London, UK [Renewable Energy World Magazine] New figures show wind installation continues to break records both in the US and Europe. Is this growth sustainable? If yes, what will continue to drive wind forward? If not, or not at its current rate, which factors might slow the industry’s progress?
Roland Chalons-Browne, CEO, Siemens Financial Services
Wind energy is set to maintain its momentum in the wake of growing interest in developing and harnessing alternatives to traditional fossil fuels. As the most widely deployed and commercially used renewable energy source, wind energy offers a large potential with opportunities across the world.
Putting its might behind the sector is China, fast emerging as a supplier of wind energy as well as a key manufacturing base for ancillaries.
The country is expected to take the second spot after the US in terms of total wind power capacity this year. In fact, while the US is expected to witness a decline in financing due to the economic turmoil, Asia is slated to witness the fastest growth in installed wind capacity, to reach 25.5 GW by 2013.
Wind energy continues to gain traction in Europe where it represents 35% of all new energy installations and offers returns on investments between 8%–11%.
Italy, France and the United Kingdom have emerged as new players poised to capitalize on the opportunity in this region.
However, the potential to tap wind energy is still constrained by a few hurdles.
The high costs associated with wind energy – wind farms are not only capital intensive but also have a long gestation period – could prove to be prohibitive for many potential investors.
Volatile commodity prices and the growing trend of wind projects moving farther offshore have compounded these challenges.
More than ever, it takes a reliable financing partner who combines financial and industrial expertise to successfully support sustainable energy projects.
In terms of global policy, governments need to boost investments in onshore and offshore wind generation through the right mix of supportive policies and incentives.
This will help to bring down the high entry costs as well as operating expenses that apply to wind projects.
David Still, managing director, Clipper Windpower Marine Limited
The world needs energy. It is running out of conventional forms and renewable energy is now a real solution, and mandated in many parts of the world.
Fast forward to 2100 and the energy mix will be unrecognizable. We will have changed the habits of the last two centuries in the developed world and growth in less developed countries will need to have followed a route of energy efficiency, smart grids and connections, and an increasing reliance on renewable energy.
There is an ever-increasing requirement for electricity from renewables. The next 20 years will need a focus on providing a grid capable of delivering that electricity, and increasing use of storage to meet the demands of integrating variable energy sources. Wind energy will be a major contributor for the foreseeable future, and the emergence in Europe of offshore wind as a major market will maintain significant growth.
But there are challenges. These include; the financing of projects; the grid in the right place, at the right time and at the right cost; and the need for a strong drive by governments to continue with positive policies to ensure deployment is not delayed.
All of this will maintain a strong market for wind and ensure continued progress.
There is a bright future for wind as part of an energy solution which will start the process of creating a more sustainable world for future generations.#rewpage#
Christian Kjaer, CEO, European Wind Energy Association
The growth in wind power capacity has shown no signs of slowing, even in these tough economic times. For two years running there has been more new wind power capacity installed than any other power generating technology in Europe – including coal, gas and nuclear. In 2009 the European market for wind turbines experienced a 23% growth rate, the same as the average growth rate over the last 15 years.
2010 will be a very challenging year and I would be surprised if the market grew at the same rate globally and in Europe as we have seen in the past year.
Both in Europe and in the US, some 40% of all new power generating capacity installed in the past two years was wind energy. If the economic crisis continues, however, the reduction in power demand will start to impact wind energy, simply because of lower demand for new power plants. Nevertheless, the medium and long-term outlook remains very healthy, as political momentum is building towards a low carbon economy, without which humankind will not overcome three of the biggest concerns of our time – climate protection, energy security and the provision of jobs.
Wind power’s credentials as a rapidly deployable clean technology have put it at the forefront in the fight against climate change. Neither new nuclear capacity or carbon capture and storage (CCS) will contribute to CO2 reductions within the timeframe that the climate scientists give us. As a no-fuel, no-carbon emissions source of electricity, wind energy will play a big part in reducing carbon emissions before 2020.
Currently, the EU imports a massive 54% of its energy needs. It is predicted this will rise to 70% by 2030 unless we change course. A key element for policy makers is to dramatically improve competition in power markets, to ensure that investors, rather than consumers, are exposed to future carbon and fuel price risk. If we achieve this, wind energy will become even more attractive as it serves as an insurance against future increases in fuel and carbon prices, while reducing our dependency on fossil fuels imported from volatile regions.
