Volume 2 wind energy 2 20 – wind power industry and markets

Volume 2 wind energy 2 20 – wind power industry and markets Volume 2 wind energy 2 20 – wind power industry and markets Volume 2 wind energy 2 20 – wind power industry and markets Volume 2 wind energy 2 20 – wind power industry and markets Volume 2 wind energy 2 20 – wind power industry and markets Volume 2 wind energy 2 20 – wind power industry and markets

2.20 Wind Power Industry and Markets PE Morthorst, Technical University of Denmark, Roskilde, Denmark © 2012 Elsevier Ltd 2.20.1 2.20.2 2.20.3 2.20.4 2.20.4.1 2.20.4.2 2.20.4.3 2.20.5 2.20.5.1 2.20.6 2.20.6.1 2.20.7 2.20.8 References Global Market Development Trends in the Development of Wind Turbines Main Drivers behind the Wind Power Development Market Development in Europe Germany Spain Rest of Europe Development of Wind Power in North America United States Wind Power Development in Asia China Offshore Wind Power Development Wind Turbine Manufacturers 657 659 660 662 662 663 664 665 665 666 666 666 667 669 2.20.1 Global Market Development Within the last 15–20 years, wind power has on a global scale developed incredibly fast In 1990, total installed capacity of wind power in the world amounted to approximately GW – by the end of 2009, this capacity has increased to 158 GW equaling an annual growth rate of almost 25% Although, on a global scale wind power accounts for only approximately 2% of total electricity supply, this small fraction is increasing rapidly As shown in Figure 1, wind power has experienced a fairly steady but continued rapid capacity development (left part) The right part of Figure shows the capacity development in the early years, from 1983 to 1995, and already from the late 1980s a strong development is taking place The growth in installed global wind power capacity is shown in Figure Except for year, 2004, the annual absolute growth has increased for every year For quite an impressive time period, the annual percentage growth rates have exceeded 30% In 2008, the growth equaled almost 29%, and in 2009, it was 31%, despite a financial crisis On a global scale, the three main regions regarding wind power development are Europe, North America, and Asia, comprising approximately 97.2% of total installed capacity The rest of the world only has smaller amounts of wind power installed, that is, Latin America has 0.8% of world capacity, the Pacific has 1.4%, and finally, Africa and Middle East has 0.5% For a long period, Europe was dominating the wind power scene At the beginning of the century, Germany and Spain were unrivaled in wind power expansion, but in recent years countries outside Europe have moved fast This applies especially for the United States and China, where the latter in just a few years ranks third in terms of installed wind power capacity This becomes clear from Figure 3, where wind power installed in Asia in 2009 amounted to 14.6 GW, significantly above North America with 10.9 GW and Europe with 10.5 GW installed wind power capacity Thus, the European share has decreased strongly from 67% of total world installed capacity in 2003 to 28% in 2009 However, with regard to cumulative installed capacity, Europe is still in the lead with a little more than 48% of total installed wind turbine capacity, while approximately 24% was installed in North America and approximately 25% in Asia [1] Figure shows the top 10 countries’ distribution of the global installed wind power capacity by end 2009 Four countries, the United States, Germany, China, and Spain, are dominant covering approximately two-thirds of the cumulative installed capacity worldwide Following these four, we find a large group of countries with smaller contributions, although some of them are developing quite fast Observe that all top 10 countries are from the above-mentioned three major regions (the most important countries will be treated in more detail in the following sections) The other regions of the world – Latin America, the Pacific, and Africa and Middle East – have not yet entered the ‘take off’ stage In Latin America, Brazil, Mexico, and Chile have done well within the last couple of years, while other countries only contribute irregularly In Africa, mainly the North African countries like Egypt and Morocco are in a steady growth Finally, in the Pacific region, both Australia and New Zealand have experienced growth in 2009 (400 and 170 MW installed capacity, respectively); however, the development in recent years has not been stable Comprehensive Renewable Energy, Volume doi:10.1016/B978-0-08-087872-0.00223-7 657 658 Wind Power Industry and Markets Cumulative capacity The first years 6000 180 160 140 120 100 80 60 40 20 5000 MW 4000 1000 95 94 19 93 19 92 19 91 19 90 19 89 19 88 19 87 19 86 19 85 Year 19 84 19 83 19 19 19 89 19 91 19 93 19 19 97 19 99 20 01 20 03 20 05 20 07 20 09 19 85 19 19 3000 2000 83 GW Cumulative capacity Year Figure Development of the global wind power market (Left) Cumulative installed capacity (Right) Highlight of the cumulative capacity development 1983–95 Source: GWEC (2010) http://www.ewea.org [1]; BTM consult ApS – A part of NAVIGANT (2010) World Market Update 2009, March [2] Annual percentage growth 60 Annual growth 40 % annual increase 50 35 30 GW 25 20 15 10 40 30 20 10 99 20 01 20 03 20 05 20 07 20 09 97 19 95 19 93 19 91 19 89 19 87 19 85 19 19 83 19 19 19 19 19 19 19 19 19 20 20 0 20 20 20 20 20 20 20 20 09 0 Year Year Figure Growth in global annual installed wind power capacity (Left) Absolute annual growth (Right) Percentage annual growth Source: GWEC (2010) http://www.ewea.org [1] 16 GW per year 14 12 2003 10 2004 2005 2006 2007 2008 2009 Europe North America Asia Figure Annual installed wind power capacity in the three main regions: Europe, North America, and Asia Source: GWEC (2010) http://www.ewea.org [1] Wind Power Industry and Markets