The world’s total installed capacity reached 120.8 GW at the end of 2008, over 27 GW of which came online in 2008 alone, representing a 36% growth rate in the annual market. These figures show that there is huge and growing global demand for emissions-free wind power, which can be installed quickly, virtually everywhere in the world.
Wind energy has grown into an important player in the world’s energy markets, with the 2008 market for turbine installations worth about €36.5bn.
The wind industry also creates many new jobs: over 400,000 people are now employed in this industry, and that number is expected to be in the millions in the near future.
Three key regions are continuing to drive global wind development: North America, Europe and Asia, with the lion’s share of 2008’s new installations evenly distributed between them.
Record breaking performance of US market
In North America, the US market broke all previous records with new installations of 8.5 GW, reaching a total installed capacity of over 25 GW. This means that the US has now officially overtaken Germany (24 GW) as number one in wind power.
Wind generating facilities are now located in 34 US states, with Texas still the number one wind producing state. Iowa passed California to take the second spot in 2008. The five leading states in terms of installed capacity are now:
- Texas: 7,116 MW
- Iowa: 2,790 MW
- California: 2,517 MW
- Minnesota: 1,752 MW
- Washington State: 1,375 MW
The massive growth in the US wind market in 2008 increased the country’s total wind power generating capacity by half. The new wind projects completed in 2008 accounted for about 42% of the entire new power producing capacity added in the US last year, and created 35,000 new jobs, for a total of 85,000 employed in the sector.
At year’s end, however, financing for new projects and new orders for turbines and components slowed to a trickle as the financial crisis began to hit the wind sector, taking a serious toll on financing available for new projects. This in turn is dampening orders for new turbines, with repercussions throughout the supply chain.
But the US Congress has now passed a stimulus package, which should restore the industry’s vital momentum in order to achieve President Obama’s stated goal of doubling renewable energy production in three years.
Wind power has now become an icon as well as a driver of the “new clean energy economy” in the US. Before the election, in mid-2008, the spike in oil prices brought renewed interest in renewable energy as a replacement for fossil fuels, especially after T. Boone Pickens, a veteran oil billionaire, undertook a nationwide media campaign proposing that oil imports be reduced by using natural gas for automotive transport and making up the shortfall in electricity generation with wind.
Looking ahead, in spite of the concerns about the financial crisis and its spillover into the ‘real’ economy, the wind energy industry is in a strong strategic position thanks to the fundamental drivers behind its growth. In 2008, the US Department of Energy released a ground-breaking report, finding that wind power could provide 20% of US electricity by 2030. With the wind energy industry’s strong performance in 2008 and the support of the new Obama Administration, the industry seems off to a good start to turning that very achievable scenario into reality, or even surpassing it.
Canada in 2008 surpassed the 2 GW mark for installed wind energy capacity, ending the year with 2.4 GW. Canada’s wind farms now produce enough power to meet almost one per cent of Canada’s electricity demand.
2008 was Canada’s second best ever year for new wind energy installations with ten new wind farms coming online, representing 523 MW of installed wind energy capacity. Included in this total were the first wind farms in the provinces of New Brunswick, and Newfoundland and Labrador. In British Columbia, the only remaining Canadian province without a wind farm, construction began on its first wind farm with completion expected in early 2009.
China doubles its wind capacity, driving growth in Asia
The growth in Asia’s markets has been breathtaking; nearly a third of all new capacity (8.6 GW) in 2008 was installed on the Asian continent.
The Chinese market continued its spectacular growth in 2008, once again doubling its installed capacity by adding about 6.3 GW, to reach a total of 12.2 GW.
The prospects for future growth in China are very good. In response to the financial crisis, the Chinese government has identified the development of wind energy as one of the key economic growth areas, and in 2009, new installed capacity is expected to nearly double again. At this rate, China would be well on its way to overtake Germany and Spain to reach second place in terms of total wind power capacity in 2010. China would then have met 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. According to the Chinese Renewable Energy Industry Association (CREIA), the supply is starting to not only satisfy domestic demand, but also meet international needs, especially for components. In 2009, Chinese companies are set to start entering the UK and Japanese markets, and orders for 200 blades have already been placed. There are also ambitions for exploring the US market in the coming years.
In 2008, the newly-established National Energy Bureau established wind energy as a priority for diversifying China’s energy mix away from coal. In order to achieve this, the Bureau selected 6 locations in provinces rich in wind resources: Xinjiang, Inner Mongolia, Gansu, Hebei and Jiangsu. The government is calling for the installation of 10GW of new wind generating capacity by 2020 on each of these sites.
Chinese wind resources are richest in the country’s north-west, where the population is sparse and the electricity demand is low. As a result, large scale and centralized projects as the ones planned will need the infrastructure for high voltage and long distance transmission – a big challenge for transmission and grid construction in China.
India is continuing its steady growth, with 1,800 MW of wind energy capacity added in 2008. This brings the total up to 9.6 GW. The leading wind producing state in India is Tamil Nadu, which hosts over 4 GW of installed capacity, followed by Maharashtra (1.8 GW) and Gujarat (1.4 GW).
Other Asian countries with new capacity additions in 2008 include Japan (356 MW, taking the total to 1.9 GW), Taiwan (81 MW, 358 MW) and South Korea (43 MW, 236 MW).
