LONDON — Two recent analyses reveal that the global wind turbine market not only added significant new capacity in 2011, but also set new records. Market reports from the World Wind Energy Association (WWEA) and the Global Wind Energy Council (GWEC) essentially agree on the details: WWEA says there were 42 GW of new capacity installed in 2011 (up from 37.6 GW in 2010), while GWEC puts the new capacity figure at 41 GW (a 21 percent increase over the previous year). This brings global installed capacity to ‘more than 238 GW’ (GWEC) or ‘close to 239 GW’ (WWEA). In essence, the two reports confirm each other’s findings that, despite worldwide economic woes, the wind energy market is still experiencing strong growth.
For both groups the focus is now on emerging markets, with the reports showing market stagnation in key industrialised countries.
Despite a difficult year for the country, WWEA and GWEC agree that China consolidated its position as the global market leader in 2011. The nation installed around 18 GW of new wind turbines during the year, reaching a total capacity of 62 GW (GWEC) or 63 GW (WWEA), more than one quarter of total global wind capacity.
However, growth slowed last year due to several issues, including a trade dispute with the US that led the government to take the unprecedented decision to stop subsidising wind companies with a domestic content requirement; only those using imported components will receive subsidies.
Also, new regulations increased government oversight of the wind sector, making it more difficult to obtain approval for wind projects. And another issue is the ongoing price war among Chinese turbine manufacturers. Of those affected by this all-out battle, makers of wind turbine parts have suffered the most. Turbine prices have declined steadily in recent years due to growing pressure to cut manufacturing costs.
The second largest market for new wind turbines was, again, the U.S., which installed 6.8 GW, bringing the country’s total installed capacity to 46.9 GW (GWEC).
U.S. wind energy’s ‘long-term fundamentals are strong,’ said American Wind Energy Association (AWEA) CEO Denise Bode. But WWEA rates the country’s near term prospects as ‘not very bright’.
Budget cuts, political gridlock and strong public reaction against renewable energy subsidies, plus an upcoming election which could result in significant policy changes, have combined to create a climate of uncertainty among investors. And, after much doubt about its future, a deal to renew the imminently expiring Production Tax Credit (PTC) failed in mid-February. Projects that will be finished by end 2012 will still qualify for the credit, resulting in a projected construction boom during the year. But projects slated for completion in 2013 or later will miss out. Even if the tax credit comes up for renewal after November’s election, wind projects in the pipeline will still be delayed.
WWEA reports that India, in third place, added 2.7 GW in 2011, raising the country’s total capacity to just over 16 GW. GWEC quotes D.V. Giri, chairman of the Indian Wind Turbine Manufacturers Association, as saying that ‘India reached another milestone with adding over 3000 MW of wind power installed in 2011. This is likely to go up to 5000 MW per year by 2015. Ongoing initiatives of the Indian government to create new policies will attract large quantities of private investments to the sector.’
Germany, with 2 GW added in 2011 (WWEA), remains the EU Member State with the largest installed capacity (29.3 GW). However, there are problems on the horizon. Major utilities E.ON and RWE reported in early March that several large wind farm projects are facing major delays because the facilities for grid connection are not in place due to construction delays by Dutch grid operator TenneT, which is building power lines off the German North Sea and Baltic coasts. RWE said there is now ‘no chance’ that Germany will fulfill its goal to have 10,000 offshore wind turbines in place, generating 25 GW, by 2030.
Canada produced a strong showing, with 1.3 GW (WWEA) of new installed capacity bringing the country’s total to over 5 GW (GWEC). Much of this activity is due to Ontario’s Green Energy Act, which features FiTs and a local manufacturing requirement and has stimulated development in the province.
‘Despite the economic crisis gripping Europe, the wind industry is still installing solid levels of new capacity,’ said Justin Wilkes, policy director of the European Wind Energy Association (EWEA). Spain, France and Italy each added around 1 GW in 2011.
However, several European markets showed stagnation or even decrease. EWEA says that in 2000 the annual wind power installations of Denmark, Germany and Spain represented 85 percent of all EU wind capacity additions; in 2011, this share decreased to 34 percent.
WWEA Secretary General Stefan Gsänger said: ‘Although we can observe a recovery of the overall market, the slow-down in some of the industrialised countries, in conjunction with uncertainties about future policies, is a matter of major concern.’ Spain has recently decided to stop subsidising renewable energy projects as part of its strategy to address its debt crisis; while wind project developers in Germany and the UK fear that their industry will be the next to suffer the drastic level of cuts that both nations have recently made to their solar FiTs.
EWEA says growth in onshore installations in Germany and Sweden, and offshore in the UK — together with continuing strong performance from some emerging onshore markets in Eastern Europe – have more than offset the fall in installations in mature markets.
In emerging markets, GWEC observes a strong increase in wind power utilisation not only in China and India, but also in smaller markets such as Brazil and Mexico. GWEC quantifies Latin America’s good year at new installed capacity of 1.2 GW, led by Brazil. Adding 587 MW, the nation’s installations were up by 50 percent over 2010, bringing it to a total of just over 1.5 GW.
‘Brazil has a pipeline of more than 7 GW to be completed before the end of 2016,’ said Pedro Perrelli, executive director of the Brazilian Wind Energy Association (ABEEOLICA). ‘The Brazilian wind sector has attracted significant investment, facilitated by the policies of the Brazilian National Sustainable Development Bank (BNDES).’