China Will Overtake US as World’s Leading Wind Power Producer by 2016

Pranav Srivastava, GlobalData’s Analyst covering Power, says: “During his State of the Union Address in January 2015, US President Barack Obama spoke of the country’s achievements in the energy sector and claimed that the domestic wind industry is number one in the world. While it is true that the US generates the largest amount of wind energy compared to any other nation, it should also be noted that China has the world’s largest wind power installed capacity, with plans to grow further and surpass US wind power generation by 2016.

 

“China produced about 169 Terawatt hours (TWh) of electricity in 2014 while the US was slightly over 175 TWh. Despite China having a larger wind installed capacity, its comparatively lower levels of wind power generation can be attributed to slower wind speeds and the country’s inadequate grid infrastructure covering the rapid increase in the number of wind turbines in remote areas.

“For a fairer assessment, we can use installed capacity to estimate the extensiveness of wind power development in a country. China’s cumulative wind power installed capacity increased from 402 Megawatts (MW) in 2001 to 110 Gigawatts (GW) in 2014, at a Compound Annual Growth Rate (CAGR) of 50.5%. In terms of cumulative installed capacity in 2014, China is clearly ahead, as US capacity currently stands at approximately 66 GW.

“Furthermore, in terms of annual installations, the Chinese wind industry has proven to be more stable than the US, as the latter’s annual installations rely heavily upon government incentives, which are often under speculation. China added about 18 GW of new installed wind capacity in 2014, whereas the US only added around 4.9 GW, according to GlobalData.

“In 2013, the US wind industry witnessed a 92% drop in annual installed capacity and around 30,000 job losses due to the expiration of the Production Tax Credit. Although this incentive, which was renewed early in December 2014, sought to benefit wind power generators, it did not have any worthwhile positive impact on the industry in practicality, as it gave investors very little time to meet its eligibility requirements. As such, the US wind sector may not be in as healthy a condition as President Obama recently claimed.”