 GW (29%) of natural gas and 4.2 GW (18%) of solar PV.

Wind energy was 30% of all power capacity installed in the EU after 2000 and got to 8% of total EU capacity in 2008. The wind industry has been the second biggest builder of new power in the EU (after natural gas) in the last 10 years. 2008 was the first year wind was the single biggest source of new power. Natural gas was second and solar PV was third. 57% (14 GW) of all new EU generating capacity built in the EU in 2008 was New Energy.

The world built 27.1 GW of wind power capacity in 2008 and ended the year with a total of 121 GW. The global wind turbine market grew 37% in 2008. Growth in the last 4 years (40% in 2005, 31% in 2006 and 2007) more than tripled from 8.3 GW in 2004 to 27.1 GW in 2008.

A note about the predicted “nuclear renaissance”: Wind built as much global capacity in 2008 as nuclear built in the last decade (27.1 GW).

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The EU leaders: Germany (24 GW) and Spain (17 GW). They have 63% of the EU’s installed capacity. Italy (3.7 GW), France (3.4 GW) and the UK (3.2 GW) passed the previous third-place Denmark in 2008. Germany (1.665 GW) installed a bit more capacity than Spain (1.609 GW). Then came Italy, (1.010 GW), France (0.950 GW) and the UK (0.836 GW). Ten countries (also Portugal, the Netherlands, Sweden and Ireland) have more than 1 GW of installed capacity.

Germany and Spain still attract the most investment but there is strong market growth elsewhere and there is a second wave of European countries now getting into the industry.

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Wind offshore
Offshore wind is just getting wet (1.5 GW at the end of 2008) but it is where EWEA expects long-term growth.

Offshore wind was 2.3% of EU installed capacity in 2008, up from 1.9% in 2007. 366 MW was built offshore in 2008. The UK got to an installed offshore capacity of 591 MW and took the EU offshore lead from Denmark (409 MW). Both the UK and the Netherlands installed more than 100 MW during the year. By the end of 2008, there were 9 countries, all European, with operating offshore wind installations.

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The emissions factor

Total EU installed wind capacity at the end of 2008 will (assuming an average wind year and assuming 1 terawatt-hour (TWh) of wind power displaces 0.667 Mt of CO2) avoid 91 Megatonnes (Mt) of CO2.

Note: 1 TWh of wind avoids far more CO2 in coal-dependent Poland than in nuclear-rich and natural gas-rich France.

Through wind alone, 89.8 Mt of GhGs were avoided in the EU-15 countries, just over a quarter of their Kyoto Protocol reduction obligation.

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3 2009–to-2013 predictions

The European Commission’s 2008 projection for wind energy is an average annual increase from 2009 to 2015 of 3.9 GW (even though wind built 8.5 GW in 2008).

EWEA’s short-term forecast assumes an average annual growth from 2009 to 2015 of
11.1 GW.

Market analysts BTM Consult and MAKE Consulting expect even bigger growth for each year except 2009. (For 2013, EWEA predicts 12.5 GW, MAKE Consulting predicts 15.3 GW and BTM Consult forecasts 18.4 GW).

For the coming 5 years, EWEA expects a total of 66.3 GW of new wind, MAKE Consulting expects 75.9 GW, BTM Consult expects 91.9 GW and Emerging Energy Research expects 66.5 GW.

There is uncertainty about 2010 growth due to continuing economic sluggishness and a continuing lack of clarity about liquidity in the capital markets and associated project financing.

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Wind energy and electric cars

EWEA’s 2030 predictions do not take consider electricity demand increases from battery electric vehicles (BEVs) though they are expected to be a significant factor in the car fleet by 2020 and a major factor by 2030. Obviously, the more those cars are charged with New Energy-generated electricity, the cleaner they will be.

Some conservative assumptions: An average BEV consumes 0.2 lilowatt-hours (kWh) per kilometer and has an average mileage of 10,000 kilometers per car. This comes to 2,000 kWh per year for an average BEV. At this rate, EU wind in 2008 would have powered 68.5 million BEVs. Predicted 2020 wind capacity will power 291 million BEVs. Predicted 2030 wind capacity will power 577 million BEVs. (In 2006, there were ~230 million cars in Europe.)

