EurObserv?ER: 13,3% EU wind turbine market growth between 2008 and 2009

China and the United States registered particularly steady growth and the European Union also picked up momentum to break its installation record.

The global wind power market not only repelled the strictures of the financial crisis, but according to initial estimates, saw the installation of 37 GW, which is almost 10 GW up on 2008. China and the United States registered particularly steady growth and the European Union also picked up momentum to break its installation record.

Wind power’s expansion was outstanding in 2009. First available estimates put global wind energy capacity at almost 158 GW, which means that around 37 GW of additional capacity was installed in 2009.

The Asian market led the world in 2009 with, according to the GWEC (Global Wind Energy Council), 14 639 MW installed, which raised the region’s wind power capacity to 38 909 MW. Growth in the North American market was also spectacular with the addition of 10 872 MW, bringing cumulated capacity by the end of 2009 to 38 478 MW… just ahead of the European market where 10 102 MW were installed, bringing the installed base to 76 185.2 MW.

Wind power has now gone global, as in 2009 Europe only accounted for 27.3% of the global wind power market, having been outstripped by both the Asian (39.5%) and American (29.4%) markets over the course of the year. Nonetheless Europe has almost half (48.2% in 2009) of the global installed wind power capacity, ahead of Asia (24.6%) and North America (24.4%). The world’s other regions are under-represented with just a 2.8% share.

158 gw of wind turbines installed across the world

Record installation in china

First estimates of the Chinese market, reported by the GWEC, created a sensation. The Chinese market pulled away from the other markets with 13 000 MW installed in 2009, more than doubling its 2008 installed capacity (by 109.9%) and bringing the nation’s capacity to 25 104 MW. China is thus the number three wind power force, behind the United States and only a few hundred megawatts behind Germany, relegating Spain into fourth place.

According to the Secretary-General of the Chinese Renewable Energy Industries Association, the Chinese government is taking a firm, responsible stand on curbing the CO2 emissions arising from the country’s economic expansion, for last year, it raised its 2020 goals from 30 000 to 50 000 MW. Given current growth, the Chinese association is convinced that the wind turbine base will triple by that dateline, in other words 150 000 MW installed by 2020.

Obama relaunches the US market

The United States was the number two global wind power market in 2009, installing almost 10 000 MW of capacity (9 922 MW to be precise), according to the AWEA (American Wind Energy Association) as against 8 425 MW in 2008 (>17.8% growth), which brings the US wind farm base to 35 159 MW.

Over a quarter of this capacity (9 410 MW) is installed in Texas and the AWEA claims that it is sufficient to supply 9.7 million American households and save 62 million tonnes in CO2 emissions. The 2009 market easily outstripped the American wind power industry’s early 2009 forecasts as it had forecast a 50% contraction on the 2008 market. The trend reversed during the summer when President Obama made a clear commitment to create jobs in clean energies, further abetted by the implementation of the American Recovery and Reinvestment Act, ARRA, during the summer, which awarded grants to investors. The law triggered the American market’s spectacular recovery with over 4 GW installed in the last quarter.

The biggest markets outside the European Union are India (1 271 MW installed in 2009), Canada (950 MW), Australia (406 MW) and Brazil (264 MW).

The EU adds almost 10 gw to its base

The European Union market was particularly resilient coping with the financial crisis. According to EurObserv’ER, it grew by 13.3% in 2009 with 9 739.1 MW (8 594.5 MW in 2008), which is a new record for annual installations. If we subtract the installations taken out of service, the European Union base rose to 74 800 MW by the end of 2009.

Spain and Germany confirmed their leadership of the wind power market in 2009. Most of the other mature markets such as Italy, Portugal, Sweden, Ireland and Belgium were very buoyant; however France and the United Kingdom were somewhat flat. Offshore wind power led to a Danish market revival in 2009, while another good piece of news is the rising capacity in a number of Central European markets such as Poland, Hungary, Estonia and Bulgaria. Other markets, in particular Austria, the Netherlands, Finland and six other EU member states are more or less idling.

If the per capita installed capacity is the benchmark, Denmark, Spain, Portugal, Germany and Ireland are the top five countries involved in wind power.

The 2-GW offshore threshold will soon be crossed

European Union offshore and nearshore wind power capacity is nearing the 2-GW threshold with 1 913.8 MW installed in 2009, amounting to 432.7 MW more than in 2008. Six new offshore wind farms turbines were connected in 2009 – Alpha Ventus off Germany (60 MW), Gasslingegrund off Sweden (30 MW), Horns Rev 2 (209.3 MW), Sprogo (21 MW), Hvidrove (7.2 MW) off Denmark  and Rhyl Flats (90 MW) off the United Kingdom. All the wind turbines of the Lynn and Inner Dowsing wind farms have been on stream since March 2009, bringing the final capacity of these two farms to 194.4 MW (97.2 MW each).