Portugal 2% Residual 14% Denmark 2% 659 US 22% UK 3% France 3% Italy 3% Germany 16% India 7% China 16% Spain 12% Figure Top 10 countries’ distribution of global installed capacity Source: GWEC (2010) http://www.ewea.org [1] 2.20.2 Trends in the Development of Wind Turbines In general, three major trends have dominated the development of grid-connected wind turbines in recent years: The turbines have grown larger and taller – thus the average size of turbines sold at the market place has increased substantially The efficiency of the turbines’ production has increased steadily In general, the investment costs per kilowatt have decreased, although recent years have shown a discrepancy from this trend Figure shows the development of the average size of wind turbines sold each year for a number of the most important wind power countries As illustrated in Figure 5, the annual average size has increased significantly within the last 10–15 years, from approximately 200 kW in 1990 to more than MW in the United Kingdom and Denmark in 2008, with Germany, Spain, and the United States lagging only a little behind But as shown, there is quite a difference between some of the countries In India and China, the average installed size in 2008 was approximately MW, significantly below the level of the United Kingdom and Denmark of 2256 and 2277 kW, respectively The unstable picture for Denmark in recent years mainly reflects a fairly small number of new turbines being installed and in some years being dominated by offshore installations In 2008, turbines of the megawatt-class (i.e., above MW) had a market share of more than 95%, leaving less than 5% for the smaller machines Within the MW-segment turbines with capacities of 2.5 MW and up are getting increasingly important, even for on-land sitings These large turbines had a share of 6% of the market in 2008, compared to only 0.3% at the end of 2003 The wind regime at the chosen site, the hub height of the turbines, and the efficiency of production mainly determine power production from the turbines Thus, increasing the height of the turbines has by itself yielded a higher power production Similarly, the methods for measuring and evaluating the wind speed at a given site have improved substantially in recent years and thus improved the siting of new turbines In spite of this, the fast development of wind power capacity in countries such as Germany and Denmark implies that most of the good wind sites by now are taken and, therefore, new on-land turbine capacity has to be erected at sites with a marginally lower average wind speed To this though should be added that the replacement of older and smaller turbines with new ones is getting increasingly important, especially in countries that have taken part in the wind power development for a long time as is the case for Germany and Denmark 2500 2000 Germany Spain kW 1500 UK Denmark 1000 India 500 USA China 08 20 06 04 20 02 20 00 20 98 20 96 19 94 19 19 92 19 19 90 Figure Development of the average wind turbine size sold in different countries Source: BTM consult ApS – A part of NAVIGANT (2009) World Market Update 2008, March [3] Wind Power Industry and Markets 1400 1200 700 150 kW 225 kW 300 kW 2000 kW 600 2000 kW 500 kW 1000 kW 600 kW 1000 kW 1000 500 400 /kW 800 600 300 400 200 200 100 per swept rotor area 660 Price of turbine per kW Other costs per kW Total cost per swept m2 06 09 20 01 97 95 04 20 20 20 19 91 93 19 19 19 19 89 Year of installation Figure The development of investment costs exemplified by the case of Denmark for the time period from 1989 to 2009 Right axis: Investment costs divided by swept rotor area (€ m−2 in constant 2009 €) Left axis: Wind turbine costs and other costs per kW rated power (€ kW−1 in constant 2009 €) The development of electricity production efficiency owing to better equipment design measured as annual energy production per swept rotor area (kWh m−2) at a specific reference site has correspondingly improved significantly over recent years Taking into account all the three mentioned issues of improved equipment efficiency, improved turbine siting, and higher hub height, the overall efficiency has increased by more than 2% annually over the last 15 years Figure shows how investment costs have developed over the years, exemplified by the case of Denmark for the time period from 1987 to 2009 The data reflect turbines installed in the particular year shown (all costs are converted to 2009 prices) and all costs at the right axis are calculated per swept rotor area, while those at the left axis are calculated per kilowatt of rated capacity The number of square meters the rotor of the turbine is covering – swept rotor area – is a good proxy for the turbines’ power production and therefore this measure is a relevant index for the development in costs per kWh As shown in the figure, there has been a substantial decline in costs per unit swept rotor area in the considered period except from 2006 to 2009 Thus, from the late 1990s until 2004, the overall investments per unit swept rotor area have declined by more than 2% per annum during the period analyzed, corresponding to a total reduction in cost of almost 30% over these 15 years But this trend was broken in 2006 where total investment costs rose by approximately 20% compared to 2004, mainly induced by a strong increase in demand for wind turbines combined with severe supply constraints [4] Looking at the cost per rated capacity (per kW), the same decline is found in the period 1989 to 2004 with the 1000 kW machine in 2001 as the exception The reason has to be found in the dimensioning of this specific turbine With higher hub heights and larger rotor diameters, the turbine is equipped with a relatively smaller generator although it produces more electricity This is particularly important to be aware of when analyzing turbines