World Wind Outlook: Down But Not Out

Despite this impressive increase, investment in new turbines in fact saw a decline in many parts of the world. For the first time in more than two decades the turbine market fell against the previous year to 37,642 MW in 2010, down from 2009's 38,312 MW.

Global turnover for the sector reached €40 billion (US$55 billion) in 2010, down 20 percent on the €50 billion ($70 billion) in 2009. This decrease was largely due to lower prices for wind turbines.

China accounted for more than half of the world wind energy market in 2010. If China were excluded, the offshore sector would in fact have shrunk by one third from 24,512 MW to just 18,714 MW. Still, installed wind capacity has more than doubled every third year, a trend which continues even in the face of the downturn.

Last year a total of 83 countries, one more than in 2009, used wind for electricity generation and 52 countries increased their total installed capacity, up from the 49 in the previous year.

Offshore wind capacity continued to grow in 2010 and was apparent in 12 countries, 10 of which were in Europe. Japan and China were the other two. The total global installed offshore wind capacity reached 3117.6 MW, of which 1161.7 MW was added in 2010, representing a growth rate of 59 percent. Offshore wind capacity, in terms of the global wind sector, saw its share increase from 1.2 percent in 2009 to 1.6 percent in 2010. In terms of new installations, offshore capacity accounted for 3.1 percent during the year.

The UK accounted for more than half of the global offshore market in 2010, installing 653 MW. Offshore represents 26 percent of the country's total wind capacity and 59 percent of that added in 2010. Denmark ranked as the number two offshore with 854 MW installed, representing 22.9 percent of its total wind capacity. Offshore turbines accounted for 62 percent of new capacity in Denmark in 2010.

Another major market for offshore wind was Belgium which added 165 MW, representing 49 percent of its wind market.

Worldwide Stagnation

This decrease in new capacity outside of China can be associated a lack of insufficient political support for wind energy utilisation. Paradoxically, more and more policymakers are declaring their support for increased use of wind energy, but such statements do not necessarily go hand-in-hand with the required political decisions.

While 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 — 2010 failed to deliver comparable breakthrough decisions in either national or international policies.

In the US especially, there remains major regulatory uncertainty and a lack of focus on renewable energy.

In many developing countries there are huge policy gaps and not yet enough stability and reliability in market frameworks, as well a lack of financial resources. In addition, the necessary international frameworks for renewable energy have yet to be established.

Global growth rates (%) for wind installations 1998-2010

With a growth rate of just 23.6 percent, 2010 recorded the second lowest increase in the past decade. Prior to 2010 this figure had been increasing year-on-year since 2004, peaking in 2009 at 31.7 percent.

By country, the largest growth rate for 2010 was in Romania, which increased its capacity by 40 times to 591 MW. Bulgaria also scored a growth rate in excess of 100 percent, closing the year at 112 percent. In 2009, four major wind markets more than doubled their installed wind capacity: China, Mexico, Turkey, and Morocco, while in 2010 only two markets reported above 100 percent growth.

Next to China, strong growth was mainly concentrated in east and southeast European countries including Romania, Bulgaria, Turkey, Lithuania, Poland, Hungary, Croatia, Cyprus, and Belgium.

Africa, with the exception of Egypt and Morocco, and Latin America, excluding Brazil, again lagged behind the rest of the world in their commercial use of wind power.                           

Top Wind Markets in 2010

In 2010, the Chinese wind market came into its own, representing more than half of the world market for new wind turbines, adding 18.9 GW and scoring a market share of 50.3 percent. Meanwhile there was a sharp decrease in new capacity in the US — where its share in new wind turbines fell to 14.9 percent (5.6 GW) in 2010 — from 25.9 percent, or 9.9 GW, in 2009. Nine further countries saw turbine sales ranging 500-1500 MW: Germany, Spain, India, the UK, France, Italy, Canada, Sweden and Romania.

Twelve other countries purchased 100-500 MW of new turbines in 2010: Turkey, Poland, Portugal, Belgium, Brazil, Denmark, Japan, Bulgaria, Greece, Egypt, Ireland, and Mexico.