EurObserv’ER has not taken into account the capacity of two other farms currently being installed off the United-Kingdom –Gunfleet Sands and Robin Rigg (see further on) on the basis of the questionnaire sent by the BWEA (British Wind Energy Association).

Low wind conditions limited production over the year

The increase in electricity production was not proportional to the increase in production capacities. First estimates put wind power electricity generation at 128.5 TWh, equivalent to 8.6% growth over 2008. The low prevailing wind conditions in Germany (see further on), which in 2009 still accounted for over a third of European Union installed capacity, are partly responsible for this lacklustre increase. Another, albeit lesser factor, was the unhooking of wind power energy due to temporary grid overload. The increase in the wind power share of the electricity mix of individual countries depends on the strengthening of a number of lines and investments in new grid infrastructures. These investments – onshore or at sea – will shape the wind power sector’s growth potential for years to come.

News from the main european markets

Spain seeks to limit its market’s growth

In 2009 Spain recaptured its top European wind power market slot by installing 2 459.4 MW to bring total capacity up to 19 148.8 MW, according to the AEE (Spanish Wind Energy Association), which is 850.3 MW more than in 2008 (up 52.8%) when 1 609.1 MW was installed. However the Spanish association is steeling itself for a sharp slowdown in wind power activity in 2010 as Royal Decree 6/2009 creates a Registry of preliminary assignment. Under the terms of this new procedure, the central government must give prior approval to wind power projects if they are to benefit from the production aid system and thus removes the regional governments’ prerogative to award operating licences. The government’s aim is to cope with the influx of new projects arising from the forthcoming revision of the incentive system (which will run until 2012) as stipulated as there are already about 14 GW of projects in the pipeline. Its intention is to cap development of the Spanish wind turbine base to a further 6 GW by 2012.

German growth is back

The financial crisis has only been able to slow down the German market’s return to growth. The DEWI (German Wind Energy Institute) claims that Germany installed 1 916.8 MW of capacity in 2009 as against 1 667.1 MW in 2008 and 1 666.8 MW in 2007, equivalent to 15%. The repowering market, namely the replacement of first generation wind turbines rose to 136.2 MW.

Growth would have been even higher if it had not been for military radar issues. Almost 1 500 MW of projects (2 billion euros of investments) are currently held up waiting for military authorisations.

The German offshore market kicked off properly last year with the connection of the 60-MW Alpha Ventus farm. The wind farm, with its six Repower 5 M and six Multibrid M5000 (5 MW) wind turbines was commissioned 45 km off the coast by a consortium comprising RWE, E.ON and Vattenfall, and should be followed by many other projects, as the government gave the green light for the installation of 40 offshore wind farms in the North and Baltic Seas last September.

The aim is to connect about thirty wind farms by 2020 for total capacity of 25 000 MW. However as the wind conditions were particularly poor in 2009, the additional capacity did nothing to spur electricity production. According to the BDEW (Bundesverbad der Energie- und Wasserwirtschaft e.V.), production dropped over 3 TWh (from 40.6 TWh in 2008 to 37.5 TWh in 2009). Nonetheless wind power provides the most renewable energy in Germany with a 6.4% share of total gross electricity consumption (of a total renewable share of 16%).

The industry is quite confident that Germany has the capacity to achieve its national targets (45 000 MW by 2020). The sector’s future appears assured by the stability of the renewable energy act (EEG), which revised the wind power feed-in tariff upwards in 2009 to reflect the increase in the price of wind turbines.

Italy chalks up a new record for installations

Italian market growth is back in the black and in line with the industry’s forecast. ANEV (the Italian national Wind Energy Association) reports that in 2008 Italy installed 1 113.5 MW nudging about one hundred MW up on 2008 (1 010.4 MW). The country has thus consolidated its number three rank in Europe for installed capacity with a cumulated wind power base of 4 850 MW. The sector’s actors are satisfied with this positive result despite the tight economic context and reckon that the current pace of growth puts them on course to meet the European Union’s national goals for 2020. Their communiqué states that the steady expansion of the Italian market has resulted in a well-structured sector, the creation of jobs and given them a role in the country’s industrial and economic development. They are also lobbying the public authorities to finalise the legislative framework governing wind power (electricity infrastructure orientations and adjustment, a single licensing system, compulsory distribution of installations per region). There was one minor hiccough in that about 10% of wind power electricity production could not be utilised because of temporary grid overload issues. The grid operator (Terna) therefore identified production of 6.1 TWh for 6.7 TWh of effective production.

The French market is becoming increasingly regulated

The French wind power market had a mediocre year in 2009, contracting by 8.6% in relation to 2008. According to Ademe, French capacity (including overseas departments and communities) rose to 4 521 MW in 2009. This installation performance of 979 MW is slightly down on 2008 when 1 060 MW of additional capacity was installed. These figures, which dashed expectations, can be partly put down to the Council of State’s cancellation, in August 2008, of the decree setting the feed-in tariff conditions for wind turbine power due to formal reasons. The ministry redressed the situation when it published a new order in December 2008 reworking the substance of the terms of the initial order dated 10 July 2006.