constructed to be used in low and medium wind areas, where the rotor diameter is dimensioned to be considerably larger compared to the rated capacity As shown in Figure 6, the cost per kW installed also rose by 20% in 2006 compared to 2004, while the cost almost remained constant from 2006 to 2009 At the beginning of 2010, it seems that the cost has declined slightly compared to 2009; however, at present this cannot be documented by sampled data [5] Also, the share of other costs as a percentage of total costs has in general decreased In 1989, almost 29% of total investment costs were related to costs other than the turbine itself By 1997, this share had declined to approximately 20% The trend toward lower auxiliary costs continues for the last vintage of turbines shown (2000 kW), where other costs amount to approximately 18% of total costs But from 2004 to 2006, other costs rose almost in parallel with the cost of the turbine itself and have stayed at this level in 2009 2.20.3 Main Drivers behind the Wind Power Development The reasons for the global success of wind power are many fold Seen from a governmental viewpoint, some of the benefits are as follows [6]: • Improved security of energy supply • Enhanced competitive edge in the renewable energies technology industries Wind Power Industry and Markets 661 Denmark Lithuania Latvia Sweden Finland Estonia United Kingdom Spain Slovenia Slovak Romania Portugal Poland Netherlands Malta Luxembourg Italy Ireland Hungary Greece Germany France Czech Republic Cyprus Bulgaria Belgium Austria 0% 10% 20% 30% Share 2005 Target 2020 40% 50% Figure National renewable energy targets as % of final energy consumption • Mitigation of greenhouse gas emissions by power sector • Mitigation of regional and local pollutant emissions • Improved economic and social prospects especially for rural and isolated areas Thus, as part of their energy policy, a number of countries have established long-term targets for renewables, and thus implicitly for wind power as part of the renewable portfolio As an example, European Union (EU) has set the mandatory target for renewable energy sources that by 2020 20% of final energy demand in EU has to be supplied by renewable technologies as hydro power, wind power, solar, and biomass This EU renewable target has to be implemented mainly by national initiatives (the European Trading System for CO2 allowances will be part of the regulatory framework) and is distributed on member states as shown in Figure The mandates for the share of renewable sources by 2020 vary significantly for the individual member states from an increase of 13% to a total of 30% for Denmark to an increase of only 6.9% to a total of 13% for the Czech Republic However, only at sites with relatively high wind speeds, wind turbines are at present economically competitive to conventional power production on purely economic grounds Figure shows the costs of wind power production in 80 70 /MWh 60 50 40 Regulation costs 30 CO2 - 15 /t Basic 20 10 Coal Natural gas Wind Power Wind Power -coastal site -inland site Figure The production costs of wind power compared to conventional power plants 662 Wind Power Industry and Markets comparison with costs of conventional power plants based on coal or natural gas The analysis is performed on fuel prices from the international markets and a crude oil price of 59 $ bbl−1 in 2010 (constant terms) is assumed The price of natural gas is assumed to follow the crude oil price The price of CO2 is assumed to be 15 € t−1 as observed by 2010 and basically covers the cost of fuels, operation and maintenance, and leveling of investment costs It is based on cost from IEA [7] and assumptions from OECD/IEA [8]) As shown, the costs of power production based on coal or natural gas are significantly lower than the costs of wind power production independent of site Thus, to attract investors wind power is dependent on economic support from national support schemes based on feed-in tariffs, green certificates (alternative to the renewable portfolio standard (RPS) in the United States or ROCs in the United Kingdom) or investment subsidies Most countries apply support schemes especially designed for their own and specific purposes In EU, feed-in tariffs have been highly effective in the deployment of wind power in Germany, Spain, and Denmark According to the EU Commission [4], the most effective scheme in general is the feed-in tariff that has the lowest risk as perceived by investors In the United States, the production tax credit (PTC) and the Renewable Portfolio Standard (RPS) have proved to be efficient in the deployment of wind power Nevertheless, the effectiveness of the support system depends heavily on the specific design of the scheme Thus, other schemes might prove to be effective in particular cases, for example, tendering in the development of offshore wind farms 2.20.4 Market Development in Europe Right from the start of the wind power revival, European countries have done well, and by the end of 2009, total installed capacity amounted to 76 GW During the 1990s there was a strong growth in Europe peaking with annual growth rates of cumulative capacity of 40–50% at the late 1990s (see Figure 9) However, although the absolute growth persistently is kept at a high level, the annual growth rates have declined severely, leveling off at a little more than 15% of annual growth in cumulative capacity This development is mainly the consequence of European policies Thus, at present the development is dominated by a few countries, especially Germany and Spain; however, quite a number of new countries are entering the wind power scene This applies especially for Italy, France, and the United Kingdom, which all are experiencing rapid expansions Quite a number of different instruments are presently used in the Member States in supporting the development