14 November 2012

Wind farm in Germany. ©Martin Goltermann/GWEC

Wind power growth to slow, pick up after 2020

Global installed wind capacity reached 240 gigawatts at the end of 2011. Its growth is likely to slow over the next few years, hit by cutbacks in the budget subsidies and struggling world economy, according to a report from GWEC and Greenpeace, writes Reuters. However, the capacity could still triple by 2020 reaching 759 gigawatts - supplying up to 12 percent of global electricity - and continue to increase during the 2020s to reach 1,600 gigawatts by 2030.

The growth of wind power generation is likely to slow over the next few years, hit by cutbacks in the budget subsidies in the United States and Europe that have driven 15 years of construction, the Global Wind Energy Outlook published on Wednesday showed.

Held back by a struggling world economy and the failure to create commercial conditions which stimulate more green investment, the report by the Global Wind Energy Council (GWEC) and Greenpeace International expected growth of wind power would not accelerate again until after 2020.

Global installed wind capacity reached 240 GW at the end of 2011, it said, but 2013 looks like a difficult year for the sector amid a rocky environment for global financing.

"Absent a new means for putting a global price on carbon, new demand growth in the OECD borne on a strong economic recovery, or some other unforeseen development, the industry's rate of growth will slow substantially in the coming few years," the report said.

However, cumulative installed capacity could still reach 759 GW by 2020 - supplying up to 12 percent of global electricity - and continue to increase during the 2020s to reach 1,600 GW by 2030, the report said.

If current market uncertainties are overcome in the near future, capacity could even top 1,150 GW by 2020 and 2,500 GW by 2030.

China growth to slow until after 2015

China, the world's largest wind market, had total installed capacity of over 62 GW last year. Growth will likely slow until after 2015, though it will still be the market leader.

"The phenomenal growth in the Chinese wind energy market has outstripped the ability of the grid and system operators to manage it," the report said, adding that over 10 billion kilowatt hours of wind power were lost last year because the grid had no capacity to absorb it.

The International Energy Agency (IEA) has estimated that the Chinese market will see a decline in its rate of annual installations, resulting in total capacity of 179 GW by 2020.

GWEC said this was rather pessimistic given the Chinese government's commitment to developing wind power.

Total installed capacity could instead reach 125 GW by 2015, growing to 214 GW by 2020 and 400 GW by 2030, but infrastructure and transmission lines will need to improve to accommodate more wind power on the grid.

Moderate growth in the rest of the world

Although new markets in Latin America, Africa and Asia are emerging, potential for growth in the medium to long term will not be huge, the report said.

The U.S. market grew by more than 30 percent last year, with a total installed capacity of 47 GW. By 2020, new installations in North America could grow by 14 GW per year to 2030.

This compares to IEA estimates of 8 GW a year to 2015, slowing to 6.7 GW by 2020, and to 5.9 GW from 2022-2029.

"All things point towards exceptional growth in 2012, although this is clouded by dim prospects for the 2013 market, depending on the fate of the production tax credit," the report said, referring to a federal tax credit for renewable energy which helped create more than USD15 billion a year investment in U.S. wind farms since 2005.

The credit is due to expire at the end of this year but there is pressure on the U.S. Congress to extend it.

Meanwhile, Europe's total installed capacity stood at 94.3 GW in 2011 which should grow to 138 GW by 2015 and then at a healthier rate to reach 211 GW by 2020 and 372 GW by 2030.

Stable long term policy needed

The Global Wind Energy Outlook paints a picture of three different futures for the wind industry, looking at scenarios out to 2020, 2030, and eventually to 2050.

Then it measures these scenarios against two different projections for the development of electricity demand: the first based on the International Energy Agency’s World Energy Outlook, and another, more energy efficient future developed by the ECOFYS consultancy and researchers at the University of Utrecht.

“It is clear that wind energy is going to play a major role in our energy future,” said Steve Sawyer, Secretary General of the Global Wind Energy Council, in GWEC News.

“But for wind to reach its full potential, governments need to act quickly to address the climate crisis, while there’s still time.”

In addition to being a major source of emission reductions, wind energy also uses no fresh water to generate electricity, a unique attribute (along with solar PV) which makes it an attractive option in an increasingly water-constrained world.

Wind power is now competitive in an increasing number of markets, even when competing against heavily subsidized ‘conventional’ energy sources.

"The most important ingredient for the long term success of the wind industry is stable, long term policy, sending a clear signal to investors about the government’s vision for the scope and potential for the technology," said Sven Teske, Greenpeace senior energy expert.

“The Global Wind Energy Outlook shows that the industry could employ 2.1 million people by 2020 – three times more than today, given the right policy support,” Teske said.

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