A power to be reckoned with1 March 2009
In 2008, more wind power was installed in the EU than any other electricity generating technology; in the USA it represented 42% of new installed capacity; in China installed capacity doubled for the fourth year in a row. However, the expected downturn in orders worldwide will test the industry’s optimism to the limit.
The wind power industry’s performance during 2008 was dominated by two landmark events that pointed up its rapid rise to prominence in the energy mix and its general acceptance as a power source to be reckoned with. First, the USA overtook Germany to become the world number one in total wind power installations to date, and second, in Europe installed wind capacity during the year was for the first time the highest figure for any power technology. China continued its extremely rapid expansion by doubling its total capacity for the fourth year in a row. Total worldwide installations in 2008 came to more than 27 000 MW, dominated by the three main markets in Europe, North America and Asia (Table 1).
Global wind energy capacity grew by 28.8% last year, a figure higher than the average over the past decade, to reach total global installations of more than 120.8 GW at the end of 2008. Over 27 GW of new capacity came on line, 36% more than in 2007. The global wind market for turbine installations was worth about r36.5bn ($47.5bn).
‘There is huge and growing global demand for emissions-free wind power, said Steve Sawyer, secretary general of GWEC. ‘The 120 GW of global capacity in place at the end of 2008 will produce 260 TWh and save 158 million tons of CO2 every year. We’re on track to meet our target of saving 1.5 billion tons of CO2 per year by 2020 but we need a strong, global signal from governments that they are serious about moving away from fossil fuels and protecting the climate. A positive outcome to the climate negotiations throughout this year ... will send the kind of signal that the industry and investors need for wind power to reach its full potential.’
The industry has also created many new jobs, the total employed reaching 400 000 worldwide during the year, but it remains to be seen whether the present degree of ramping up can be maintained during 2009 and beyond. Several major players including Vestas, Iberdrola, Nordex, Siemens and Clipper have announced job or activity cuts and production downsizing to meet the expected reduction in demand during 2009. Analysts are now projecting that it will take European companies until 2012 to install the production capacity they had previously planned for 2010. What seems certain now is that is the number of people employed in the industry will not grow in the near future to the millions predicted in 2008 by GWEC chairman, Prof. Arthouros Zervos.
The leading markets in terms of new installed capacity in 2008 were the USA and China where new installations totalled 8358 MW (increasing capacity by 50%), and 6300 MW respectively. Europe and North America are now running neck-and-neck, with about 8.9 GW each of new installed capacity in 2008, with Asia closely following with 8.6 GW.
The growth in Asia’s markets has been breathtaking, accounting for nearly a third of all new capacity installed in 2008 on the Asian continent. In particular, the wind energy boom is continuing in China. In its response to the financial crisis, the Chinese government has identified the development of wind energy as one of the key economic growth areas. ‘The outlook for the coming years is also very healthy’ said Shi Pengfei, vice president of the Chinese Wind Energy Association (CWEA). ‘In 2009, new installed capacity is expected to nearly double again, which will be one third or more of the world’s total new installed capacity for the year,’ said Li Junfeng, secretary general of the Chinese Renewable Energy Industry Association (CREIA). At this rate, China will meet its 2020 target of 30 GW ten years ahead of time. The growing wind power market in China has also encouraged domestic production of wind turbines and components, and the Chinese manufacturing industry is becoming increasingly mature, stretching over the whole supply chain.
Now these manufacturers have international ambitions, especially for components. ‘In 2009, Chinese companies will start to enter the UK and Japanese markets. There are also ambitions for exploring the US market in the coming years’ said Li Junfeng. Danish renewable energy consultancy BTM Consultants calculates that about 18% of the world's turbines are now manufactured in India and China, compared with 67% in Europe. Asia's share will continue to rise, they say, putting increasing pressure on European suppliers' margins.
Wind ‘number one’ in Europe
Statistics released by the European Wind Energy Association (EWEA) in January showed that 43% of all new electricity generating capacity built in the European Union in 2008 was wind energy, for the first time exceeding all other technologies including gas, coal and nuclear.