of renewable energy sources Quota obligations with tradable green certificates, feed-in tariffs, tender procedures, and tax measures are the most discussed schemes, dominating the national support systems at the moment At present, most support schemes are based on a national entity and trade across the borders explicitly of green power is limited In the following the development of wind power in the most important European countries will be described 2.20.4.1 Germany By the end of 2009 wind power in Germany covered approximately 9% of the country’s power consumption and accounted for approximately 34% of total installed wind power capacity in Europe making Germany the number one country in this area However, the dominance of Germany is weakening The German share of new annual installed capacity in Europe has gradually fallen from 48% in 1999 to 18% in 2009 The development of annual installed capacity in Germany is shown in Figure 10 Together with Denmark, Germany was one of the first movers on the development of wind power in Europe Already at the end of the 1980s, a rapid development was initiated in Germany, especially in the Northern part of the country with good wind conditions, driven by favorable feed-in tariffs for wind produced power As shown in Figure 10, in the early 1990s Germany had Annual growth rates 60 50 % 40 30 20 10 Year 20 20 20 20 20 20 20 20 0 20 20 19 19 9 20 20 20 20 20 20 20 20 0 20 20 19 19 19 GW Cumulative capacity 90 80 70 60 50 40 30 20 10 Year Figure Development of wind power capacity in Europe (Left) Total cumulative capacity (Right) Annual growth rates of cumulative capacity Source: GWEC (2010) http://www.ewea.org [1]; BTM consult ApS – A part of NAVIGANT (2010) World Market Update 2009, March [2] Wind Power Industry and Markets Annual installed capacity Growth in cumulative capacity Year 08 20 06 20 04 20 02 20 00 92 19 07 05 03 01 09 20 20 20 20 97 95 93 91 99 20 19 19 19 19 19 19 89 98 500 20 1000 19 1500 19 % 2000 96 2500 100 90 80 70 60 50 40 30 20 10 19 3000 94 3500 MW 663 Year Figure 10 Development of wind power capacity in Germany (Left) Annual installed capacity (Right) Annual growth rates of cumulative capacity Source: GWEC (2010) http://www.ewea.org [1]; BTM consult ApS – A part of NAVIGANT (2010) World Market Update 2009, March [2] some years with very strong growth in cumulative capacity, 70–90% increase per year, followed by a stable time period with cumulative capacity growth rates of approximately 40% per year For many years, Germany has very successfully continued a policy of favorable feed-in tariffs, gradually decreasing the tariffs as wind power technology has economically matured However, although tariffs are still at a high level in Germany, growth rates of cumulative capacity have gradually declined For the last 5–6 years, the annual installed capacity has stagnated at approximately 1500–1700 MW, resulting in a growth rate of cumulative capacity below 10% per year A major reason for this is that new available sites for on-land turbines are becoming scarcer Thus, by now Germany is increasingly looking into the possibilities of offshore wind power development (see Section 2.20.7) 2.20.4.2 Spain In Spain, wind power covers approximately 15% of the country’s electricity consumption Spain is the number two country in Europe accounting for a share of approximately 26% of total cumulative wind power capacity by 2009 But as for Germany also, the pace in the Spanish development is declining In 1999, approximately 28% of the new capacity in Europe was installed in Spain; by 2009, this share has fallen to approximately 23% However, Spain is still the country in Europe with the largest installation of new capacity amounting to almost 2500 MW in 2009 (see Figure 11) The main driver in Spain has been a favorable feed-in tariff combined with a multitude of good wind sites in a large part of the country Historically, problems of getting access to the electricity grid and slow administrative procedures have been a limitation to development in Spain However, in recent years this seems to have improved [2] Some uncertainty around the future level of the feed-in tariff has implied a more unstable development of wind power in Spain than seen in Germany and this uncertainty seems to persist for the future Growth in cumulative capacity 140 40000 35000 30000 25000 20000 15000 10000 5000 00 120 % 100 80 60 40 20 Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20 05 20 07 20 09 MW Annual installed capacity Year Figure 11 Development of wind power capacity in Spain (Left) Annual installed capacity (Right) Annual growth rates of cumulative capacity Source: GWEC (2010) http://www.ewea.org [1]; BTM consult ApS – A part of NAVIGANT (2010) World Market Update 2009, March [2] 664 2.20.4.3 Wind Power Industry and Markets Rest of Europe There is quite a distance from the dominating two wind power countries in Europe, Germany, and Spain, to the next level of countries While Germany and Spain accounts for 34% and 25% of total installed capacity in Europe, respectively, the following countries account for less than 6% each However, a group of rapid moving countries consists of Italy, France, the United Kingdom, and Portugal The countries’ share of total installed wind power capacity in Europe by the end of 2009 is shown in Figure 12 The growth in cumulative wind power capacity in selected European countries is shown in Figure 13 As shown, quite a difference exists between fast growing countries and slow growing ones Italy is experiencing a strong growth for the time being, increasing cumulative capacity by 37% in 2008 and 30% in 2009 The country now has installed 4.8 GW and ranges as number three country in Europe in terms of cumulative wind power capacity The development in Italy is driven by a well-working green certificate system, and especially in the Southern