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Wind Power Looking Strong in 2013

Wind in the Americas has tremendous opportunity for growth, particularly in Latin America. By 2025, the region is expected to reach 46 GW of total installed wind capacity, according to the IHS Emerging Energy Research study, "Latin American Wind Power Markets and Strategies: 2010 – 2025." Brazil is expected to lead the Latin American region with 31.6 GW of installed capacity by 2025, followed by Mexico with about 6.6 GW. Brazil is predicted to house 69 percent of the total Latin American installed wind capacity in 2025, positioning the country as a leader for development, turbine manufacturing and wind turbine component supply chain assembly.

However, in Mexico, reduced political support is expected to cause the wind energy market to stagnate until 2020, according to IHS. For the short-term, though, the Mexican wind energy market is booming. The Mexican Wind Energy Association projects the country’s wind power potential to be around 30 GW. While Mexico does not currently have a national wind energy target, the Global Wind Energy Council says that a national target of 12 GW by 2020 would be feasible. The region best suited for wind development is the Isthmus of Tehuantepec in Oaxaca. GWEC estimates that 10 GW of wind energy could be developed in the region, despite challenging wind and seismic conditions. Currently, 1.9 GW is under construction in Mexico and scheduled to come online by 2015.

The U.S. faces an uncertain future in terms of new wind developments. Under the just passed “fiscal cliff” deal, federal production tax credits (PTC) for wind-powered generation will be available for wind farms that begin construction by the end of 2013. Most U.S. wind energy advocates feel that 2013 will be slow year because of the late passage of the PTC extension. With a full tax code revision on the agenda for the U.S. Congress this year, it is likely that all renewable energy tax credits will be carefully scrutinized and many are expected to be phased out over the next few years.

Wind industry participants regarded the re-election of President Barack Obama as a sure victory for the future of wind power. “The president made the Production Tax Credit an issue in Iowa and Colorado, and he won those swing states, those battleground states,” said Rob Gramlich, acting CEO of the American Wind Energy Association.

Whether the U.S. decides to compete more actively in wind power and other clean technologies will have an impact on America’s energy future, Gramlich said. “Renewable technologies are growing as global industries, and if the U.S. wants to be the leader, we need to compete on a global scale in the renewable power areas.”

Although the U.S. currently has no construction plans for wind projects in 2013, activity has been picking up in Canada. For example, Pattern Energy Group LP, a U.S.-based wind and transmission company, recently started construction on a $600 million, 270-MW wind project joint venture with Samsung Renewable Energy Inc.

Mike Garland, CEO of Pattern Energy, said stale policy for wind energy in the U.S. will cause his company, as well as other developers, to continue looking north. “We clearly have increased our focus and spending in Canada compared to the U.S. Our Ontario projects help us to continue investing in projects and communities despite the political uncertainty affecting the U.S. market.”

International Wind Energy Goals Will Spur Development

Many countries outside of North America have goals of installing a certain amount of renewable energy megawatts by 2020.  With only seven years to go, 2013 will be a big year for planning and development of those projects and wind power will play a key role.

Greenpeace International and the Global Wind Energy Council released their bi-annual report on the future of the wind industry in Beijing in November. The fourth edition of the Global Wind Energy Outlook shows that wind power could supply up to 12% of global electricity by 2020, creating 1.4 million new jobs and reducing CO2 emissions by more than 1.5 billion tons per year, more than five times today’s level. By 2030, wind power could provide more than 20% of global electricity supply.

The Global Wind Energy Outlook paints a picture of three different futures for the wind industry, looking at scenarios out to 2020, 2030, and eventually to 2050; and then measures these scenarios against two different projections for the development of electricity demand: the first based on the International Energy Agency’s World Energy Outlook, and another, more energy efficient future developed by the ECOFYS consultancy and researchers at the University of Utrecht.

“It is clear that wind energy is going to play a major role in our energy future”, said Steve Sawyer, Secretary General of the Global Wind Energy Council. “But for wind to reach its full potential, governments need to act quickly to address the climate crisis, while there’s still time.”

In addition to being a major source of emission reductions, wind energy also uses no fresh water to generate electricity, a unique attribute (along with solar PV) that makes it an attractive option in an increasingly water-constrained world. Wind power is by definition an indigenous energy source, which is particularly useful to countries burdened with large fossil fuel import bills; and wind power is now competitive in an increasing number of markets, even when competing against subsidized conventional energy sources, with little or no financial compensation for its environmental and social benefits: zero CO2 emissions, zero water use, and no air or water pollution.

“The most important ingredient for the long term success of the wind industry is stable, long term policy, sending a clear signal to investors about the government’s vision for the scope and potential for the technology,” said Sven Teske, Greenpeace senior energy expert. “The Global Wind Energy Outlook shows that the industry could employ 2.1 million people by 2020 – 3 times more than today, given the right policy support.”

By 2020, the International Energy Association’s New Policies Scenario suggests that total capacity would reach 587 GW, supplying about 6% of global electricity; but the GWEO Moderate scenario suggests that this could reach 759 GW, supplying 7.7-8.3% of global electricity supply. The Advanced scenario suggests that with the right policy support wind power could reach more than 1,100 GW by 2020, supplying between 11.7-12.6% of global electricity, and saving nearly 1.7 billion tons of CO2 emissions.

Offshore Wind Will Grow – Bringing Economic Development

According to the World Offshore Wind Market Forecast 2012-2016, the offshore wind market currently stands at about 3.5 GW of existing capacity, with more than 100 GW in development. Many of those developments, the majority of which are in the North Sea, will come online in 2013.  Larger turbine announcements will continue to to be made in 2013, such as Siemens and GE’s 4-MW turbines and Vestas’ 7-MW turbine. These larger turbines are specifically made for offshore wind farms.

According to GlobalData, related markets are also set to benefit from the growing popularity of offshore wind power. For example, offshore wind turbine installation vessel revenue is predicted to reach $2,156.5 million by 2020. Vessels are crucial for the installation of large offshore wind foundations and turbines. Around 12 new second-generation vessels are expected to be in European seas in 2012 and 2013 to cater to the growing offshore wind power installations.

Similarly, the global export cable market is expected to grow to 648.2km by 2020 due to the increasing number of wind farms and their increasing distance from shore. The offshore wind turbine foundation market is also expected to grow with offshore wind market and is expected to reach $6,528.8m in 2020.

Against a backdrop of increasing investment from emerging economies, global wind power installed capacity will reach approximately 737 GW by 2020, according to GlobalData.

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