GLOBAL WIND ENERGY OUTLOOK 2006

GLOBAL WIND ENERGY OUTLOOK 2006
GLOBAL WIND ENERGY
OUTLOOK 2006
SEPTEMBER 2006
2
Contents
EXECUTIVE SUMMARY
4
The Global Status of Wind Power | Drivers for Wind Energy | The World’s Wind Resources and Grid Integration |
The Environmental Impacts of Wind Power | Global Wind Energy Outlook Scenario | Energy Policy Issues and Recommendations
THE GLOBAL STATUS OF WIND POWER
8
Record Year in 2005 | Europe | North America | Asia | Latin America | Australasia | Africa | Offshore
DRIVERS FOR WIND ENERGY
16
Security of Supply | Environmental Concerns | Economics | Employment and local Development |
Technology and Industrial Development
THE WORLD’S WIND RESOURCES AND GRID INTEGRATION
22
Wind Resource Assessments | Variability and Grid Integration | Issues for Integrating Wind Power | Recent Studies
THE ENVIRONMENTAL IMPACTS OF WIND POWER
28
Visual Impact | Noise | Wildlife – Birds | Wildlife – Bats | Offshore Wind Farms
THE “GLOBAL WIND ENERGY OUTLOOK” SCENARIO
36
The Scenarios | Energy Efficiency Projections | Core Results | Detailed Results | Regional Breakdown |
Main Assumptions and Parameters | Costs and Benefits | Global Wind Energy Outlook – Research Background
ENERGY POLICY ISSUES AND RECOMMENDATIONS
50
Legally binding Targets for Renewable Energy | Specific Policy Mechanisms | Electricity Market Reform |
International Action on Climate Change | Reform of International Financing | Action by International Bodies | Policy Summary
ANNEX
2
58
Foreword
IN MANY PA RT S O F T H E WO R L D , wind energy has already
grown to be a mainstream energy source. This growth has long
been driven by concerns about global climate change, mainly
in the developed world and especially in Europe.
Climate change is a complicated and alarming predicament.
As devastating as Hurricanes Katrina and Rita may have been,
their wrath is nothing compared to the devastation that
climate change will wreak on our planet if governments fail to
address the world‘s fossil fuel addiction. Cutting greenhouse
gas emissions makes both environmental and economic
sense. The goal of climate policy should be to keep global
mean temperature rise to less than 2 ºC above pre-industrial
levels in order to avoid dramatic damage to ecosystems and
disruption to the climate system. To meet these targets, the world needs to fundamentally change the way it
generates and uses energy in the coming decade.
However, other challenges such as energy supply security and the volatility of fossil fuel prices have become just as
pressing, both in the OECD and in emerging market. Global energy needs are growing at a staggering rate world
wide. Over-reliance on energy imports from few, mostly politically unstable countries and volatile oil and gas
prices make for a shaky supply situation that is already inflicting massive drains on the global economy.
Wind energy is the most attractive solution to the world’s energy challenges. It is clean and fuel-free. Moreover, wind
is indigenous and enough wind blows across the globe to cope with the ever increasing electricity demand. This report
demonstrates that wind technology is not a dream for the future – it is real, it is mature and it can be deployed on a
large scale. Thanks to twenty years of technological progress, wind turbines have come a long way and a wind farm
today acts much more like a conventional power station. Moreover, wind power generation is increasingly competitive with conventional fossil fuel sources and already today is on a par with new coal or gas fired power stations.
Already now, wind energy is rapidly developing into a mainstream power source in many countries of the world,
with over 60,000 MW of installed capacity world wide and an average annual market growth rate of 28%. Wind
energy could provide as much as 29% of the world’s electricity needs by 2030, given the political will to promote
its large scale deployment paired with far-reaching energy efficiency measures.
The political choices of the coming years will determine the world’s environmental and economic situation for
many decades to come. While the industrialised world urgently needs to rethink its energy strategy, the developing
world should learn from past mistakes and build their economies on the strong foundation of sustainable energy
supply. For the sake of a sound environment, political stability and thriving economies, now is the time to commit
to a truly secure and sustainable energy future, built on clean technologies and promoting regional development
and the creation of millions of new jobs. The world cannot afford to stick to the ‘conventional’ energy development
path, relying on fossil fuels, nuclear and other outdated technologies from past centuries. Wind can and has to play
a leading role in the world’s energy future.
ARTHOURO S Z E RVO S
SVEN TESKE
Chairman – Global Wind Energy Council
Renewable Director – Greenpeace International
3
EXECUTIVE SUMMARY
4
EXECUTIVE SUMMARY
The Global Status of Wind Power
Drivers for Wind Energy
The global market for wind power has been expanding faster
The growth of the market for wind energy is being driven by a
than any other source of renewable energy. From just
number of factors. These have combined in a number of
4,800 MW in 1995 the world total has multiplied more than
regions of the world to encourage political support for the
twelve-fold to reach over 59,000 MW at the end of 2005.
industry’s development.
