More than 35 GW of wind energy capacity was added in 2013, bringing the global total above 318 GW. Following several record years, the wind power market declined nearly 10 GW compared to 2012, reflecting primarily a steep drop in the U.S. market.
The top 10 countries accounted for 85% of year-end global capacity, but there are dynamic and emerging markets in all regions.
By the end of 2013, at least 85 countries had seen commercial wind activity, while at least 71 had more than 10 MW of reported capacity by year’s end, and 24 had more than 1 GW in operation.
Annual growth rates of cumulative wind power capacity have averaged 21.4% since the end of 2008, and global capacity has increased eightfold over the past decade.
Asia remained the largest market for the sixth consecutive year, accountin
g for almost 52% of added capacity, followed by the EU (about 32%) and North America (less than 8%).
Non-OECD countries were responsible for the majority of installations, and, for the first time, Latin America had a substantial share (more than 4.5%).
China led the market, followed distantly by Germany, the United Kingdom, India, and Canada. Others in the top 10 were the United States, Brazil, Poland, Sweden, and Romania, and new markets continued to emerge in Africa, Asia, and Latin America.
The leading countries for wind power capacity per inhabitant were Denmark (863 W per person), Sweden (487.6), Spain (420.5), Portugal (412), and Ireland (381).
China added an estimated 16.1 GW of new capacity in 2013, increasing total installed capacity by 21% to 91.4 GW. About 14.1 GW was integrated into the grid, with approximately 75.5 GW in commercial operation by year’s end.
Difficulties continued in transmitting power from wind turbines (particularly in remote northeast areas) to population demand centres, and about 16 TWh lost due to curtailment.
However, new transmission lines and turbine deployment in areas with better grid access are reducing the number of idled turbines, and the rate of curtailment dropped from 17% in 2012 to 11% in 2013.
Wind generated 140.1 billion kWh in China during 2013, up 40% over 2012 and exceeding nuclear generation for the second year running.14 By year’s end, almost 25% of total capacity was in the Inner Mongolia Autonomous Region, followed by Hebei (10%), Gansu (9.1%), and Liaoning (7.3%) provinces, but wind continued its spread across China—10 provinces had more than 3 GW of capacity.
The European Union remained the top region for cumulative wind capacity, with 37% of the world’s total, although Asia was nipping at its heels with more than 36%.
Wind accounted for the largest share (32%) of new EU power capacity in 2013; more han 11 GW of wind capacity was added for a total exceeding 117 GW. Europe is experiencing a seaward shift, with the offshore market up 34%.
However, the total market in the region was down 8% relative to 2012, and financing of new projects is becoming more challenging in response to policy uncertainty and declining incentives.
Germany and the United Kingdom accounted for 46% of new EU installations, a level of concentration not seen since 2007.
Driven largely by anticipated reforms to the Renewable Energy Sources Act (EEG), Germany remained Europe’s largest market and set a new record for installations. More than 3.2 GW was added to the German grid in 2013, including more than 0.2 GW for repowering; by year’s end, a total of 34.3 GW was gridconnected (and 34.7 GW total installed).
Germany generated 53.4 TWh with the wind in 2013. The United Kingdom added 1.9 GW to the grid, 39% of which was offshore, for a year-end total of 10.5 GW.
Other top EU markets were Poland (0.9 GW), Sweden (0.7 GW), Romania (0.7 GW), and Denmark (0.7 GW).
France (0.6 GW) and Italy (0.4 GW) both saw significant market reductions in 2013.
Spain remained third in the region for cumulative capacity, but recent policy changes have brought the market to a virtual standstill, with the lowest additions (less than 0.2 GW) 16 years.
The highest growth rates were seen in Croatia (68%) and Finland (56.3%), from low bases, and Romania (36.5%) and Poland (35.8%). Slovenia added capacity for the first time.
India was the fourth largest market in 2013, although demand contracted by 26%.30 Over 1.7 GW was installed for a total approaching 20.2 GW. A steep devaluation of the rupee against the U.S. dollar (which increased financing and import costs), and removal of key support policies in 2012, delayed investment in wind power.