Wind is fastest growing power technology in Europe
Although Europe was home to only one third of the world’s new installed capacity in 2008, the European market continues its steady growth, and wind power is now the fastest growing power generation technology in the EU. Indeed, 43% of all new installations in 2008 were wind power, well ahead of gas (35%) and oil (13%).
Overall, almost 8.9.GW of new wind turbines brought European wind power generation capacity up to nearly 66 GW, and there is a clear diversification of the European market, relying less and less on the traditional wind markets Germany, Spain and Denmark. 2008 saw a much more balanced expansion, and the league of newcomers was led by France, the UK and Italy. Ten of the EU's 27 member states now have wind power capacity of more than 1GW.
In 2008 the European wind turbine market was worth €11bn, and the entire wind fleet will, in an average wind year, produce 142 TWh of electricity or about 4.2% of EU demand. This will save about 100m tonnes of CO2 each year.
While at global level, Germany has by surpassed by the US, it continues to be Europe’s leading market, both in terms of new and total installed capacity. Over 1.6 GW of new capacity was installed in 2008, bringing the total up to nearly 24 GW.
Wind energy is continuing to play an important factor in Germany’s energy mix. In 2008, 40.4 TWh of wind power were generated, representing 7.5% of the country’s net electricity consumption. In economic terms, too, wind power has become a serious player in Germany, and the sector now employs close to 100,000 people.
Europe’s second biggest market, Spain, has seen growth in line with previous years (with the exception of 2007, when regulatory change brought about a higher than usual amount of new wind capacity). In 2008, 1.6 GW of new generating equipment was added to the Spanish wind fleet, bringing the total up to 16.7. This development confirms Spain as a steadily growing market, which at this rate is likely to reach the government’s 2010 target of 20 GW of installed wind capacity. In 2008, wind energy generated more than 31.000 GWh, covering more than 11 per cent of the country’s electricity demand.
One noteworthy newcomer among the strongly growing European markets in 2008 was Italy, which experienced a significant leap in wind power capacity; over 1,000 MW of new wind power was brought online in 2008, bringing total installed capacity up to 3.7 GW, which resulted in Italy overtaking Denmark as Europe’s third largest market. In addition, at the end of 2008, the Italian government passed an important decree that resolves many of the main problems related to the value of green certificates. This measure is designed to avoid speculative fluctuations in the price of green certificates that negatively affected the Italian market in the past.
France is also continuing to see strong growth, after progressing steadily in recent years. In 2000, France had only 30 MW of wind generating capacity, mostly small wind turbines in the French overseas territories. At the end of 2008, the total installed capacity stood at 3.4 GW, representing an annual growth rate of 38%. Wind power is now France’s fastest growing energy source; in 2008, around 60% of all newly added power generation capacity in France was wind energy.
The biggest potential in the coming years is estimated to be in the north and the north east of the country. Out of 4,000 MW of approved wind power projects, more than 700 MW are in the region Champagne-Ardennes and 500 MW in Picardy.
Latin America: only Brazil installs new wind capacity
The Latin American market, despite the tremendous wind resources in the region, saw only slow growth in 2008. The only country installing new capacity was Brazil, which added 94 MW of wind energy across five wind farms, mostly located in the State of Ceará in the north east of the country.
The first stage of Brazil’s PROINFA programme, which was initially passed in 2002 in order to stimulate the addition of over 1,400 MW of wind energy capacity as well as other sources, was supposed to finish in 2008, although it has now been extended. Although substantial installations are expected this year, it is unlikely to achieve the overall goal. The Brazilian government is now looking at establishing an auctioning scheme to increase the country’s wind capacity, and a first auction is expected in late 2009.
Traditionally dominated by just one turbine manufacturer, Wobben Enercon, several other international players have now entered the Brazilian market, including Vestas, Suzlon and the Argentinean company IMPSA.
Australia back on wind energy radar
After several years of stagnation in the Australia’s wind market, the speed of development picked up again in 2008, with 482 MW of new installations, a 58% leap in terms of total installed capacity. Australia’s is now home to 50 wind farms, with a total capacity of 1.3 GW. Seven additional projects totalling 613 MW are currently under construction and expected to become operational in 2009. At the end of 2008, Australia’s new labour government expanded the country’s Renewable Energy Target (RET) from 2% by 2010 to 20% by 2020. While this development was much applauded by the renewables sector, a simultaneously released White Paper on carbon emissions set an unambitiously low target of cutting the country’s CO2 emissions by a mere 5% by 2020 and a carbon price cap at 40 USD (around 20EUR) per ton. Opponents of this scheme fear that this undermines the government renewable energy targets and damages investor confidence.
130 MW installed in Africa and Middle East
In North Africa, the expansion of wind power continues in Egypt, Morocco and Tunisia, with 55 MW, 10 MW and 34 MW of new capacity installed respectively. In the Middle East, Iran installed 17 MW of new capacity. The total for Africa and the Middle East now stands at 669 MW.
Wind energy must be key climate change solution
The global wind industry has set itself a target of saving 1.5 billion tons of CO2 per year by 2020, which would amount to a total of 10 billion tons saved in this period. While developments in 2008 show that the sector is well on track to meeting this target, a strong global signal from governments is needed to show that they are serious about moving away from fossil fuels and protecting the climate.
As positive outcome to the climate negotiations throughout this year, resulting in a new global agreement in Copenhagen in December, is of fundamental importance and will send the kind of signal that the industry, investors and the finance sector need for wind power to reach its full potential.