The international market is expected to have an annual
Security of supply: In the absence of committed energy
turnover in 2006 of more than € 13 billion, with an estimated
efficiency measures, the International Energy Agency (IEA)
150,000 people employed around the world. The success of
predicts that by 2030, the world’s energy needs will be
the industry has attracted investors from the mainstream
almost 60% higher than now. At the same time, supplies of
finance and traditional energy sectors.
fossil fuels are dwindling. Some of the major economies of
the world are having to rely increasingly on imported fuel,
In a number of countries the proportion of electricity
sometimes from regions of the world where conflict and
generated by wind power is now challenging conventional
political instability threaten the security of that supply. By
fuels. In Denmark, 20% of the country’s electricity is
contrast, wind energy is a massive indigenous power source
currently supplied by the wind. In Spain, the contribution has
which is permanently available, with no fuel costs, in virtually
reached 8%, and is set to rise to 15% by the end of the
every country in the world.
decade. These figures show that wind power is already able to
provide a significant input of carbon-free electricity. In 2005,
Environmental concerns: The impetus behind wind power
the global wind energy sector registered another record year,
expansion has come increasingly from the urgent need to
with a total of 11,531 MW of new capacity installed. This
combat global climate change. This is now accepted to be the
represented a 40.5% increase on an annual basis and a 24%
greatest environmental threat facing the world. Under the
cumulative growth.
1997 Kyoto Protocol, OECD member states are committed to
cut their CO₂ emissions by an average of 5.2%. In the
Wind power is now established as an energy source in over
developing world, more immediate concern comes from the
50 countries around the world. Those with the highest totals
direct environmental effects of burning fossil fuels, particu-
in 2005 were Germany (18,428 MW), Spain (10,027 MW),
larly air pollution.
the USA (9,149 MW), India (4,430 MW) and Denmark
(3,122 MW). A number of other countries, including Italy, the
Other environmental effects resulting from the range of fuels
UK, the Netherlands, China, Japan and Portugal, have reached
currently used to generate electricity include the dangers of
the 1,000 MW mark.
fossil fuel exploration and mining, pollution caused by
accidental oil spills and the health risks associated with
Although the wind power industry has up to now been most
radiation. Exploiting renewable sources of energy such as
dynamic in the countries of the European Union, this is
wind power avoids these risks and hazards.
changing. The United States and Canada are both experiencing a surge of activity, whilst new markets are opening
Economics: As the global market has grown, wind power has
up in Asia and South America. A new frontier for wind power
seen a dramatic fall in cost. A modern wind turbine annually
development has also been established in the sea, with
produces 180 times more electricity at less than half the cost
offshore wind parks beginning to make a contribution.
per unit (kWh) than its equivalent twenty years ago. At good
locations wind can compete with the cost of both coal and
gas-fired power. The competitiveness of wind power has been
further enhanced by the recent rise in the price of fossil fuels.
If the “external costs” associated with the pollution and
health effects resulting from fossil fuel and nuclear generation were fully taken into account, wind power would work
out even cheaper.
5
Wind energy also provides economic benefit through the
power could triple its power production by 2015, providing
employment which the industry generates. In the developing
14% of net electricity consumption, without any additional
world, off-grid wind power opens up economic opportunities
need for reserve or balancing power stations.
to dispersed communities.
Technology and industry: Since the 1980s, when the first
commercial wind turbines were deployed, their capacity,
The Environmental Impacts of
Wind Power
efficiency and visual design have all improved dramatically. A
modern wind turbine annually produces 180 times more elec-
The construction and operation of wind power, often in areas
tricity at less than half the cost per unit (kWh) than its
of open countryside, raises issues of visual impact, noise and
equivalent twenty years ago. The largest turbines being
the effect on local wildlife. These issues are usually addressed
manufactured now are of more than 5 MW capacity, with
through an environmental impact assessment.
rotor diameters of over 100 metres. Modern turbines are
modular and quick to install, whilst wind farms vary in size
Visual impact: Wind turbines are tall structures likely to be
from a few megawatts up to several hundred.
visible over a relatively wide area. While some people express
Wind energy has become big business. The major wind
scape, others see them as elegant and graceful, symbols of a
turbine manufacturers are commissioning multi-million
less polluted future.
concern about the effect wind turbines have on the land-
dollar factories around the world in order to satisfy demand.
Birds: Can be affected by wind energy development through
The World’s Wind Resources and
Grid Integration
loss of habitat, disturbance to their breeding areas and by
death or injury caused by the rotating turbine blades. Studies
from Europe and the United States have shown, however,
that the average rate of collision has been no more than two
Studies of the world’s wind resources have confirmed that
birds per turbine per year. These figures should be set against
these are extremely large and well distributed across almost
the millions of birds killed each year by power lines, pesti-
all regions and countries. Lack of wind is unlikely to be a
cides and road vehicles.
limiting factor on global wind power development.
Noise: Compared to road traffic, trains, construction
As the industry expands, large quantities of wind powered
activities and other sources of industrial noise, the sound
electricity will need to be integrated into the global grid
generated by wind turbines in operation is comparatively low.
network. The variability of the wind is not an issue which will
Better design and better insulation have made more recent
hinder this development, however.
wind turbine models much quieter. The approach of regulatory authorities has been to ensure that the turbines are
The already established control methods and backup capacity
positioned far enough away from nearby homes to avoid
available for dealing with variable demand and supply are more
unacceptable disturbance.
than adequate to handle the additional variable supply of wind
power at penetration levels up to around 20%. Above that, some
changes may be needed in power systems and their method of
operation. Improved forecasting techniques and increased
Global Wind Energy Outlook
Scenario
geographical dispersion of wind farms - ensuring that the wind is
always blowing somewhere - will both help integration.
