Adam Barber, Publisher, A Word About Wind

Whisper it, but the bad news for many is that growth in European onshore wind will be limited for many years to come.

As fiscal consolidation continues and, perversely, as the cheapest form of wind energy production is hit hardest by falling subsidies, the prospect of further European expansion looks bleak.

However, look below the surface and as Eastern European countries begin to seek greater EU integration, policy for 2020 targets will drive the market forwards.

The recent expansion at the Fantanele-Cogealac Wind Farm in Romania is a case in point. Right now the site has connected over 216 turbines to the grid and is generating regular power and returns.It's a similar story for some of the savviest of developers and operators currently working throughout Poland and Turkey too, although in all instances, regulatory and legal obstacles remain.

Nevertheless, as Eastern European markets express an increasing desire to turn their backs on the rising price of Russian gas and decreasing investment in increasingly expensive coal-fired power, for these determined countries wind remains a compelling proposition.

Here, the markets have learnt and adapted to new technologies relatively quickly and have developed a series of strong relationships with key developers and manufacturers which have in turn provided additional manufacturing resources. New technology is being tried and tested and for the likes of GE operating in Romania, Eastern Europe has for a long time been viewed as an important diversification away from its established US base.

Because of this, over the next 12 to 24 months Eastern Europe should continue to see some gentle upward momentum.

Subsidies will remain relatively small, site quality and ease of connectivity will vary greatly and the administrative challenge and local political headaches will never totally disappear. However, for European onshore wind, Poland, Romania and Turkey continue to offer the best chance of growth.

Pierre Tardieu, Regulatory Affairs Advisor, European Wind Energy Association

10.5 GW was the all-time European record for annual installations, achieved in 2009. Since then, due to the economic slowdown and government austerity, Europe has had slightly lower growth of 9.6 GW in 2010 and 2011. Indications are that 2012 will be similar to the last two years - around 10 GW. But 2013 is another matter and could be tougher.

Two key trends are clear for many national markets. First, a growing north/south split in western Europe, with recession and austerity slowing down many 'traditional' southern European markets including pioneers Spain and Portugal; and second, continued growth in some emerging markets such as Romania, but a risk of paralysis in other previously growing markets such as Bulgaria.

Crisis-hit Spain's reduction in electricity consumption is likely to continue, resulting in less capacity investment, as well as caps on new wind capacity and the new electricity tax. The Spanish market may not pick up for a number of years. The same is true of Portugal.

Italy, due to the crisis but also the instability of its regulatory framework over the past years, is likely to suffer a slowdown in 2013. Project roll-out in 2010, 2011 and 2012 is mainly from projects given permission several years ago. Few new permits have been awarded since, and this will start to hit installations in 2013.

Greece's wind energy industry did not feel the brunt of the crisis in 2011, but it could still come this year or next.

France too is facing a slowdown, due more to regulatory uncertainty over the feed-in tariff and over-complex permitting rules than to any financial crisis. Things could pick up in the coming years with the administrative simplification and reduction in nuclear promised by the Hollande government.

Northern Europe is much less badly hit by the crisis. The German energy transformation, driven by the decision to abandon nuclear, requires, and is delivering, onshore growth.

Some Nordic markets like Sweden and Finland are also showing solid growth to achieve their 2020 targets, as is the UK, despite investor uncertainty over energy market reform. Denmark will also have to achieve considerable growth if it is to meet its recently announced target of 50% wind by 2020. Ireland, one of the markets with the greatest wind penetration, should be buoyed by the inauguration of a 500 MW inter-connector with the UK and recent clearing of its new support scheme by the European Commission.

In emerging markets, there is a second divide opening up between likely continued growth in some markets and a failure to live up to early promise in others. One previously promising country, Bulgaria, has changed its support scheme and grid connection requirements to slow down wind energy development. Without policy changes, this market could be stopped for quite some time, while Romania, an emerging pioneer, seems to be heading for a record year in 2012.