Research Directions: Global Wind Energy

Wind power’s emergence as a mainstream power source has posted impressive growth figures in recent years. The industry has become a geographically diverse market of utility scale, with soaring demand for large turbines to meet global needs for power supply.

Global Annual MW Installed, 2000-2015

Source: Emerging Energy Research

The global wind market has hit a growth surge that will catapult the industry from a 7,000 MW to 8,000 MW plateau from 2001 to 2004 to a new plateau of more than double the size, an estimated 18,000 MW per year from 2009–2010 onwards. While the plateau that occurred earlier this decade represented largely European demand, allowing predominantly European suppliers to scale their domestic production facilities incrementally, the current surge adds considerable new challenges geographically:

• The roller-coaster growth curve of the US market, caused by federal Production Tax Credit (PTC) policy during 2001–2005, created supply chain bottlenecks, and dampened turbine vendor interest in investment in US turbine manufacturing capacity. Although federal PTC uncertainty remains post-2008, the scale of the North American wind market has now fundamentally changed, with the US and Canada now quickly growing from an average of 700 MW per year pre-2005 to potentially 5,000 MW per year from 2008 onward.
   
• In Europe, while veteran wind countries Germany and Spain will continue to add impressive growth through 2010, long-term growth potential on the European continent will increasingly be focused around emerging wind markets such as France, Italy and Central and Eastern Europe. Diversification of wind growth potential across numerous European markets will allow the continent to continue to expand its level of annual wind MW additions, reaching a plateau of nearly 10 GW in new annual capacity by 2010 and beyond. As this level of sustained growth begins to saturate onshore wind potential in several key growth countries, offshore opportunities will become increasingly important to realizing national renewable energy goals post-2010, especially in the UK, Germany and Nordic markets.
   
• In the Asia-Pacific region, India has emerged as a 1,500 MW-per-year market following a rapid ramp up between 2003 and 2004, and will install 2,000 MW annually by 2010. China’s annual MW installed has nearly doubled over the past three years and is rapidly headed towards the 1,000 MW-per-year mark; and is set to reach over 1,500 MW per year by 2010. This explosive growth rate, making China the world’s eighth-largest market by MW installed annually, is further complicated by the Chinese government’s imposition of 70% local content requirements going forward.

The explosive global growth of wind power puts it at risk to falling victim to its own success, as the industry finds itself in the midst of a major component shortage to deliver on increasingly challenging orders. Since the end of 2005, this scaling of deployments in diverse geographic markets has created multiple bottlenecks across the supply chain. These bottlenecks range from commodity components to sophisticated control systems, as suppliers of materials, components, and turbines race to expand existing production facilities, set up in new markets, and keep pace with shifting procurement trends as the industry’s customer base evolves.

The bottom line has been an escalation of wind turbine prices and wind power O&M costs threatening the long-term profitability of wind projects. Are these cost trends permanent or short-term responses to turbine shortages? Will operation efficiencies from scaling and from consolidation make a difference? Can the industry rise to the challenge?

EER Resources – Global Wind Energy

EER provides extensive research and analysis on Global Wind Power Markets. Click on the following links for more information on our products and services in this area:

Global Wind Power Advisory Services

• Global Wind Energy Advisory
• European Wind Energy Advisory
• US/Canada Wind Energy Advisory
• Asia/Pacific Wind Energy Advisory

Wind Power Market Studies

• US Wind Power Markets and Strategies, 2007-2015
• Canada Wind Power Markets and Strategies, 2007-2015
• Asia Pacific Wind Power Markets and Strategies 2006-2015
• European Wind Power Markets and Strategies 2006-2011
• US/Canada Wind Power Markets and Strategies 2005-2010

Key Deliverables

• Global Wind Plant Ownership Rankings
• Global Wind Plant Country Forecasts
• Strategy White Paper – Supply Chain Shortages Spark Industry Restructuring
• Market Briefs – Australia, China, France, Eastern Europe, Germany, Japan, India, Italy, Ontario, Pacific Northwest, Pennsylvania, Quebec, Sweden, Turkey