By continent, the most dynamic progress of the wind industry took place in Asia, and the focus of the global wind sector moved further away from Europe and North America. Asia became the new continental leader, accounting for 54.6 percent of the newly installed wind turbines compared with 40.4 percent in 2009 and 31.5 percent in 2008.

Five years ago Europe dominated the world market for new wind turbines with 70.7 percent of the market. It fell back to third position in 2009 but in 2010, it was resurgent in second position, accounting for 27% of the new installed turbines, again ahead of North America whose share dropped from 28.4 percent in 2009 to 16.7 percent in 2010. Europe now accounts for less than half of the total global capacity and over the past few years its share has steadily fallen from 65.5 percent in 2006 to 43.7 percent in 2010.

Latin American countries were responsible for 1 percent in 2010, 1.5 percent in 2009, and 0.6 percent in 2008.

Africa

Wind turbines installed in Africa by the end of 2010 had a total capacity of 906 MW, out of which 155 MW were added in three countries, Egypt, Morocco and South Africa. Although the African continent was already on a comparatively low level, the 2010 growth rate of 20 percent was again below the global average of 23.6 percent.

Northern African countries are leading the way on installed capacity with Egypt's 550 MW and Morocco's 286 MW. Together with Tunisia's 54 MW the region represents the lion's share of African wind capacity.

Following the introduction of feed-in tariffs, South Africa with its current capacity of 10 MW has the potential to become the wind leader in southern Africa, with an existing development pipeline of 700 MW of new wind projects expected to be installed by 2013. Egypt aims to install more than 7 GW of wind power by 2020, while Morocco with its Sahara Wind project has ambitious long-term wind plans in the range of several gigawatts.

In general, new political support schemes will be necessary to support the financing of wind farms in Africa, especially in sub-Saharan Africa. A special consideration should be given to small-scale and hybrid systems for rural electrification. For this purpose, the establishment of a global fund for renewable energy investment would offer huge opportunities for many African countries to bypass one of the major barriers to wide-scale wind energy deployment.

Asia

Asia became the focal point of the wind industry worldwide in 2010, mainly thanks to China, but also due to robust development in India.

Total installed wind capacity in Asia reached 61.2 GW (31.1 percent of global capacity) in 2010 and the continent had the highest growth rate of all world regions at 50.6 percent, but down from 63.3 percent in 2009 when it added 20.6 GW.

After four consecutive years during which China doubled its installations, the country still showed impressive growth of 73.3 percent and became number one in terms of new installations and total capacity to reach 44.7 GW by the year end.

Despite the need for stronger policies, the appetite for investing in wind remains strong (Source: LM Glassfibre)

However, China still faces major challenges with grid connection issues. According to the China Electricity Council, only 31,070 MW were actually feeding electricity into the national grid, while a large number of wind farms are still awaiting grid connections.

In parallel with the role of China as the dominant market, its wind industry is becoming more competitive and has dramatically increased its share of global sales. The country's largest manufacturer, Sinovel, is now the world leader with a market share of almost 12 percent.

In 2010 India remained the second largest Asian market with a 10.7 percent growth rate, for a total capacity of 13 GW. Three medium-size Asian markets also showed healthy growth rates: Japan (total capacity 2.3 GW, up on 2.1 GW in 2009), Taiwan (519 MW up on 2009's 436 MW) and South Korea (379 MW following the 364 MW of 2009).

Meanwhile, Vietnam installed a major project, tripling capacity from 9 MW to 31 MW.

Australia and Oceania

In 2010, the region appeared to stagnate, adding only 11.8 MW, following the 555 MW developed in 2009, to reach a total capacity of 2386 MW. However, a total of more than 1 GW is currently under construction in Australia alone, while New Zealand is expected to install more than 100 MW in 2011. New dynamics can also be expected for the development of wind energy utilisation from the Mount Barker and Hepburn wind farms, which represent the first community-owned wind farms in Australia and are due to start operations in 2011.

Europe

For the moment Europe remains the leading global region in terms of installed wind capacity with a total of 86 GW, but this lead is faltering. In 2010 it added 9970 MW, down from the 10,474 MW installed the previous year.

