Wind energy in 2020 and beyond

Almost exactly a year ago, the renewable energy industry was busy celebrating. On 9 December 2008 the EU agreed the Renewable Energy Directive, the most far-reaching piece of renewables legislation worldwide. The target it set of 20% renewables in the European energy mix by 2020 was hailed by many as historic.

Such memories are still fresh and it may seem that there is still a while to go before 2020. National governments are not even due to publish the National Renewable Energy Action Plans setting out the steps they will take to meet the targets until June 2010. But time is moving fast and in 11 years’ time Europe will – hopefully – have met or surpassed its targets and be looking into the time beyond.

The wind power is not going to die out in 2020, or ever for that matter. The 230 GW of capacity EWEA believes will be installed in the EU by 2020, providing 14-18% of our electricity, will be added to in the years afterwards. The European Environment Agency states that the economically competitive potential of wind energy in 2020 will be three times greater than expected electricity demand, and in 2030 seven times greater than expected electricity demand.

“The wind could provide over 26% of Europe’s power in 2030, according to EWEA’s latest baseline development scenario just published in our updated ‘Pure Power’ report, which says we should have 400 GW of installed wind energy capacity by then”, said Christian Kjaer, EWEA’s Chief Executive. “This would avoid 600 million tonnes of CO2 and €56 billion of fuel costs. If we meet our high scenario wind will provide over 30% of our power. Yet where we are in 2030 will depend on certain things that have to happen between now and 2020 to set us on the right track.”

The 2009 Renewable Energy Directive needs to be effectively implemented, with the member states producing realistic National Renewable Energy Action Plans next June and starting putting them into practice without delay. An offshore grid – based on EWEA’s 20 Year Network Development Plan, which it launched in September – must be built to transport offshore wind power to consumers. This should be accompanied by improved competition in the internal energy market. The improvement in competition will be brought about through the proposed new grid infrastructure, since it will join up the different countries and allow electricity to be traded across Europe. It will also come about through changes in system operation and the development of effective electricity markets throughout the EU, including markets for balancing power and ‘smart grids’. Such changes would bring Europe affordable and indigenous electricity that reduces citizens’ and companies’ exposure to supply disruptions, carbon and fuel price risk.

Furthermore, R&D funding must be made fairer to ensure wind energy technology develops as it should – up until 2002 only 1% of EU energy research funds were allocated to wind energy. And a real price needs to be put on pollution, following the EU’s “polluter pays” principle. It may seem like a long list of “ifs”, but there are already positive signs.

A blueprint for a North Sea offshore grid is being drafted by the European Commission, and if the Commission takes EWEA’s proposed Network Development Plan into account in its work, it will be a very good start. On the R&D side, the Commission in October proposed €6 billion of research funding for the wind energy sector. And 100% auctioning in the power sector will be part of the ETS from 2013.

If wind energy develops as expected in the next ten years, the sector will look somewhat different. We could be seeing a completed offshore grid, which would have a revolutionary effect on wind energy growth and power prices for consumers. We could see a planet saved from its own carbon-choked fate in the nick of time by a far-reaching UN agreement in Copenhagen this December, revitalised by the slashing of GHG emissions in large part thanks to renewables. We could even be seeing some floating, two-bladed, gearless, downwind, 20 MW wind turbines.

What is certain above all is that wind energy, which has already become a mainstream power technology – more wind capacity was installed than any other type in the EU in 2008 – will continue to grow up to and beyond 2020. It will continue to provide clean, affordable, home-grown power for Europe. It will give cause for celebration time and time again.

Wind in the world –global projections beyond 2020

Over 20 times as much wind power capacity could be operating around the world by 2030, according to the latest projections from expert analysts. This would be enough to meet 17% of the world’s electricity supply, more than nuclear achieves today. These expectations – for a total of almost 2,500 GW of operating wind capacity within the next two decades – reflect the strength of positive factors pushing the industry forward to a continuing sequence of record years.

This latest analysis by BTM Consult, the Danish consultancy, projects an average growth rate of 12% between 2014 and 2030, even with a ‘business as usual’ scenario. The outcome is similar to that envisaged by the Global Wind Energy Council (GWEC). In an ‘advanced’ scenario produced together with Greenpeace in 2008, GWEC projected a total of 2,375 GW by 2030. This would cover up to 24% of global electricity demand, the analysis assumed, if serious energy efficiency measures were also introduced.

These fi gures are justifi ed by the growth rates witnessed over the past fi ve years – an average 25% annual increase from 2003 to 2008 – and by the regulatory regimes established in Europe and around the world. The European Union’s 2020 targets for reducing carbon emissions and increasing renewable energy are central to this.

Most analysts expect a radical change in the balance between the different regions of the world over the next 20 years. Whereas Europe has led up to now, and will continue to grow, its dominance will be challenged by massive expansion in both the American continent and Asia.

The United States has already experienced a period of dramatic growth, with individual wind farms now pushing up towards 1,000 MW. This trend is expected to continue. The driver will continue to be the Production Tax Credit bonus, potentially followed soon by a federal Retail Portfolio Standard – a national obligation on electricity suppliers to meet a rising percentage of their demand from renewables. This could be linked to the Department of Energy’s assertion that wind power could provide 20% of US electricity by 2030.

In the Asian continent, China is being driven by a central government determined to achieve its aim of reducing its 80% dependence on polluting coal. The current target is for 100 GW by 2030, but independent observers expect up to 135 GW or more by then. So dynamic has been the development of a domestic industry capable of manufacturing complete turbines and other parts that there is currently concern that the market may be over-heating. China’s plans include seven ‘wind power hubs’, each with a capacity of up to 10 GW. To encourage a more secure financial return, the government also recently introduced a version of the European feed-in tariff, with a list of fixed prices variable according to the wind park’s location.

These factors mean that by 2030, according to BTM Consult, the Americas will contain 30% of the world’s wind power, Asia and the Pacifi c region about 35%, and Europe about 20%. Today Europe accounts for over half of cumulative capacity.

Although agreeing broadly on the shifting global breakdown, some analysts are not nearly as positive as BTM Consult. International consultancy Emerging Energy Research, for example, expects less than 700 GW of wind capacity to be operating globally by 2020, the furthest ahead that its projections go. This compares with BTM’s 975 GW and GWEC’s 1,080 GW.

So why is EER more cautious? “Mainly because wind is competing with other technologies,” says analyst Eduard Sala de Vedruna. “We are going to have cheap natural gas available again and nuclear is reviving all over the world, including in Germany, the UK and France. Then you have CCS (Carbon Capture and Storage) technology, which will have an impact on the most polluting sources. All these can be an inhibitor to the global plans for wind.”

Although Sala de Vedruna points out that the economics of wind power are steadily improving, with falling capital costs and better reliability, the recession is fading and the supply chain bottlenecks are fast disappearing, he also sounds a note of caution about the issue of transmission. “How is this capacity going to be connected to the network?” he asks, “especially in emerging markets and offshore. In some countries production is very far from the centres of consumption. So there will have to be an improvement globally to make the wind potential realisable.”

One feature of recent years, however, has been the emergence of new markets to push the global market forward faster than expected. Just one current example is Australia, whose vast potential could finally be unleashed by the government’s recent commitment to 20% renewable power by 2020. For those sceptical that wind can achieve the large figures expected by BTM and others there is one further point worth remembering – that historically the technology has consistently performed better than even the industry’s own trade associations have predicted.