There has been a significant expansion of wind energy by leaps and bounds during the last 20 years which commenced as a niche source of energy in the US and Europe and by 2019 has emerged as the mainstream source of clean, cost-effective energy around the world. 2019 was a watershed moment for the wind energy market around the world as it reached 651 GW cumulative installed capacity. The Americas, APAC, and Europe are poised to undergo strong growth. With the maturation of onshore wind technology, governments and international institutions have adopted offshore wind power generation means as the next turning-point facilitating the transition of energy.
Wind power is all set to play a central role in the attainment of a low-carbon or net-zero future. With regards to a net-zero future, it is important to note that it requires an entirely carbon-free energy sector and substantial reductions in emissions in all other sectors of the economy. Further, an IRENA scenario for a 1.5-degree compliant pathway by 2030, espouses: (a)an increase of global onshore wind power capacity by threefold, (b) an increase of global onshore wind power capacity by 10-fold and (c) mass scale electrification. However, for such ambitious goals of accelerated growth accounting for more than 100 GW in annual onshore and offshore wind installations over the next decade necessitates an industry-wide investment in a variety of areas which can bridge the increasing gap between top-down targets and the private sector’s capacity to deploy and invest at a suitable speed.
The favorable market status and dynamics that are poised to drive the growth of the global wind turbine market during the forecast period
The regional onshore market of the global wind industry was reported to be led by the APAC which had registered an installation during 2018 which was in the order of 27.3 GW. Despite the decrease in onshore installations in Germany by 55% during the same year, Europe witnessed a 30% YoY growth in new installations due to strong growth in Greece, Spain, and Sweden. Considering the developing markets of Africa, Latin America, South-East Asia, and the Middle East registered a combined installation of 4.5 GW during 2019 which is steady but unremarkable growth. Partly because of a leap in YoY installations by 45% in China, the year 2019 was marked by 6.1 GW of new additions, whereby the global market share of new installations occupied by China increased to 10% for the first time globally there were 60.4 GW of new installations which brought global cumulative wind power capacity up to 651 GW. The USA and China were the largest onshore markets with a combined contribution of than 60 % of new onshore additions. While the aforementioned was a brief snapshot of the market conditions leading up to 2019, the market dynamics entailed the preponderance of market-based mechanisms across the global wind market in 2019.
Thus, with regards to market dynamics, 2019 marked the launch of auctions by Colombia and China for the first time. Further, the year registered the auctioned wind capacity exceeding 40 GW which is more than the double amount reported during 2018 with 25 GW pertaining to the onshore generation and 15.8 GW being related to offshore generation. In continuance with technology innovation and economics of scale, an additional 30% reduction in costs of offshore wind was accomplished in the UK CfD Allocation Round 3 in comparison to CfD Round 2.
Further 2021 (January) onwards all newly approved onshore wind projects in China are slate to attain “grid parity”. Moreover, in 2019 new solutions (viz. hybridization) and new business models reportedly sustained the growth of wind energy. To augment the integration of wind and other renewables hybridization is increasingly being implemented in both mature and emerging markets. Further major stakeholders are in the wind industry are also mobilizing initiatives to facilitate industry collaboration with sectors Viz hydrogen to accelerate the global energy transition. Besides in 2018, the volume of signed corporate PPAs increased by approx. 30 % which led to the achievement of 9 GW at the global level. This the aforesaid partly reflects the extent to which wind power continues to develop its competitive advantage and is primed to take the lead in the energy transition.
Global Electricity Generation (Gwh) – Wind Power
Regional outlook that will influence the global market of wind turbine
With approximately 30,000 onshore turbines Germany occupies the leading position for installed capacity in Europe. In 2019, wind power was reportedly the dominant source in the power mix exceeding hard coal and lignite. Nevertheless, such achievements have been somewhat eclipsed by the slowing down wind power expansion in Germany. Concerning Thailand, it has cooperated on several renewable energy projects with the ADB (Asian Development Bank). The issuance of Thailand’s first green bond with assistance from the ADB will not only facilitate more private investment into renewables directly but also create more confidence in Thailand’s renewable energy potential. However, the Supreme Administrative Court of Thailand has ruled that agricultural reform land cannot be used for wind farms which poses a long-term challenge to wind farm developers in Thailand because it restricts the availability of land for potential developments. Secondly, most land plots in Thailand are small, and based on the Thai government’s regulation, adequate space is not available to set up wind turbines.
This necessitates clear policy and legal frameworks on land use to foster the national wind power generation capability. Considering the biggest economy in East Africa, Kenya currently has an installed wind capacity of 335MW. With the availability of private capital, electricity access of approx. 75 %, GDP growth around 6 %, geopolitical stability, and high penetration of financial institutions Kenya demonstrates strong headwinds for cleans energy. The fruition of the 310-MW Lake Turkana wind farm in march 2018 is an example of the aforesaid. Partly taking lessons from the success of the aforesaid, in February 2020 construction work on Africa’s first large-scale hybrid project has reportedly commenced. It is the USD 150 million 80 MW Meru County Energy Park project. It is poised to comprise 20 wind turbines and 40,000 solar panels and is being developed as a Public-Private Partnership.