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"Summary of wind energy in the EU-27 in 2008
• 65 GW installed capacity: 63.5 GW onshore and 1.5 GW offshore
• Annual installations of 8.5 GW: 8.1 GW onshore (95%) and 0.4 GW offshore (5%)
• Annual investments of €11 billion: €10.1 onshore and €0.9 billion offshore
• Meeting 4% of EU electricity demand
• 36% of all new electricity generating capacity in the EU (Total 2008: 23.9 GW)
• 8% of total electricity generating capacity in the EU (Total end 2008: 801 GW)
• Producing 137 TWh: 132 TWh onshore and 5 TWh offshore, equivalent to the consumption of 34 million
average EU households
• Avoiding 91 Mt CO2 annually, equal to 27% of the EU-15’s Kyoto obligation
• Avoiding €2.3 billion6 of CO2 cost annually
• Avoided fuel cost of €6.5 billion"

"Summary of wind energy in 2020, according to EWEA 2008 targets
• 230 GW installed capacity: 190 GW onshore and 40 GW offshore
• Annual installations of 24.8 GW: 17.9 GW (72%) onshore and 6.9 GW offshore (28%)
• Annual investments of €23.5 billion: €14.7 onshore and €8.8 billion offshore
• Meeting 14-17% of EU electricity demand depending on total demand
• 24% of total electricity generating capacity in the EU (Total end 2020: 951 GW)
• Producing 582 TWh of electricity: 433 TWh onshore and 148 TWh offshore, equivalent to the consumption
of 131 million average EU households
• Avoiding 333 Mt CO2 annually
• Avoided fuel cost of €28 billion (assuming IEA forecast18: fuel cost equivalent to $110/bbl of oil)
• Avoiding €8.3 billion of CO2 cost annually (assuming €25/t CO2)."

"Summary of wind energy in 2030, according to EWEA 2008 targets
• 400 GW installed capacity: 150 GW onshore and 250 GW offshore
• Annual installations of 24.2 GW: 10.5 GW onshore (43%) and 13.7 GW offshore (57%)
• Annual investments of €24.8 billion: €8.3 onshore and €16.5 billion offshore
• Meeting 26-34.7% of EU electricity demand depending on total demand
• 38% of total electricity generating capacity in the EU (Total end 2030: 1,061 GW)
• Producing 1,155 TWh of electricity: 592 TWh onshore and 563 TWh offshore, equivalent to the consumption
of 241 million average EU households
• Avoiding 600 Mt CO2 annually
• Avoided fuel cost of €56 billion (assuming IEA forecast: fuel cost equivalent to $122/bbl of oil)
• Avoiding €15 billion of CO2 cost annually (assuming €25/t CO2)"

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QUOTES
- Christopher Jones, Director, New and Renewable Sources of Energy, Energy Efficiency and Innovation, European Commission: “Wind power has experienced dramatic growth over recent years with more new installations than any other electricity-generating technology, including coal, gas and nuclear, in 2008…In the European Union we have established the target of achieving a 20% share of renewable energies in the overall energy mix by 2020. To reach this we estimate that 34% of Europe’s electricity needs must be met by renewable technologies, with wind power meeting much of the increase. Further benefits will arise from the switch to green energy including significant employment opportunities. Creating energy from sources indigenous to Europe is also central to reducing our energy dependence on fossil fuel exporting nations in less stable regions of the world…”

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- Jones, Director, European Commission: “The European Commission is convinced that there is a huge potential for wind energy in Europe, including offshore wind. However we are also aware of the significant obstacles the industry faces in meeting its targets. Europe needs a Europe-wide electricity grid and interconnectors between Member States, and properly functioning electricity markets, to cope with larger amounts of wind power. Planning processes for wind farms also need to be streamlined…[W]ind energy is heading in the right direction, and one that is essential for the sustainability of our future generations…”

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- From the EWEA report: “Europe’s current electricity supply structure still bears the characteristics of the time in which it was developed. It is national in nature, the technologies applied are ageing and the markets supporting it are underdeveloped. Given the international nature of the energy challenges that the EU is facing, it is astounding that, 22 years after the Single European Act was signed, we still do not have a well-functioning internal market for electricity…Europe is faced with the global challenges of climate change, depleting indigenous energy resources, increasing fuel costs and the threat of supply disruptions. Over the next 12 years, 332 GW of new electricity capacity – 42% of current EU capacity - needs to be built to replace ageing power plants and meet the expected increase in demand. Over the next 12 years, Europe must use the opportunity created by the large turnover in capacity to construct a new, modern renewable energy power supply and grid system capable of meeting the energy and climate challenges of the 21st century, while enhancing Europe’s competitiveness and creating hundreds of thousands of manufacturing and related jobs…With wind energy, Europe is in prime position to turn the looming energy and climate crisis into an opportunity for our companies, a benefit to the environment and a source of increased welfare to our citizens.”