The Global Wind Energy Outlook Scenario examines the
future potential for wind power up to the year 2050. Three
The potential for incorporating large amounts of wind power
different scenarios for wind power are assumed – a Reference
generation can be seen from the example of Denmark, where
scenario based on figures from the International Energy
20% of total electricity consumption can already be met by
Agency, a Moderate version assuming that current targets for
the wind. The DENA study in Germany concluded that wind
renewable energy are successful, and an Advanced version
6
EXECUTIVE SUMMARY
assuming that all policy options in favour of renewables have
been adopted. These are then set against two scenarios for
global energy demand. Under the Reference scenario, growth
Energy Policy Issues and
Recommendations
in demand is again based on IEA projections; under the High
Renewable technologies are disadvantaged by the failure to
Energy Efficiency version, a range of energy efficiency
penalise conventional fuels for the economic cost of their
measures result in a substantial reduction in demand.
pollution and other hazards - and by distortions in the world’s
The results show that wind energy can make a major
tural support to conventional technologies. Without political
electricity markets created by massive financial and struccontribution towards satisfying the global need for clean,
support, wind power cannot establish its positive contribu-
renewable electricity within the next 30 years and that its
tion towards environmental goals and security of supply.
penetration in the supply system can be substantially
increased if serious energy efficiency measures are imple-
AC T I O N I S N E E D E D I N T H E F O L LOW I N G A R E AS:
mented at the same time. Under the Reference wind power
scenario, wind energy would supply 5 % of the world’s
Targets for renewable energy: Setting targets will encourage
electricity by 2030 and 6.6 % by 2050. Under the Moderate
governments to develop the necessary regulatory frame-
scenario, wind energy’s contribution would range from
works to expand renewables, including financial frameworks,
15.6 % in 2030 to 17.7 % by 2050. Under the Advanced
grid access regulation, planning and administrative proce-
scenario, wind energy’s contribution to world electricity
dures.
demand would range from 29.1 % in 2030 up to 34.2 % by
2050.
Specific policy mechanisms: The market for generated
power needs to be clearly defined in national laws, including
All three scenarios assume that an increasing proportion of
stable, long term fiscal measures that minimise investor risk
new wind power capacity is installed in growing markets such
and ensure an adequate return on investment.
as South America, China, the Pacific and South Asia.
Electricity market reform: Reforms needed in the electricity
THE COST S A N D B E N E F I T S O F T H E S E S CE N A R I O S
sector to encourage renewable energy include the removal of
INCLUDE:
barriers to market entry, removing subsidies to fossil fuels
and nuclear and internalising the social and environmental
Investment: The annual investment value of the wind energy
costs of polluting energy.
market in 2030 will range from €21.2 billion under the
Reference scenario to €45 bn under the Moderate scenario
International action on climate change: Targets for a
and up to €84.8 bn under the Advanced scenario.
continuing reduction in greenhouse gas emissions must be
established beyond the present Kyoto period of 2008-12.
Generation costs: The cost of producing electricity from
wind energy is expected to fall to 3-3.8 €cents/kWh at a
Reform of international financing: Multi-lateral financing
good site and 4-6 €cents/kWh at a site with low average
mechanisms should include a defined and increasing
wind speeds by 2020.
percentage of lending directed to renewable energy projects,
coupled with a rapid phase out of support for conventional,
Employment: The number of jobs created by the wind energy
polluting energy projects.
market will range from 480,000 in 2030 under the Reference
scenario to 1.1 million under the Moderate scenario and to
Action by international bodies: The G8 bloc of countries and
2.1 million under the Advanced scenario.
the UN Commission on Sustainable Development should
support global renewables development.
Carbon dioxide savings: Savings will range from an annual
535 million tonnes CO₂ in 2030 under the Reference
scenario to 1,661 million tonnes under the Moderate scenario
to 3,100 million tonnes under the Advanced scenario.
7
THE GLOBAL STATUS OF WIND POWER
8
THE GLOBAL STATUS OF WIND POWER
Over the past decade the global market for wind power has
Record Year in 2005
been expanding faster than any other source of renewable
energy. Since the year 2000 the average annual increase in
Last year, the global wind energy sector registered another
cumulative installed capacity has been 28%. From just
record year. During 2005, a total of 11,531 MW of new
4,800 MW in 1995 the world total has multiplied more than
capacity was installed in more than 30 countries. This
twelve-fold in ten years to reach over 59,000 MW by the end
represented a 40.5% increase on an annual basis and a 24%
of 2005.
cumulative growth. At the end of 2005, the world’s total
installed wind power capacity stood at 59,084 MW.
The result is an international industry which is expected to
have an annual turnover in 2006 of more than 13 billion
Wind power is now established as an energy source in over
Euros. A substantial manufacturing industry has been created,
50 countries around the world. Those countries with the
with an estimated 150,000 people employed around the
highest total installed capacity are Germany (18,428 MW),
world. Such has been the success of the industry that it has
Spain (10,027 MW), the USA (9,149 MW), India (4,430 MW)
attracted an increasing number of investors from the
and Denmark (3,122 MW). A number of other countries,
mainstream finance and traditional energy sectors.
including Italy, the UK, the Netherlands, China, Japan and
Portugal, have reached the 1,000 MW mark.
In a number of countries the proportion of electricity
generated by wind power is now challenging conventional
Although the wind power industry has up to now been most
fuels. In Denmark, 20% of the country’s electricity is
dynamic in the countries of the European Union, this is
currently supplied by the wind. In northern Germany, wind
beginning to change. The United States and Canada are both
can contribute 35% of the supply. In Spain, Europe’s fifth
experiencing a surge of activity, whilst new markets are
largest country, the contribution has reached 8%, and is set
opening up in Asia and South America. In Asia, both China
to rise to 15% by the end of the decade.
and India registered a record level of expansion during 2005.