part of the country, a large number of good windy sites exist At the end of 2009, a little more than 2% of power consumption in Italy was covered by wind power [2] A strong development of wind power is also going on in France In 2008, cumulative capacity increased by 39% and by 32% in 2009 The development in France is driven by the country’s commitment to the EU renewable targets where wind power is expected to contribute significantly A fairly high feed-in tariff is implemented in France, which of course is the major reason for the success The United Kingdom has taken the lead in offshore development of wind power Forty-three percent of total installed offshore capacity was established in the UK waters by the end of 2009 However, on-land installations are still dominating in the UK and Ireland 2% Sweden 2% Greece 1% Austria 1% Turkey 1% Poland 1% Belgium 1% Rest of Europe 2% Netherlands 3% Denmark 5% Europe Portugal 5% Germany 34% UK 5% France 6% Italy 6% Spain 25% Figure 12 Share of total installed wind power capacity in Europe, 2009 Source: GWEC (2010) http://www.ewea.org [1] Cumulative capacity growth 80 70 60 % 50 40 30 20 10 U Po K rtu D ga e l N nm et ar he k rla nd Sw s ed e Ire n la n G d re ec Au e st ria Tu rk e Po y la B nd R es elg to iu fE m ur op e Ita l Fr y an ce Figure 13 Growth in cumulative wind power capacity in Europe in 2009 (excluding Germany and Spain) Wind Power Industry and Markets 665 more than 80% of total installed capacity is land turbines Also in the United Kingdom, the growth of cumulative capacity is strong amounting to 35% in 2008 and 36% in 2009 The EU target for renewables is driving the Government’s actions and commits the UK to cover 15% of final energy consumption with renewable energy production by 2020; by now the contribution is approx 4% A system of Renewable Obligation Certificates (ROCs) is being utilized in the UK to promote renewable energy technologies [2] In Portugal the EU renewable target is an important driver as well The target for Portugal is a 32% coverage of final energy consumption by 2020, starting with approx 21% by 2005 The national target is GW by 2010 and at present this target seems not to be fulfilled Growth rates are still high in Portugal reaching 33% in 2008 and 24% in 2009 in cumulative capacity Denmark back in the 1980s and 1990s was the frontrunner in the development of wind power But the Danish development was stalled after year 2000, mainly because the fixed feed-in tariff was replaced with a feed-in premium at a lower level In recent years the premium has been increased so on-land installations of wind turbines are slowly starting again Denmark is worldwide number two in establishing offshore, holding 31% of total offshore installations only by-passed by the United Kingdom Among other established countries Sweden is developing pretty fast Newcomers such as Poland and Turkey have large potentials for siting wind turbines and by now seem to be growing fast, although they still have small amounts of wind power installed 2.20.5 Development of Wind Power in North America The North American region consists of the United States and Canada, where the United States is clearly dominating covering approximately 91% of total installed wind power capacity By the end of 2009, approximately 3.3 GW was installed in Canada, where the growth of cumulative capacity in 2008 was 28% and in 2009 an astonishing 40% In the following, the United States will be treated in more detail 2.20.5.1 United States A little more than 35 GW of wind power in total was installed in the United States by the end of 2009, which makes it the largest wind power country in the world, followed by Germany and China Approximately 22% of the world’s wind power capacity was established in the United States by the end of 2009 A veritable boom has appeared in the United States in recent years; the growth in cumulative wind power capacity was in 2008 at astonishing 50% followed by a growth in 2009 of 39% The development of annual installed capacity in the United States is shown in Figure 14 As Denmark, the United States was one of the early movers within the development of new wind power Already in the early 1980s, the United States had a strong development of wind power especially driven by a tax rebate scheme But the tax scheme was abandoned in the mid-1980s and thereby the installation of wind power was halted (see Figure 14) In general, the US policy is a combination of federal and State initiatives Federal energy policies are complemented by State policies, where the State policies are often found to be designed in a variety of different ways One of the important federal policies is the PTC The PTC has had a significant influence on the development of wind power At the same time, it has been subject to a stop­ and-go policy, the decisions on PTC delaying the deployment of wind power and creating a significant uncertainty for the industry The importance of the stop-and-go policy for wind power is clearly illustrated in Figure 14, most of the discontinuities caused by delayed PTC decisons [9] Texas is the leading state in terms of wind power capacity, followed by Indiana and Iowa In 2009, these three states accounted for 41% of new installed capacity in the United States [2] At the state level, the use of a renewable portfolio standard (RPS) scheme is one of the more popular policy instruments Annual growth in cumulative capacity Annual installed capacity 12000 70 10000 60 50 % 6000 40 30 20 2000 10 0 Year 19 86 19 88 19 90 19 92 19 94 19 96 19 98 20 00 20 02 20 04 20 06 20 08 4000 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20 05 20 07 20 09 MW 8000 Year Figure 14 Development of wind power capacity in the United States (Left) Annual installed capacity (Right) Annual growth rates of cumulative capacity Source: GWEC (2010) http://www.ewea.org [1]; BTM