By the end of 2011 global installed wind turbines capacity should stand at around 238.5 GW, and much of the world’s growth is being driven by capacity build-up in the emerging markets. In contrast some of the key wind energy markets may be showing fault lines.
First estimates put global installed wind farm capacity at about 238.5 GW in 2011, which equates to the installation of almost 41 GW minus 441.2 MW of capacity taken out of service.
In 2011 Asia was the world’s biggest wind turbines market (52%) ahead of Europe (24.5%) and North America (19.7%). Europe still has the largest wind power capacity in the world with 40.6% of total in 2011. However it now attracts less than a quarter of the newly installed capacity and could be overtaken by Asia in 2012.
A 41-GW global market in 2011
The Chinese wind power market undergoes restructuring China is the world’s biggest wind power market, but wind turbines installations levelled off for the first time in 2011. The GWEC (Global Wind Energy Council) says that the country only installed 18 000 MW in 2011, down from almost 19 000 MW in 2010. CREIA, China’s Renewable Energy Industries Association says that the Chinese authorities are seeking to improve control over the growth of their domestic renewable energy market.
The government has set an annual installation target of 15 GW, to achieve 200 GW of wind turbine capacity by 2020 capable of generating 400 TWh. To arrive at this figure in an orderly manner the government has implemented a whole raft of new regulations, including one that divests China’s provinces of their independence to decide on the siting of <50-MW wind farms.
Henceforth wind farm projects will require government approval to be granted in consultation with the grid operator. New technical standards have also been imposed to facilitate grid integration of wind turbines. The grid operator “State-Grid” declared that from 1st January 2011 onwards, all new wind turbines would be fitted with systems to supply low voltage ride-through (LVRT) capability, to reduce the number of wind turbine disconnections resulting from voltage drops during the summer.
Some Chinese operators feel that the market is entering a critical growth crisis as supply now heavily exceeds demand. China puts this excess market capacity at about 300%, which is making market players vulnerable. The country’s biggest banks are increasingly lukewarm about granting loans for wind energy projects, and this state of affairs is creating delays and stunting market growth, compounded by tighter monetary policy that aims to check inflation and thus restricting available funding.
The American market takes off again
After a particularly sluggish year in 2010, growth is picking up in the North American market. According to an AWEA (American Wind Energy Association) report, the US connected 6 810 MW to the grid in 2011 (5 116 MW in 2010), which brings its wind power capacity to 46 919 MW. The prospects for growth in 2012 are good, borne out by ongoing construction work on 8 300 MW at the beginning of January.
However, the sector’s long-term development is in the balance for lack of agreement on the continuation of the current incentive system, which consists of a Production Tax Credit of 2.2¢ per kWh for wind-generated electricity. This Energy Policy Act-inspired incentive, which dates back to 1992, is scheduled to terminate in 2012. An alternative system has been in place since 2009, enabling wind energy project developers to choose a 30% Investment Tax Credit instead. The provision applies to projects whose construction started before the end of 2011 provided they are commissioned before 2013 and entitles project developers to a US Treasury grant equivalent to 30% of the investment sum.