Germany, with 27,215 MW of installed capacity, saw a 1551 MW increase in 2010, down from 2009's 1880 MW total; while Spain, with a total of 20,676 MW, clocked up a 1527 MW increase in 2010, but down against 2009's 2460 MW. Yet the two remain the continent's largest markets showing modest growth rates of 5.6 percent and 8 percent, respectively.

European markets showing robust growth of around 20 percent in 2010 included Italy, France and the UK, adding 950 MW, 1086 MW, and 1112 MW, respectively. Some of the most dynamic, although small, wind markets can be found in eastern Europe, for example, Romania, Croatia, Bulgaria, Lithuania, Poland and Hungary.

Switzerland, Belgium, Turkey and Cyprus — with 82 MW in 2010, up from zero — showed promising growth rates during the year.

The Danish, German and Spanish wind turbine manufacturing industries were still playing a leading role in many wind markets around the world. However, competitors especially from Asia (China, India, and Korea as well as Japan) have been able to increase both their domestic and international market shares.

In spite of the stagnation in 2010, prospects for Europe's wind industry remain positive, considering the ambitious targets of many countries. For example, in Germany wind is expected to account for 20-25 percent of electricity generation by 2020, while Spain expects 38 GW by then, including 370 MW of small wind and 3 GW offshore.

Another important trend has begun in Germany where the repowering of older turbines is playing an increasing role. In 2010, 183 MW of capacity was replaced by more modern machines and this market is expected to grow substantially in the future.

The Americas

In 2010 Latin America stayed far below the growth it experienced in 2009, adding only 467 MW, to reach a total capacity of 1983 MW. Nonetheless, the growth rate of 30.8 percent was well above the worldwide average, although far below the 113 percent seen in the previous year. Still, the continent accounted for only 1.2 percent of globally added wind capacity.

Only six Latin American countries installed new wind turbines in 2010: Brazil (320 MW); Mexico (104.5 MW); Argentina (25.3 MW); Uruguay (10 MW); Cuba (4.5 MW); and Chile (2.6 MW).

With the exception of Brazil and Mexico, most Latin American wind markets can still be regarded as nascent. That said, major wind farms are expected to start operating in 2011 especially in Mexico (800 MW) as well as in Brazil, but also in countries such as the Dominican Republic.

In 2010, North America lost its position as the second most dynamic world region with its growth rate slumping from 39 percent in 2009 to 16 percent in 2010, mainly due a sharp drop in the US which added only 5.6 GW in 2010, down from 9.9 GW in 2009. The country's leading state, Texas, with a total capacity of 10 GW would rank number six if assessed in global terms.

By the end of 2010, 5 GW of wind farms were under construction. In 2011, various forecasts suggest a new capacity of up to 10 GW.

Canada saw a stable market and increased its capacity by 21 percent, adding 690 MW, to reach a total of 4008 MW. In Canada, several provinces (Ontario, Prince Edward Island) have introduced or are about to introduce feed-in tariffs (British Columbia, New Brunswick). It is important to note that several of these provinces have become pioneers in the support of community-based wind farms.

A critical weakness of the North American markets lies in the lack of manufacturing capacities, with a major share of the wind turbines and related equipment. There are only few domestic wind turbine manufacturers in the US as well as in Canada.

Wind's Share of Electricity Supply

The total global installed wind capacity at the end of 2010 could potentially contribute 430 TWh annually, representing 2.5 percent of total global demand.

In some countries and regions wind has become one of the largest electricity sources. For instance in terms of wind share, Denmark is the world leader with 21 percent, Portugal follows with 18 percent, Spain at 16 percent, and Germany with 9 percent. In China, wind contributed 1.2 percent to overall electricity supply, while in the US, wind's share reached about 2 percent.

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

In spite of the need to reinforce national and international policies and to accelerate the deployment of wind power, the appetite for investment in wind power is strong and there are many projects in the pipeline. Further substantial growth can especially be expected in China, India, Europe and North America.

High growth rates can also 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 and eastern Europe.

Based on the current growth rates, WWEA has revised its expectations for the future growth of the global wind capacity. In 2015, a global capacity of 600 GW is possible. By the end of year 2020, at least 1500 GW can be expected to be installed globally.