These figures show that wind power is already able to provide
Whilst most wind power development has so far been on
a significant input of carbon-free electricity.
land, pressures of space and the attraction of greater
productivity from a better wind regime have taken developers
offshore. Establishing wind energy projects in the sea has
opened up new demands, including the need for stronger
foundations, long underwater cables and larger individual
turbines, but offshore wind parks are expected to contribute
an increasing proportion of global capacity, especially in
northern Europe.
GLOBAL CUMULATIVE WIND POWER CAPACITY
60.000
50.000
[ MW ]
40.000
30.000
20.000
10.000
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
4,800
6,100
7,600
10,200
13,600
17,400
23,900
31,100
39,341
47,620
59,084
9
Another way to manage the growth in demand for wind
capacity in Europe by 2010, 180,000 MW by 2020 and
energy in areas with limited available land has been through
300,000 MW by 2030.
“repowering”. This involves replacing older, less efficient wind
turbines with a smaller number of more powerful recent
The leading country for wind energy in Europe is Germany.
models. Repowering is already gaining pace in a number of
Encouraged by successive laws, most recently the 2000
countries in which the wind industry has been established for
Renewable Energy Sources Act (updated in 2004), generators
ten years or more. These include Denmark, the UK, Germany
of wind power have been paid a premium tariff for their
and the US.
output, gradually reducing over a 20 year contract period.
This policy mechanism has proved extremely successful,
attracting a large number of small business investors, and
Europe
resulting in double digit annual growth rates since the 1990s.
The European Union still leads the world, with over
Wind projects also receive preferential treatment under
40,500 MW of installed wind capacity at the end of 2005,
German land planning law, with each local authority
representing 69% of the global total. This has already
expected to designate zones where wind parks will be encour-
achieved, five years ahead of time, the target set by the
aged. Wind power currently provides about 5.5% of German
European Commission for 40,000 MW by 2010.
electricity, with an installed capacity at the end of 2005 of
18,428 MW.
Wind energy expansion in the EU has been driven by individual member states’ policies to encourage renewable energy.
Although the rate of development on land in Germany has
These incorporate a range of financial incentives, including
already started to slow down, mainly due to a shortage of
investment grants and premium tariffs, with the aim of
available sites, this will be compensated for by the repower-
making a contribution towards the reduction of greenhouse
ing of older turbines and by a new offshore market in the
gas emissions. In 2001 an EU directive on renewable energy
North and Baltic Seas. A study by the German Environment
set each member state a target for the proportion of
Ministry (BMU) estimates that offshore wind power could
renewable energy it should achieve by 2010. The overall
reach a level of 12,000-15,000 MW by 2020.
European target is for 21% of electricity supply.
Spain has rapidly increased its wind power capacity since the
The European Wind Energy Association (EWEA) predicts that
mid-1990s, encouraged by a national premium tariff and
by 2010, wind energy alone will save enough greenhouse gas
policy based on regional industrial regeneration. In many
emissions to meet one third of the European Union’s Kyoto
provinces prospective developers have only been able to
obligation. EWEA’s current targets are for 75,000 MW of wind
access project sites if they first commit to establishing a
manufacturing base in the region. This has resulted in the
TOP( JAN.-DEC.
10 NEW INSTALLED
CAPACITY ( JAN.-DEC. 2005)
TO P 1 0 N E W I N S TALLED CAPACITY
2005)
Australia
France
UK
Italy
Rest of the world
China
Portugal
US
India
Spain
10
Germany
New capacity
US
Germany
Spain
India
Portugal
China
Italy
UK
France
Australia
Top 10 – Total
Rest of the world
World total
MW
2,431
1,808
1,764
1,430
500
498
452
446
367
328
10,024
1,507
11,531
%
21,1
15,7
15,3
12,4
4,3
4,3
3,9
3,9
3,2
2,8
86,9
13,1
100,0
THE GLOBAL STATUS OF WIND POWER
relatively poor but windy province of Navarra, for example,
North America
achieving major economic development and a contribution
from wind power now approaching 60% of its electricity
In 2005, nearly a quarter of new global capacity was installed
supply. In both the more densely populated provinces of
in North America, where the total increased by 37%. Wind
Castilla la Mancha and Galicia, the level has reached more
energy gained momentum in both the United States and
than 20%.
Canada.
Most of the wind turbines deployed in Spain are manufac-
The birthplace of large scale wind power deployment in
tured domestically. Last year a near record 1,764 MW of wind
California during the 1980s and early 1990s, the
turbines were commissioned, a 20% increase on 2004, and
United States is experiencing a revival which could soon see
saving the emission of an additional 19 million tonnes of carbon
it match the success of the European market leaders. With
dioxide. This took the Spanish total to just over 10,000 MW,
large open spaces available for development, many US states
enough to satisfy 8.25% of the country’s electricity demand. The
have an excellent wind regime and a growing demand for
Spanish government’s target is to reach more than 20,000 MW
energy that avoids the volatility of fossil fuel prices.
by 2010.
The US industry shattered all previous annual records in 2005
Denmark has been the pioneer of the European wind turbine
to install nearly 2,500 MW of new capacity. This brought the
manufacturing industry and continues to have the highest
country’s total wind generating capacity up to more than
penetration of wind power in its supply system. More than
9,100 MW. The industry is expected to turn in an even better
3,000 MW of capacity was operating by the end of 2005.
performance in 2006, with new installations likely to top
When the wind blows strongly, wind energy supplies more
3,000 MW.
than half the electricity in the western half of the country.