However, retroactive reinstatement of the Generation Based Incentive in late 2013 helped resurrect the market.
Elsewhere in the region, Japan saw a slowdown in deployment, due largely to new regulatory requirements and delays for grid access, while Thailand and Pakistan both doubled their capacity.
Canada installed a record 1.6 GW, a market increase of more than 70%, for a total of 7.8 GW, led by Ontario (2.5 GW) and Quebec (2.4 GW).
The United States ended the year with 61.6 GW, up by just over 1 GW.36 This represented a significant drop from the 13.1 GW installed in 2012, when developers rushed to complete projects before the federal Production Tax Credit (PTC) expired.
Even so, utilities and corporate purchasers signed a record number of long-term contracts in response to low power prices, and more than 12 GW of projects was under construction by year’s end.38 Texas led for total capacity (12.4 GW), followed by California (5.8 GW), Iowa (5.2 GW), Illinois (3.6 GW), and Oregon (3.2 GW).
Elsewhere, the most significant growth was seen in Latin America.
Brazil installed more than 0.9 GW of capacity (down from 1.1 GW in 2012) to rank seventh for newly installed wind capacity.
It ended the year with almost 3.5 GW of commissioned capacity—nearly three-fourths of the region’s total—of which 2.2 GW was grid-connected and in commercial operation.
Utility interest in wind power is increasing because it complements Brazil’s reliance on hydropower, and by year’s end more than 10 GW of additional capacity was under contract.
Others in the region to add wind capacity included Argentina, Chile, and Mexico.
Australia was again the only country in the Pacific to add wind capacity (0.7 GW), bringing its total to more than 3.2 GW.
In Turkey, where interest in wind power is driven partly by heavy reliance on Russian gas, 0.6 GW was installed for a total approaching 3 GW.
Africa and the Middle East saw little new operating capacity beyond Morocco (0.2 GW) and Ethiopia, which completed Africa’s largest individual wind farm (120 MW), with the aim of mitigating the impact of dry seasons on national hydropower output.
However, other countries in the region moved ahead with new projects, and several announced longterm plans.
Offshore wind energy is still small compared with global onshore capacity, but it is growing rapidly. A record 1.6 GW was added to the world’s grids for a total exceeding 7 GW in 14 countries by year’s end.
More than 93% of total capacity was located off Europe, which added 1,567 MW to the grid for a total of 6,562 MW in 11 countries.
The United Kingdom has more than 52% of the world’s offshore capacity. It was the largest market (adding 733 MW) in 2013, followed in Europe by Denmark (350 MW), Germany (595 MW total, and 240 MW gridconnected), and Belgium (192 MW).
But the EU record hides delays due to policy uncertainty, particularly in Germany and the United Kingdom, and cancellation or downsizing of projects due to cost and wildlife concerns.
The remaining offshore capacity is in China, Japan, and South Korea; China added 39 MW for almost 430 MW total.
Two U.S. projects qualified for the PTC before it expired and are competing to be the first commercial project operating off U.S. shores.
Offshore and on, independent power producers and energy utilities remained the most important clients in the market in terms of capacity installed. However, there is growing interest in other sectors. The number of large corporate purchasers of wind power and turbines continued to increase during 2013.
In addition, interest in community-owned wind power projects is rowing in Australia, Canada, Japan, the United States, parts of Europe, and elsewhere.
Community and co-operative power has long represented the mainstream ownership model in Denmark and Germany.
Today, shared ownership is expanding through a variety of means, including innovative financing mechanisms such as crowd funding.
The use of individual small-scale wind turbines is increasing, with applications including defence, rural electrification, water pumping, battery charging, telecommunications, and other remote uses.
Off-grid and mini-grid applications prevail in developing countries. Worldwide, at least 806,000 small-scale wind turbines were operating at the end of 2012, exceeding 678 MW (up 18% over 2011).60 While most countries have some small scale wind turbines in use, capacity is predominantly in China and the United States, with an estimated 274 MW and 216 MW, respectively, by the end of 2012.