A total of 19 651 MW of new power capacity was constructed in the EU last year. Out of this, 8484 MW was wind power, 6932 MW (35%) gas, 2495 MW (13%) oil, 762 MW (4%) coal and 473 MW (2%) hydro capacity. This brought to a total of 64 949 MW the installed wind energy capacity operating in the EU by end 2008, 15% higher than in 2007.
On average, 20 wind turbines were installed every working day of 2008. By the end of the year, a total of 160 000 workers were employed directly and indirectly in the sector, which saw investments of about €11 billion in the EU. The wind power capacity installed by end 2008 will, in a normal wind year, produce 142 TWh of electricity, equal to about 4.2% of the EU’s electricity demand, and avoid the emission of 108 million tonnes of CO2 per year, the equivalent of taking more than 50 million cars off Europe’s roads.
‘Wind energy is an example of an intelligent investment that puts EU citizens’ money to work in their own economies rather than transferring it to a handful of fuel-exporting nations’, commented Kjaer. ‘Investing in wind energy means supporting technology leadership, climate protection, energy independence, commercial opportunities and jobs.’
In terms of capacity installed during the year, Germany and Spain are still battling over the top spot. In 2008, Germany was back in a narrow lead with 1665 MW against Spain’s 1609 MW. But overall, 2008 saw a much more balanced expansion led by France, the UK and Italy, part of a ‘second wave’ of countries that are providing momentum to the surge in wind energy. In 2008 Italy added 1010 MW to reach a total of 3736 MW of capacity, France 950 MW to reach 3404 MW and the UK, 836 MW to reach 3241 MW. Ten EU member states – out of 27 – now each have more than 1000 MW of installed wind energy capacity.
A distinct ‘third wave’ became visible for the first time in 2008 as the new EU member states had their strongest year ever. Hungary doubled its capacity to 127 MW and Bulgaria tripled its capacity from 57 MW to 158 MW. Poland, one of the fastest growing younger markets, now has 472 MW up from 276 MW. Of the non-EU member states, Turkey was prominent, tripling its wind capacity from 147 MW to 433 MW.
Oddshore, 357 MW of new capacity was added in 2008, to reach a total of 1471 MW. Nearly 2.3% of total installed EU wnd capacity is now offshore.
The US market
The US wind energy industry shattered all previous records in 2008 by installing 8358 MW of new generating capacity, according to figures compiled by the American Wind Energy Association although it also warned of an uncertain outlook for 2009 owing to the continuing financial crisis.
Rapid growth in 2008 swelled the USA’s total wind power generating capacity by 50% and channeled an investment of some $17 billion into the economy, positioning wind power as one of the leading sources of new power generation in the country today along with natural gas.
New wind projects completed in 2008 accounted for about 42% of the entire new power-producing capacity added in the US last year, created 35 000 new jobs (for a total of 85 000 employed in the sector) and will avoid nearly 44 million tons of carbon emissions, the equivalent of taking over 7 million cars off of the road.
The amount that the industry brought online in the 4th quarter alone – 4112 MW – exceeded annual additions for every year except 2007. In all, wind energy generating capacity in the US now stands at 25 170 MW, producing enough electricity to power the equivalent of close to 7 million households and strengthening the national energy supply with a clean, homegrown source of energy.
At the year’s end, however, financing for new projects and orders for turbine components slowed to a trickle and layoffs began to hit the wind turbine manufacturing sector as the financial crisis began to bite. ‘The U.S. wind energy industry turned in a record-shattering performance in 2008, establishing wind as one of the leading sources of new electricity generation in the country and a job creation dynamo,’ said AWEA CEO Denise Bode. ‘At the same time, it is clear that the economic and financial downturn have begun to take a serious toll on new wind development. We look forward to working with president Obama and the new Congress on policies to restore the industry’s vital momentum and achieve president Obama’s goal of doubling renewable energy production in three years.’
are now employed in this industry, and that number will be in the millions in the near future.’ said GWEC’s chairman, Prof. Arthouros Zervos.‘