Projections by the national Transmission System Operator
Spreading out from its Californian base, there are now utility-
Energinet show that by 2010, electricity consumption in
scale developments across 31 US states. New wind farms
western Denmark could be regularly satisfied by a mixture of
completed in 2005 include twelve projects of 100 MW or
wind and small combined heat and power stations, without
more, ranging geographically from the 140 MW Maple Ridge
the need for centralised generation. In the 1990s, Denmark
project in New York to the 150 MW Hopkins Ridge project in
also pioneered the development of offshore wind farms, and
Washington state, in the Pacific Northwest. The largest single
still has the largest sea-based wind park in the world.
project completed last year was the 210 MW Horse Hollow
wind energy center in Texas. Texas added some 700 MW of
These market leaders are now being joined by a second wave
wind in 2005 – the largest amount of any state – bringing it
of countries, including Portugal, France, the UK, Italy, the
close to long-time national leader California.
Netherlands and Austria. In Portugal, strong government
policy supported by a fixed tariff payment system has seen
Growth in the US market is largely due to the current three
wind capacity grow from 100 MW in 2000 to over 1,000 MW
year window of stability provided by the federal incentive for
by the end of 2005. In Italy, which introduced a national
wind energy, the Production Tax Credit (PTC). For the first
target for renewable energy linked to a green certificate
time in the credit’s history, the US Congress extended the
trading system in 2001, wind capacity grew by 452 MW in
PTC before it expired, taking it through to the end of 2007.
2005 to reach more than 1,700 MW.
As a result, the wind industry is looking forward to several
record-breaking years in a row.
The potential of the ten new states which joined the
European Union in 2004 has still to be realised, but a number
of them, including Poland, Hungary and the Baltic States,
are expected to take off in the next few years.
11
Asia
The Asian continent is developing into one of the main powerhouses of wind energy development, accounting for 19% of new
installations in 2005. With a growth rate of over 46%, total
capacity in the region reached nearly 7,000 MW.
The strongest Asian market remains India, with the installation of
over 1,430 MW of new capacity last year taking its total to
4,430 MW. This pushed it into fourth position in the international
wind power league table. The Indian Wind Turbine Manufacturers
Association (IWTMA) expects between 1,500 and 1,800 MW to
be commissioned every year for the next three years.
Incentives are provided to the wind energy sector by the
Indian government in the form of tax breaks and tax
Failure to renew the PTC on time has previously seen a
reductions. The 2003 Electricity Act also established State
“roller-coaster” US market, with fallow years of falling
Electricity Regulatory Commissions in most states with a
investor confidence followed by brief boom periods. The
mandate to promote renewable energy through preferential
American Wind Energy Association (AWEA) is currently
tariffs and a minimum obligation on distribution companies
lobbying for a longer term extension of the incentive. With
to source a certain share of their electricity supply from
stable, supportive policies, wind energy could provide at least
renewables. Tariffs for grid connected wind farms vary from
6% of US electricity by 2020, according to the AWEA, a share
state to state.
similar to that of hydropower today. However a share of
more than 20% wind power is possible in the longer term.
Over the past few years, both the government and the wind
power industry have succeeded in injecting greater stability
Thanks to a mixture of federal incentives and initiatives by
into the Indian market. This has encouraged larger private
individual provinces to increase the contribution from
and public sector enterprises to invest. It has also stimulated
renewable energy, wind capacity in Canada increased by an
a stronger domestic manufacturing sector; some companies
impressive 54% in 2005 and now stands at 683 MW. This is
now source more than 80% of the components for their
enough to power more than 200,000 Canadian homes.
turbines in India. This has resulted in both more cost effective
production and additional local employment.
An important contributor to Canada’s vibrant market has
been the federal government’s Wind Power Production
The geographical spread of Indian wind power has so far been
Incentive (WPPI). In 2005, the WPPI was extended to 2010,
concentrated in a few regions, especially the southern state
and with the funds available increased to support up to
of Tamil Nadu, which accounts for more than half of all
4,000 MW of capacity. Several provinces have also imple-
installations. This is beginning to change, with other states,
mented policies to encourage wind projects, including utility
including Maharashtra, Gujarat, Rajasthan and Andhra
mandates for up to 2,000 MW of new wind farms.
Pradesh, starting to catch up. With the potential for up to
65,000 MW of wind capacity across the country (IWTMA
As a result of these policy measures, 2006 is expected to see
estimate), progress in India should be further accelerated
at least 500 MW of wind projects commissioned. The
over the next decade.
Canadian Wind Energy Association estimates that more than
8,000 MW could be in place by 2015.
With its large land mass and long coastline, China is rich in
wind energy potential. The Chinese Meteorology Research
Institute estimates the land-based exploitable wind resource
to have the potential for 253 GW of capacity. A further 750
GW could be provided by offshore projects.
12
THE GLOBAL STATUS OF WIND POWER
The current goal for wind power in China is to reach
5,000 MW by the end of 2010. Looking further ahead, 30 GW
of wind power has been proposed by the Chinese government
in its long term planning up to 2020. By the end of that year
it is estimated that, in order to satisfy growing demand, total
power capacity in China will have reached 1,000 GW. Wind
generated electricity would by then represent 1.5% of total
power production.