consult ApS – A part of NAVIGANT (2010) World Market Update 2009, March [2] 666 Wind Power Industry and Markets 2.20.6 Wind Power Development in Asia The Asian region is dominated by China and India, where China holds a share of Asian cumulative installed capacity of 65%, while India has a share of 28% Japan has at present a share of 5% and is developing slowly Finally, countries like Taiwan and South Korea have less than 1% of the Asian installed wind power capacity Today, India holds an installed capacity of 10.9 GW and is developing at a stable rate In 2008, the growth rate of cumulative capacity was 23%, and in 2009, it was 13% In the following, the Chinese development will be described in more detail 2.20.6.1 China China is clearly a newcomer to the wind power field, but nevertheless a newcomer that moves incredibly fast By the end of 2009, China had in total installed 25.1 GW of wind power, making China the third ranking country in the world in terms of cumulative installed capacity, very close to Germany with a total capacity of 25.8 GW but still a way to go to reach the US level of installed capacity of 35.1 GW The development of annual installed capacity in China is shown in Figure 15 With regard to China, fast means really fast; both in 2008 and 2009, the total installed capacity was more than doubled compared to the previous year Thus, the Chinese share of world installed wind power capacity went from 2% in 2005 to almost 16% by the end of 2009 By 2009, 35% of the world’s new established capacity was located in China compared to only 5% in 2005 Combining this with the recent development in the United States, this clearly indicates that the European dominance is broken, that new trends are pointing to a fast development in Chinese and US markets The wind power development in China actually started back in the mid-1990s For almost 10 years the development was fairly slow, the installed capacity being below 100 MW per year But in 2005, the Renewable Energy Law was approved and this signaled the take-off for wind power in China Thus, in 2005 the growth rate in cumulative capacity reached 65% and since then China has more than doubled cumulative capacity each year In 2009 approximately 13 GW of new capacity was installed, making China the world’s number one in terms of annual wind power installations The Chinese development is regulated by long-term plans and targets The Renewable Energy Law in 2005 was an important achievement and since then a number of new laws was put in place, regarding feed-in tariffs and access to the grid In 2008, the Renewable Energy development plan for the 11th 5-year period was approved, stating targets for wind power development in China The target for 2010 of 10 GW was already fulfilled in 2008, and during 2009, the Chinese Government launched a new long-term target of 100 GW by 2020 If the pace of wind turbine installation is kept at the present level in China, this target will be fulfilled in due time before 2020 [2, 10] 2.20.7 Offshore Wind Power Development In a number of countries, offshore turbines are playing an increasingly important role in the development of wind power, particularly in the north-western part of Europe Partly this can be explained by on-land sitings being limited in number and that the utilization of these sites to a certain extent is exposed to opposition from the local population This is seen in relation to an unexpected high level of energy production from offshore turbines compared to on-land sitings (based on the experiences gained until now) and has paved the way for huge interest in offshore development As for onshore turbines, the wind regime, where the offshore turbines are sited determining the production of power, is the single most important factor for the cost per generated unit of power In general, the wind regime offshore is characterized by high Increase in cumulative capacity 140 12000 120 10000 100 8000 80 % 14000 6000 60 40 2000 20 0 Year 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 4000 19 19 19 19 19 20 20 0 20 20 20 20 20 20 20 20 09 MW Annual installed capacity Year Figure 15 Development of wind power capacity in China (Left) Annual installed capacity (Right) Annual growth rates of cumulative capacity Source: GWEC (2010) http://www.ewea.org [1]; BTM consult ApS – A part of NAVIGANT (2010) World Market Update 2009, March [2] Wind Power Industry and Markets Belgium Ireland Netherlands 1% Finland 1% 11% China 1% 3% New capacity in 2009 350 300 United Kingdom 42% 250 MW Germany 3% Sweden 8% 667 200 150 100 50 Denmark 30% United Denmark Kingdom Sweden Germany China Figure 16 Offshore development (Left) Distribution of total installed capacity by the end of 2009 (Right) New installed capacity in 2009 Source: BTM consult ApS – A part of NAVIGANT (2010) World Market Update 2009, March [2] average wind speeds and more stability than onshore wind At the Danish Horns Reef wind farm, a wind speed corresponding to a utilization time of more than 4200 h yr−1 was measured (adjusted to a normal wind year), thus giving a capacity factor close to 50%, which is comparable to many smaller conventional power plants For most offshore wind farms, a utilization time of more than 3000 h yr−1 is to be expected, significantly higher than for onshore sited turbines and, therefore, to a certain extent compensating for the additional costs of offshore plants At present, more than 30 offshore wind farms with a total installed capacity of a little more than GW are in operation with a few exceptions, all located in the northern part of Europe The largest installation is in British waters where almost 900 MW are located corresponding to 43% of total offshore capacity In Denmark, a little more than 600 MW are installed corresponding to 31% of total offshore capacity, followed by the Netherlands (12%) and Sweden (8%) [11] The