The prospects for French market growth in 2010 are uncertain, as the government announced its intention to amend the wind turbine licensing system as of 1st January 2010, and include it within the scope of classified installations for the protection of the environment (ICPE) on the grounds that the perceived and foreseeable expansion of wind farms calls for it to set up a tougher administrative regime together with a special administrative policy.

The inclusion of wind turbines in the ICPE regime throws into the balance installations that already been granted a construction permits. The law covering the national commitment to the environment, known as the “Grenelle 2 law”, which will be submitted to Parliament at the beginning of February 2010, should define whether or not the developers of these farms will have to file their applications from scratch under the classified installations regime, leaving many new wind turbine projects on hold at local prefecture level, awaiting the make-or-break vote. The government views that the implementation of this new mechanism should stream -line wind power project applications and curb the possibilities of redress. Furthermore the State departments are fully conversant with ICPE procedures, making for faster processing of applications…

This new procedure should soon be up and running, if the schedule that has been set for multiyear electricity production investment planning (order dated 15 December 2009) is to be met. The 31 December 2012 goals of 11 500 MW (10 500 MW onshore and 1 000 MW for offshore wind farms) already seem to be compromised, which leaves the target of 25 000 MW (19 000 MW onshore and 6 000 MW for offshore wind farms), considered as the country’s real target for 31 December 2020 as viable. As for the offshore market, the feed-in tariff is too low to make wind farm construction a going concern. Therefore the Ministry of Ecology intends to issue a tender in three 2 000-MW phases. The first phase should be announced early in 2011, for farms of at least 300 MW (see Systèmes Solaires, Le Journal des Énergies Renouvelables No.195. p.78).

The British offshore challenge

According to the BWEA (British Wind Energy Association), British wind power capacity passed the 4 GW mark in 2009 with 4 050.9 MW installed including 688.2 MW offshore. If these figures are compared with those of the previous year published by the DECC (De partment of Energy and Climate Change), the additional capacity is of the order of 645 MW. However the figure for the British wind farm base could be revised upwards as the BWEA did not include in its estimates the partial connection of two offshore farms nearing completion. This is because according to a recent EWEA (European Wind Energy Association) study, 30 of the 60 turbines (i.e. 90 MW) were already operating on the Robin Rigg site and 29 of the 48 turbines (i.e. 104.4 MW) on the Gunfleet Sands site at the end of 2009. If the operating capacity of UK’s offshore capacity was around 882.8  MW at the end of 2009. The BWEA reckons that 4 598 MW of offshore projects are either under construction off the United Kingdom or approved and that offshore capacity could reasonably  rise to 20 000 MW by 2020.

Last December’s publication of the 2010 draft Finance Bill relieved offshore wind farm developers. The bill upholds the value of offshore electricity at 2 ROCs (Renewable Obligation Certificates) per megawatt-hour for accredited wind farms until 2014. The cost of a ROC in 2009 averaged at about fifty pounds and tended to drop towards the end of the year (from £51.81 on 13 January 2009 to £46.25 on 19 January 2010). The value of an offshore megawatt-hour was raised from 1.5 to 2 ROCs in the 2009 budget passed last April, for all projects that ordered turbines during financial year 2009-2010. The industry was highly enthusiastic about the Ministry’s decision to award 50 million pounds’ worth of aid to finance offshore wind turbines manufacturing and equipment testing plants. The BWEA confirms that with an active support policy, the wind power sector could account for 60 000 jobs and 30% of the United Kingdom’s electricity.

The DECC announced another new development early in February– the introduction of a specific feed-in tariff system for households and local authorities wishing to produce their own renewable electricity starting in April 2010. The electricity produced entitles the supplier to pecuniary compensation, including the own-account consumption part. The feed-in tariff for wind power modulates every year to keep pace with inflation and varies from 34.5 pence/kWh (€0.394 per kWh) for capacities below 1.5 kW to 4.5 pence/kWh (€0.051 per kWh) for capacities in the range 1.5-5 MWh.

A similar mechanism will be set up for investments in renewable energy-fuelled heating appliances as of April 2011. The idea is to enable householders and low wage earners (via council housing authorities) to reduce their energy bills (or earn additional revenue) and actively participate in achieving the country’s goals. The DECC reckons that the development of these small installations will meet 2% of the country’s electricity demand by 2020.

This barometer was prepared by Observ’ER in the scope of the “EurObserv’ER” Project which groups together Observ’ER (FR), ECN (NL), Eclareon (DE), Institute for Renewable Energy (EC BREC I.E.O, PL), Jozef Stefan Institute (SL), with the financial support of Ademe and DG Tren (“Intelligent Energy-Europe” programme), and published by Systèmes Solaires, Le Journal des Énergies Renouvelables.