Wind power is a leader now, and will remain so in the future, attracting big investments and creating jobs. There is a boom waiting to happen in offshore wind energy. But, Europe’s ageing electricity grids must be upgraded and extended, and the EU must also pursue a drive to build an offshore grid in the North and Baltic seas that will connect offshore wind farms to the shore, piping vast amounts of CO2-free energy to consumers at affordable prices.
Stephan Ritter, general manager for Renewable Energy, Europe, GE energy
As the world’s desire for cleaner energy continues to build, we are confident that wind energy has the potential to maintain and even exceed the dynamic growth rate of the past several years. This growth will be tied to the fact that wind is the most cost effective and scalable renewable source of energy. Because of the small size of the existing installed base, the offshore wind sector will see higher growth percentages while the number of onshore turbines will continue to outpace those installed offshore.
Strong, supportive policy and government support is key. It remains important for governments worldwide to establish policy frameworks that will provide the market stability required to maintain long-term growth.
The EU’s 20-20-20 directive is a good example of policy that is driving action. But, implementation of these targets is different in every European country. Countries with the most attractive support schemes will see the most installations.
Continued investment in grid infrastructure is critical for growth as well as wind turbine technology investments that improve efficiency and reliability while driving down emissions. Countries with the most efficient and flexible permitting processes will benefit by realizing the installation of the most advanced technology.
No single solution will meet the world’s growing energy demands, but renewable sources, and in large part, wind energy, have an extremely important role to play.#rewpage#
Torben Andersen, executive director and CEO, Onshore, Mainstream Renewable Power
It is no great surprise to people in the industry to see this growth. A fundamental value of wind is that it lowers risk in the overall generation mix by bringing in a fixed electricity cost. You don’t have any fuel risk, so you don’t have these big price spikes that you see when you generate electricity from gas or oil.
In countries such as Denmark and Germany, overall prices have been lowered because the risk in the system has gone down. That means wind is beneficial to generators, utilities and whole countries, and that will continue to help its development.
There are different factors that will affect development of wind in Europe and the US. In Europe, it’s driven by the green agenda and security of supply. Europe needs local energy resources and wind is being heavily backed, especially offshore wind.
In the US, a lot of companies would look towards a Federal Renewable Portfolio Standard, setting prices for Renewable Energy Certificates across all states. Implementing the Federal Portfolio Standard in the US is especially important as power prices are very low, hindering wind development at present. In fact, strong policy measures to support wind can make a huge impact around the world, and we’ve seen major activity in places such as Ontario.
Implementing clever grid technology is key to the continuing growth of wind energy, but if it doesn’t happen it becomes a limiting factor.
At Mainstream we’ve spent a lot of time promoting the Supergrid, an offshore grid that links with the onshore system. I believe that in Europe the security of supply situation will push the grid agenda. In the US, there have been discussions about federal transmission planning but personally I’m not sure it will happen. However, if you could even get six or seven states to work together that would achieve a great deal. For example the PJM market straddles different states so that sort of collaboration across established power markets is, to a certain extent, already there.
Other opportunities include re-powering with newer turbines. In continental Europe you have a lot of smaller machines from 100 to 300 kW. If you can put in three or four 5 MW or 6 MW machines, that increases the energy you can get out of a site.
We are not going to see big jumps to 10 MW or even 20 MW turbines in the near future, except possibly for some offshore machines. In many ways the jumps shouldn’t be too big. The main thing is having turbines that are well proven and reliable.
Ralf Peters, head of corporate communication, Nordex
The wind power market is still intact. Demand for ‘green’ power stations remains unabated and nearly all governments have adopted policies aimed at environmental sustainability.
Wind power is by far one of the fastest growing segments in the power generation industry. Last year new construction rose by around 16% in the US and 8% in Europe. As our industry is still very young, wind power currently contributes only around 1.5% to global electricity supplies.
However, this merely serves to highlight the enormous potential for the future, especially as wind power is not only clean but also inexpensive. This is something that more and more governments and energy companies are realizing.
On the other hand, demand for wind turbines is also being spurred by high fossil fuel energy prices, despite the current dip in fossil fuel prices associated with the financial crisis.
Taking all this into account, we expect to see higher growth rates in Europe for 2010, and from 2011 onwards also in the US. With our production facility in Jonesboro, Arkansas, staring production in the course of this year we are very well prepared to harness advantages from the expected economic upswing in the US in 2011.