The wind energy industry in Japan has also been expanding,
partly spurred by a government requirement for electricity
companies to source an increasing percentage of their supply
from renewables (Renewable Portfolio Standard-type law),
partly by the introduction of market incentives. These include
both a premium price for the output from renewable plants
and capital grants towards clean energy projects. The result
The first Chinese wind farm went on line in 1986 as a
has been an increase in Japan’s installed capacity from
demonstration project. By the end of 2005, total installations
461 MW at the end of fiscal year 2002 to more than
in mainland China had reached 1,260 MW, representing an
1,000 MW by March 2006.
annual growth of 60%.
The official government target for wind power in Japan is
Chinese government policy has been to encourage the
3,000 MW by 2010. The main factors which could delay this
localisation of wind turbine manufacture, thus reducing costs
being achieved are the relatively low level of the RPS
so that wind power can compete with fossil fuel generation.
percentage target and the difficulties encountered by some
China’s power generation industry is currently dominated by
wind projects because of turbulent and unstable weather
coal-fired power stations, which cause air pollution and other
conditions, especially in mountainous regions.
environmental problems. To establish a domestic turbine
manufacturing industry, the National Development and
South Korea and Taiwan have also experienced strong
Reform Commission (NDRC) therefore promoted the idea of
growth in 2005, with close to 100 MW of installed capacity
Wind Power Concessions for large scale commercial
each by the end of the year. The Philippines are estimated to
development. Under the concession process local authorities
have the highest wind energy potential in the Southeast
invite investors, both international and domestic, to develop
Asian region, although only one wind farm of 25 MW had
100 MW size wind farms at potential sites, with a tendering
been installed by December 2005. The Philippines govern-
procedure aimed at bringing down the generating cost and
ment has set a target of 417 MW within ten years, while the
increasing the proportion of locally made components. One
US-based National Renewable energy Laboratory has
rule is that 70% of components must be made in China.
concluded that the country could support over 70,000 MW
of installed capacity, delivering more than 195 billion kWh
Most recently, the wind power market in China has been
per year.
significantly boosted by a new Renewable Energy Law, which
came into force at the beginning of 2006. The aim of this law
is to establish a national target for renewable development
and to adopt a national supportive tariff system. As a result, a
large number of international companies have launched joint
ventures with Chinese companies and are setting up
manufacturing and assembly outlets.
13
Latin America
tion Law aimed at establishing a programme with a target for
renewables to supply 8% of national power production by
Although there has been little activity in Latin America to
2012 (excluding large hydro). The law also provides for the
date, a number of governments are in the process of
creation of a trust to support renewable energy projects, rural
implementing renewable energy laws or programmes, and
electrification, biofuels and technological R&D.
wind energy is expected to develop at a strong rate in the
coming years.
Other countries with potential for wind energy in Latin
America and the Caribbean are Argentina, Chile, Costa Rica,
High oil prices, electricity shortages and air pollution
Nicaragua, Uruguay, Colombia, the Dominican Republic and
problems have put pressure on the government in Brazil to
Jamaica.
look for sustainable solutions through ethanol, biomass,
hydroelectricity, wind and solar power. Wind power matches
well the profile of the country’s existing hydroelectric plants,
Australasia
especially in the north-east, where high winds coincide with
low rainfall and provide a high load factor. According to a
Australia enjoys one of the best wind resources in the world,
wind atlas published by the Brazilian Ministry for Mines and
resulting in phenomenal capacity factors in many regions
Energy (MME) in 2001,,the country’s total wind potential is
with predominantly open farmland. Growth of the country’s
estimated at 143 GW, even when only sites with wind speeds
installed capacity almost doubled in 2005, with the addition
above 7 m/s (metres per second) are considered.
of 328 MW, taking the total to 708 MW. At the same time
approximately 6,000 MW of projects are in various stages of
In 2002 the Brazilian government introduced the PROINFA
pre-construction development.
programme to stimulate the development of biomass, wind
and small hydro generation. Its initial target was to imple-
The main national incentive for wind energy is the Mandatory
ment 3,300 MW of projects by the end of 2006. Power from
Renewable Energy Target, which has a modest goal for 9,500
renewable generators is bought by the Brazilian state-
GWh of renewables generation by 2010 – a little over 1% of
controlled electricity utility Eletrobrás under 20 year power
Australia’s electricity demand. The Australian Wind Energy
purchase agreements, with a guaranteed purchase price and
Association (Auswind) has called for this to be increased to
project financing available through the Brazilian National
10%.
Development Bank (BNDES). Domestic suppliers must
account for 60% of the equipment and construction costs.
Although some individual states are planning to introduce
Due to its limited market perspective, with a short timescale
more ambitious incentive schemes, such as the Victoria state
for the programme and no follow-up in sight, PROINFA did
government’s target for 10% of renewable energy capacity by
not, however, trigger the desired investment in additional
2010, Auswind argues that federal policy needs to recognise
manufacturing plants. With an effective monopoly in
that wind energy is a mature technology which requires
electricity supply, considerable bureaucracy and lack of
specific mechanisms to address the price gap between it and
infrastructure, the cost of installing wind power has been
that of conventional fossil fuel generation. The industry
relatively high (about US$2,000/kW). Progress has therefore
believes that nationally, at least 600 MW of new annual
been slow, and the first PROINFA wind farms are only now
capacity is required for the renewable energy industry to
beginning to be built. Total wind power capacity in Brazil is
continue growing and for Australia to maintain a wind energy
expected to increase from 28 MW in 2005 to about 200 MW
manufacturing base.
in 2006.