offshore development is shown in Figure 16 Denmark was the first country to examine the possibilities in offshore wind power, and already at the beginning of the 1990s, the wind farm Vindeby consisting of 11 machines of 450 kW was established This was followed by several small offshore wind farms; among these is Middelgrunden with a capacity of 40 MW located just outside Copenhagen The large Horn Reef offshore wind farm consisting of 80 machines of MW was established in 2002 The Danish Government is by now pursuing a tendering procedure in promoting offshore development The Anholt wind farm with a capacity of 400 MW was approved in 2010 and is expected to be on line by 2012 Then it will be the world largest offshore wind farm In Denmark, it is expected that by 2020 wind power supplies will be 50% of total electricity consumption The offshore development in the United Kingdom started back in 2000, where the Blyth cluster of two MW machines was erected The first real offshore wind farm was the North Hoyle in 2003 consisting of 30 turbines of MW Since then, quite a large number of wind farms of 60–100 MW have been established in British waters The United Kingdom has a large potential for offshore wind both at West and East shores The utilization of this potential is regulated by the Crown Estate, and a number of rounds for offshore exploitation have been launched Renewable obligation certificates (ROCs) are being used to support the development of renewables in the United Kingdom Offshore wind power is receiving 1.5–2 ROCs per MWh produced compared to the normal of ROC for on-land wind In the United Kingdom, 13 projects were awarded 32 GW at the beginning of 2010 in the Crown Estates Round [9] Although Germany had a hesitating start of offshore wind power development, in 2009 the Alpha Ventus project consisting of 10 turbines of MW was finalized By 2009, the legislation for offshore wind farms was also improved significantly in Germany, an improved feed-in tariff specifically for offshore came in place and grid companies were committed to establish and pay for the offshore transmission cable connecting the wind farm to land, which accounts for 15–20% of the total costs A huge number of offshore wind farms reaching a capacity of up to 10 GW or more are by now approved by the German authorities These wind farms typically have a size of 400 MW each Thus, although offshore wind power at present not account for more than 1.3% of total installed wind power capacity, a strong development in offshore is expected In a number of countries, offshore wind power projects are in the planning and implementation phase, as mentioned especially in Germany, the United Kingdom, and Denmark 2.20.8 Wind Turbine Manufacturers Thus, the pattern of growth in wind power is changing While the absolute annual installed capacity in the last couple of years has remained almost at a constant level in Germany, Spain (Spain experienced a strong growth in 2007, but has since shown a somewhat uneven growth), and India, the installed capacity in the United States and especially China has boomed Of course, these changing market perspectives are of utmost importance for the wind turbine manufacturers, the ‘old’ well-established European companies establishing subsidiaries in Asia and the United States, facing a still stronger competition from low-cost Asian manufacturers 668 Wind Power Industry and Markets Made (ES) Dewind (GE) 2% 2% Mitsubishi (JA) 1% Suzlon (IN) 2% Ecotechnia (ES) Enron (USA) 4% 6% Desarrollos (ES) Others 1% 4% Vestas (DK) 18% Gamesa (ES) 14% Nordex (GE/DK) 8% Bonus (DK) 11% NEG Micon (DK) 13% 2000 Enercon (GE) 14% Figure 17 Manufacturers share of total installed wind power capacity in year 2000 Source: BTM consult ApS – A part of NAVIGANT (2001) World Market Update 2000, March Looking at manufacturers by the year 2000, Europe had a dominating share (Figure 17) Of the 13 largest manufacturers, 10 manufacturers were located in Europe, supplying approximately 87% of the installed capacity [12] Observe that all European manufacturers were located in the three countries where most wind turbines were erected as well, namely Germany, Spain, and Denmark Thus, there seems to be a close correlation between markets and local/national industrial development By 2009 the picture had changed significantly Europe still has a strong position with a market share of 42%, but especially the United States and China have gained and by now have market shares of 15% and 27%, respectively Vestas still is the largest supplier with a market share of 13% in 2009, followed by GE Wind with a marginally lower market share of almost 13% However, a number of company merges have taken place in the period from 2000 to 2009 Vestas and NEG-Micon were merged in 2004 under the Vestas name (a total market share of 31%), and taking this into account, the company has lost significant market shares Bonus was bought by the German company Siemens, and continued under this name Enron is now GE Wind, Made was overtaken, Ecotechnia was acquired by Alstom in 1997 and now has the name Alstom Wind (Alstom Wind is too small to enter the figure and accounted as others) However, the largest difference is to be found in the numerous new Chinese manufacturers that have entered the market in recent years Figure 18 shows only the largest Chinese manufacturers, but in 2009, more than 20 Chinese companies were producing wind turbines to the domestic market [8] The Danish company ‘Vestas’ started its production of wind turbines back in 1979, where the first 55 kW machine was erected; a machine that actually got very popular not only in Denmark but also in the United States As mentioned, Vestas is today the market leader with a market share of 13% and a delivery of 4766 MW in 2009 – this is five times as much as in year 2000 Vestas produces a broad range of turbines, ranging