They are followed by the United Kingdom, which added a record 38 MW in 2012, driven by a micro-generator FIT, to exceed 100 MW total.
Other leaders include Germany, Ukraine, Canada, Italy, Poland, and Spain.
Repowering of existing wind capacity has also expanded in recent years. The replacement of old turbines with fewer, larger, taller, and more efficient and reliable machines is driven by technology improvements and the desire to increase output while improving grid compliance and reducing noise and bird mortality.
Repowering began in Denmark and Germany, due to a combination of incentives and a large number of ageing wind turbines, and has spread to several other countries.
During 2013, turbines were repowered in Denmark, Finland, and Japan, and in Germany, which replaced 373 wind turbines with combined capacity of 236 MW with 256 turbines totalling 726 MW.
There is also a thriving international market in used wind turbines in several developing and emerging economies.
Wind power is playing a major role in power supply in an increasing number of countries. In the EU, capacity operating at year’s end was enough to cover nearly 8% of electricity consumption in a normal wind year (up from 7% in 2012), and several EU countries met higher shares of their demand with wind.68 Wind was the top power source in Spain (20.9%, up from 16.3%) during 2013, and met 33.2% of electricity demand in Denmark (up from 30%).
Four German states had enough wind capacity at year’s end to meet over 50% of their electricity needs.70 In the United States, wind power represented 4.1% of total electricity generation (up from 3.5% in 2012) and met more than 12% of demand in nine states (up from 10% in nine states in 2012), with Iowa at over 27% (up from 25%) and South Dakota at 26% (up from 24%).
Wind power accounted for 2.6% of China’s electricity generation.
Globally, wind power capacity by the end of 2013 was enough to meet an estimated 2.9% of total electricity consumption.
WIND ENERGY INDUSTRY
Over the past few years, capital costs of wind power have declined, primarily through competition, while technological advances—including taller towers, longer blades, and smaller generators in low wind speed areas—have increased capacity factors.
These developments have lowered the costs of wind generated electricity, improving its cost competitiveness relative to fossil fuels.
Onshore wind-generated power is now cost competitive, or nearly so, on a per kWh basis with new coal- or gas-fired plants, even without compensatory support schemes, in several markets (including Australia, Brazil, Chile, Mexico, New Zealand, South Africa, Turkey, much of the EU, and some locations in India and the United States).
By one estimate, global levelised costs per MWh of onshore wind fell about 15% between 2009 and early 2014; offshore wind costs rose, however, due to increasing depths and distance from shore.
Despite these largely positive trends, during 2013 the industrycontinued to be challenged by downward pressure on prices, increased competition among turbine manufacturers, competition with low-cost gas in some markets, reductions in policy support driven by economic austerity, and declines in key markets.
In Europe, market contraction led to industry consolidation, with manufacturers Bard and Fuhrländer (both Germany) filing for insolvency in late 2013, and Vestas (Denmark) cutting its staff by 30%.
European WIND turbine makers also experienced a decline in market share within China, where domestic suppliers constituted over 93% of the market in 2013, up from 28% just six years earlier.
The United States experienced factory closures and layoffs due to a shortage of new turbine orders; by year’s end, however, U.S. production capacity had ramped up dramatically, with wind-related manufacturing in 44 of 50 states.
In India, Suzlon, which has struggled for years with massive debt, ceded its top position for the first time in a decade.
Grid-related challenges are increasing and range from lack of transmission infrastructure, to delays in grid connection, to rerouting of electricity through neighbouring countries, to curtailment where regulations and current management systems make it difficult to integrate large amounts of wind and other variable renewables.
In addition, there is a shortage of skilled personnel in new markets that are experiencing rapid growth, particularly in Africa and Latin America, and in some more mature markets where significant policy uncertainty makes it difficult to keep trained staff in the sector.
Most of the world’s turbine manufacturers are in China, Denmark, Germany, India, Spain, the United States, and Japan, and components are supplied from many countries.
An increasing number of manufacturers are in Brazil, with France and South Korea also emerging as producers of wind technology.