Although only 168 MW of wind capacity was installed by the
Despite having only two small wind farms in operation, the
end of 2005, New Zealand is equally poised to become a
Mexican Wind Energy Association projects that Mexico could
dynamic market. After a quiet period, almost 1,000 MW of
see at least 3,000 MW of capacity installed over the period
projects have consent to start construction, with the
2006-2014. One reason is the passage through the Mexican
potential for 2,000 MW of future capacity to follow on.
Congress in December 2005 of a Renewable Energy Utilisa-
14
THE GLOBAL STATUS OF WIND POWER
Africa
The potential for large scale wind power development in
Africa is concentrated in the north and the south, with
relatively low wind speeds experienced in the central belt.
In the north, there has been development in Morocco, with
64 MW installed and a national action plan to install
600 MW by 2010, whilst Tunisia is waiting for its first 60 MW
project to come to fruition. The most successful country has
been Egypt, where several large wind farms have been
constructed within an 80 km2 designated zone at Zafarana on
the Gulf of Suez. Most of these have been completed with
the support of European government aid agencies. A further
area of 700 km2 at Gabal El-Zayt on the Gulf has now been
earmarked to host a 3,000 MW wind farm. This site enjoys an
excellent average wind speed of 10.5 metres/sec.
The UK has also taken on a leading role, with 214 MW
already built in four locations, a further 1,000 MW+ with
From a current level of 145 MW, the Egyptian government’s
agreement to proceed across eight sites, and even larger
New and Renewable Energy Authority is looking for the
individual projects (of up to 1,000 MW each) planned within
country to install 850 MW by 2010. By 2020-25 the total
three strategic offshore areas identified by the UK govern-
could have reached 2,750 MW.
ment.
In the south, South Africa saw its first small installation in
Other offshore wind farms have been built around the coasts
2002, but larger projects have yet to be encouraged by the
of Sweden and Ireland, with the total installed capacity in
right market incentives.
Europe reaching 680 MW at the end of 2005. Further
developments are planned or under construction off the
Offshore
coasts of the Netherlands, Belgium, France and Spain. In the
United States, offshore sites are progressing through the
planning stages off the east coast and off Texas in the Gulf of
The possibility of locating wind turbines in the sea bed has
Mexico.
opened up a new frontier for wind power, especially in the
countries of northern Europe, where the availability of
Installing wind turbines in the sea has proved more expensive
relatively shallow coastal waters has combined with the need
than anticipated, however, and a number of projects are
to find space for much larger projects than are possible on
currently on hold whilst their economics are re-assessed. One
land.
factor which is expected to improve the viability of offshore
wind farms is the commercial deployment of the new
The pioneer in offshore wind farming has been Denmark,
generation of larger capacity turbines (over 5 MW). Another
which has installed the two largest wind parks in the sea –
issue to be resolved is how the costs of building new grid con-
160 MW at Horns Rev in the North Sea and 158 MW at
nection cables out to sea will be shared between the
Nysted in the Baltic. Two further large developments at the
developers and the electricity supply industry.
same sites are now progressing.
15
DRIVERS FOR WIND ENERGY
16
DRIVERS FOR WIND ENERGY
The growth of the market for wind energy is being driven by a
The potential effect of energy saving on global demand could
number of factors, including the wider context of energy
be considerable, however. According to the study by Ecofys
supply and demand, the rising profile of environmental issues
and DLR used in this report, electricity demand could increase
and the impressive improvements in the technology itself.
by only 30% by 2030, if a wide range of technologies and
These factors have combined in a number of regions of the
initiatives were introduced. Although this ‘High energy
world to encourage political support for the industry’s
efficiency’ scenario recognises the limitations set by cost and
development.
other obstacles, global electricity demand would be 39%
lower in 2030 than currently estimated by the IEA’s Reference
Security of Supply
scenario.
Just as energy demand continues to increase, in the absence
Global demand for energy is increasing at a breathtaking
of such efficiency measures, supplies of the main fossil fuels
pace. The International Energy Agency (IEA) predicts that by
used in power generation, especially gas, are dwindling. One
2030, the world’s energy needs will be almost 60% higher
result is that some of the major economies of the world are
than now. Two-thirds of this increase will occur in China, India
having to rely increasingly on imported fuel, sometimes from
and other rapidly developing economies; these countries will
regions of the world where conflict and political instability
account for almost half of global energy consumption by
threaten the security of that supply.
2030.
In Europe, sources of indigenous oil and gas, mainly from the
If this sharp increase in world energy demand actually takes
North Sea, are in rapid decline. At present, 50% of Europe’s
place, it would require significant investment in new
energy supplies are imported. Within two decades this is
generating capacity and grid infrastructure, especially in the
expected to increase to 70%. Even uranium, which currently
developing world. The IEA estimates that the global power
supplies the fuel for over 30% of European electricity, has a
sector will need to build some 4,800 GW of new capacity
global lifetime estimated at no more than 40 years, whilst
between now and 2030. This will require investment of
the EU countries contain less than 2% of the world’s uranium
approximately US$2 trillion (€1.7 trillion) in power generation
reserves.
and US$1.8 trillion in transmission and distribution networks.
Driven by these pressures, the last two years have seen
Industrialised countries face a different but parallel situation.
unprecedented increases in the prices of both oil and gas. Oil
Whilst demand is increasing, the days of overcapacity in
has risen from a range of $25 - $35 a barrel in 2004 to a peak
electricity production are coming to an end. Many older
of more than $70, with the expectation that the price will
power plants will soon reach the end of their working lives.
remain high for some years to come. Rising gas wholesale
The IEA predicts that by 2030, over 2,000 GW of power
costs have seen domestic electricity prices increase across
generation capacity will need to be built in the OECD
Europe; in the UK average domestic energy bills have risen
countries, including the replacement of retiring plants.
since 2003 by 63% for gas and 44% for electricity.