from 850 kW to MW, all of a conventional three-bladed gear-box design A new large turbine, United Power (PRC) 2% Clipper Mingyang (USA) (PRC) 2% 2% Others Vestas (DK) 9% 13% 2009 Mitsubishi (JA) 2% Repower (GE) 4% Nordex (GE) 3% Siemens (DK) 6% Suzlon (IN) 7% Dongfang (PRC) 7% Gamesa (ES) 7% GE Wind (USA) 13% Sinovel (PRC) 9% Enercon (GE) 9% Goldwind (PRC) 7% Figure 18 Manufacturers share of total installed wind power capacity by year 2009 Source: BTM consult ApS – A part of NAVIGANT (2010) World Market Update 2009, March [2] Wind Power Industry and Markets 669 presumably of MW size, has been announced by the company to be on the way Vestas is a truly international company supplying almost all countries of the world Vestas has a headquarters in Denmark and subsidiaries in Spain, the United States, and China By 2009, approximately 58% of the production was delivered in Europe, 27% in the United States, and 14% in Asia The major part of Vestas’ production is supplied for on-land projects; however, the MW turbines are quite popular for offshore projects as well The US company ‘GE Wind’ is the second largest supplier with a 2009 market share of 13% and a delivery of 4741 MW GE has a very strong position in the US market where it has a market share of more than 45%, and therefore, the booming American market has been a significant driver for GE But also at the Canadian market, GE is one of the largest suppliers GE is present at a number of markets in Europe but has no dominating position outside North America GE has a product line consisting of conventional three-bladed gear-box machines ranging from 1.5 to 2.5 MW Especially, the 1.5 model has been very popular and a large number of these turbines have been erected The Chinese company ‘Sinovel’ became the third largest supplier in 2009 with a market share of 9% and a delivery of 3510 MW The company is a real newcomer, growing rapidly in recent years taking advantage of the booming wind power market in China Sinovel produces a 1.5 MW machine with different rotor diameters and a pitch-regulated MW machine all of conventional design The company has a market share of 25% in China in 2009 and only a small export, mainly to India [2] As Vestas the German company ‘Enercon’ is one of the pioneers within wind power and in 1992 their first gear-less turbine was erected Thus, Enercon is the manufacturer of direct-drive gear-less turbines and by the end of 2009 the company held fourth position with a market share of 9% and an installation of 3221 MW this year Enercon has a market share of more than 62% in Germany, but has also high market shares in other European countries such as Portugal, Italy, France, and Sweden Outside Europe, Enercon is especially doing well in Canada Enercon has a product line ranging from 1.8 to MW all direct-drive gear-less machines Chinese ‘Goldwind’ holds a 20% share of the Chinese market but for the time being is mainly a domestic supplier Spanish ‘Gamesa’ dominates the Spanish market with a share of 36% and is doing well in Italy and France ‘Siemens’ – German owned with production facilities mainly located in Denmark – is an undisputable number one in offshore wind power, only rivaled by Vestas At present, manufacturers are split with regard to two technological trends: a trend toward producing very large turbines and one toward direct-drive gear-less machines Among the manufacturers, Repower and Enercon are supplying MW turbines, Bard has a MW one, and Siemens has a very popular 3.6 MW machine Vestas has announced a MW machine to be on the way and American Clipper is building a 10 MW prototype in the United Kingdom [2] The competition between the direct-drive gear-less concept and the traditional gear-based concept is still going on As mentioned, German Enercon is a main driver in developing the direct-drive concept, but also Chinese Goldwind is producing a 1.5 MW direct-drive machine that has been sold in large numbers in China in 2009 Siemens launched a MW direct-drive turbine with permanent magnets in autumn 2009 Although, the majority of turbines are conventional ones, the direct-drive concept seems increasingly to attract interest among manufacturers References [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] GWEC (2010) http://www.ewea.org (Brussels, accessed March 2010) BTM-Consult (2010) World Market Update 2009, March BTM-Consult (2009) World Market Update 2008, March EWEA (2009) Wind Energy the Facts Earthscan, Brussels Nielsen P, Lemming J, Morthorst PE, et al (2010) Vindmøllers Økonomi (The Economics of Wind Turbines) Aalborg, Denmark: EMD EU Commission (2005) Communication from the Commission The support of electricity from renewable energy sources IEA (2008) Recabs-model Developed in the IEA Implementing Agreement on Renewable Energy Technology Deployment http://recabs.iea-retd.org/energy_calculator (Paris, accessed March 2010) OECD/IEA (2008) World Energy Outlook 2007 Paris, France: OECD and International Energy Agency Risø Energy Report (2006) Renewable energy for power and transport Risø, November BTM-Consult (2008) “Made in China”, Chinese wind power market assessment 2008–2012, Ringkjoebing, November BTM-Consult (2010b) Offshore report 2010 November BTM-Consult (2001) World Market Update 2000, March  ... 140 120 00 120 10000 100 8000 80 % 14000 6000 60 40 20 00 20 0 Year 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 4000 19 19 19 19 19 20 20 0 20 20 20 20 20 20 20 20 09... increase 50 35 30 GW 25 20 15 10 40 30 20 10 99 20 01 20 03 20 05 20 07 20 09 97 19 95 19 93 19 91 19 89 19 87 19 85 19 19 83 19 19 19 19 19 19 19 19 19 20 20 0 20 20 20 20 20 20 20 20 09 0 Year Year... 30000 25 000 20 000 15000 10000 5000 00 120 % 100 80 60 40 20 Year 1993 1994 1995 1996 1997 1998 1999 20 00 20 01 20 02 200 3 20 04 20 05 20 06 20 07 20 08 20 09 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20