The world’s top 10 turbine manufacturers captured nearly 70% of the market in 2013 (down from 77% in 2012).
Vestas (Denmark) regained the top spot from GE Wind (United States), which suffered from the poor U.S. market and fell to fifth.
Goldwind (China) climbed four steps to second, followed by Enercon and Siemens (both Germany), which switched spots.Other top manufacturers were Gamesa (Spain), Suzlon Group (India), United Power and Mingyang (both China), and Nordex (Germany).
To deal with challenges and to maintain profitability, turbine manufacturers are revamping their supply chains with techniques such as component commonality and just-in-time stocking.
While many still make most of the critical parts, there is a trend towards outsourcing and flexible manufacturing.
Some companies focus increasingly on project operation and maintenance, which provides steady business even when sales are down, and can increase value in an increasingly competitive market.
Others are joining forces: Mitsubishi (Japan) and Vestas, and Areva (French nuclear supplier) and Gamesa, announced joint ventures for offshore turbine development.
Most are now vertically integrated, with very few companies left that are purely wind turbine manufacturers.
Local sourcing is increasing in response to local-content rules as well as the potential for cheaper finance, shorter lead times, insulation from exchange rate changes and customs duties, and reduced costs and logistical issues associated with shipping of big, heavy turbines and parts.
To reduce transport costs, Vestas and shipper SNCF Geodis (France) in Europe, and Siemens in the United States, have begun moving blades by rail, although the practice is still in an early phase.
Turbine designs continue to evolve to reduce costs and increase yield, with trends towards larger machines (higher hub height, longer blades, greater nameplate capacity), developments to reduce operations and maintenance costs, and shifts in technologies and strategies to improve the economics of wind power in a wider range of wind regimes and operating conditions.
Progress in recent years has boosted energy yields, particularly in low-wind sites. In 2013, GE launched services packages to improve the power output of individual turbines and wind farms, and introduced a 2.5 MW turbine that incorporates energy storage capability.97 The share of gearless, or direct-drive, turbines increased again (from 12% in 2008 to 28% in 2013), and the move continued towards tailor-made turbine designs for offshore use.
The average size of turbines delivered to market in 2013 was 1.9 MW, up from 1.8 MW in 2012. Average turbine sizes were 2.7 MW in Germany, 1.8 MW in the United States, 1.7 MW in China, and 1.3 MW in India.
The largest commercially available wind turbine (Enercon’s E-126, up to 7.6 MW), is used in the onshore sector.
The average size installed offshore in Europe remained at about 4 MW. New machines in the 5–8 MW range are being tested for offshore use in Europe and Asia, while leading Chinese manufacturers are competing to develop turbines of 10 MW and larger, spurred on by government grants.
In addition to bigger wind turbines, the offshore industry is seeing larger projects, and moving farther out, into deeper waters.
To date, deep-water offshore wind has focussed on foundations adapted from the oil and gas industry, but new designs are under development around the world.
In 2013, Japan floated two 2 MW machines, with plans to commercialise the technology as soon as possible, and the United Kingdom launched a leasing round for floating offshore wind.106 Japan and others aim to drive down costs and hope offshore wind will revitalise old ports and related industries.
New, larger and more-sophisticated vessels are being developed to deploy turbines in deeper waters and under harsher weather conditions, with British, Chinese, German, and South Korean shipbuilders expanding into the industry.
Larger vessels are also required to transport longer and larger subsea cables to higher-capacity, more distant offshore projects.
These trends have pushed up prices in recent years. As of early 2014, the levelised cost of offshore wind power was nearly USD 240/MWh (EUR 172/MWh), but the potential for lowering costs through reductions in lifecycle financial costs is considered significant.
The small-scale (<100 kW) wind industry also continued to mature in 2013, with hundreds of manufacturers worldwide, expanding dealer networks, and increasing importance of turbine certification.
Most manufacturers and service providers are concentrated in China, North America, and Europe.
About three-quarters of the world’s manufacturers produce horizontal axis machines, with others focussing on vertical or both types; most vertical-axis.