Without energy efficiency measures, electricity demand in
Analysts point out that the cumulative increase in real crude
the European Union is expected to increase by 51% between
oil prices since 2002 is close to that of the oil shocks of the
2000 and 2030, requiring investments in power generation
1970s, which produced two global recessions and an
of around €625 billion (US$ 760 billion). About half of this is
unprecedented surge in inflation. Increasingly, governments
needed for the replacement of existing power plants.
around the world are waking up to the threat that the current
shaky supply situation is posing to their economic growth.
17
By contrast to the uncertainties surrounding supplies of
The main international driver for combating climate change
conventional fuels, and volatile prices, wind energy is a
has been the 1997 Kyoto Protocol. This set national targets
massive indigenous power source which is permanently
for OECD member states to cut their CO₂ emissions by an
available in virtually every country in the world. There are no
average of 5.2% from their 1990 levels by 2012. Combating
fuel costs, no geo-political risk and no supply dependence on
climate change is only a secondary driver for wind energy in
imported fuels from politically unstable regions.
the developing world, however. More immediate concern
comes from the direct environmental effects of burning fossil
Environmental Concerns
fuels, particularly air pollution. This is a major issue in
countries like India and China, which use large quantities of
coal for power generation.
The impetus behind wind power expansion has come increasingly from the urgent need to combat global climate change.
Other environmental effects resulting from the range of fuels
This is now accepted to be the greatest environmental threat
currently used to generate electricity include the landscape
facing the world. The UN’s Intergovernmental Panel on Climate
degradation and dangers of fossil fuel exploration and mining,
Change projects that average temperatures around the world
the pollution caused by accidental oil spills and the health
will increase by up to 5.8°C over the coming century. This is
risks associated with radiation produced by the routine
predicted to result in a wide range of climate shifts, including
operation and waste management of the nuclear fuel cycle.
melting of the polar ice caps, flooding of low-lying land, storms,
Exploiting renewable sources of energy, including wind
droughts and violent changes in weather patterns. Responsibility
power, avoids these risks and hazards.
for climate change lies with the excessive build-up of greenhouse gases in the atmosphere, a trend encouraged by the
world’s growing industrialisation. Within energy use, the main
Economics
culprit is fossil fuels, whose combustion produces carbon dioxide,
one of the main greenhouse gases.
As the global market has grown, wind power has seen a
dramatic fall in cost. A modern wind turbine annually
A shift in the way the world produces and consumes energy is
produces 180 times more electricity and at less than half the
therefore essential. Alongside more efficient use of energy,
cost per unit (kWh) than its equivalent twenty years ago. At
renewable sources of energy offer the potential for deep cuts
good locations wind can compete with the cost of both coal
in carbon dioxide emissions.
and gas-fired power.
18
DRIVERS FOR WIND ENERGY
The cost of wind power generation falls as the average wind
double, and that from gas increase by 30%, if their external
speed rises. Analysis by industry magazine Windpower
costs associated with the environment and health were taken
Monthly (Jan 2006) shows that at a site with an average
into account.
wind speed of more than 7 metres per second, and a capital
cost per installed kilowatt of approximately € 1,000, wind is
The polluting effect of fossil fuels has now been reflected
already cheaper than gas, coal and nuclear.
through carbon reduction measures such as the European
Union’s emissions trading scheme, which sets a limit on the
The competitiveness of wind power has been further
amount of carbon dioxide which can be emitted by all major
enhanced by the recent rise in the price of fossil fuels, in
industrial enterprises.
particular the gas used to fuel power stations. In the United
States, this has made wind generated electricity an increasingly attractive option for power utilities faced with rising
costs. Against the volatility of conventional electricity costs,
Employment and Local
Development
wind offers an energy source which has no fuel element and
is unaffected by world trade issues.
Wind energy also provides economic benefit through the
employment which the industry generates. Manufacturing
Direct cost comparisons between wind power and other
wind turbines and their components offers major job
generation technologies are misleading, however, because
opportunities, often building on existing engineering skills
they do not account for the “external costs” to society and
and raw materials. In rural areas, wind energy can bring
the environment derived from burning fossil fuels or from
investment and jobs to isolated communities; hosting wind
nuclear generation. These external costs, including the effects
farms provides farmers with a steady income whilst they
of air pollution and radiation emissions, are not included in
continue to graze or crop their land.
electricity prices.
Employment levels vary from country to country, but the
The pan-European study, known as the “ExternE” project,
German Wind Energy Association (BWE) estimates the
conducted across all 15 original EU member states, has
number of jobs created in Germany by the end of 2005 at
assessed these costs for a range of fuels. Its latest results,
64,000. The Global Wind Energy Council estimates total
published in 2002, showed wind power as having the lowest
worldwide employment at more than 150,000.
range of these hidden costs - 0.15 to 0.25 € cents/kWh –
compared to 2 to 15 € cents/kWh for coal. The study
A recent study in the US by the government’s National
concluded that the cost of electricity from coal or oil would
Renewable Energy Laboratory concluded that investment in
19
wind power had a greater economic impact on the rural
Wind turbines have also grown larger and taller. The
regions where it was developed - through new jobs, income
generators in the largest modern turbines are 100 times the
and taxes - than a fossil fuel power station.
size of those in 1980. Over the same period, their rotor
diameters have increased eight-fold. Manufacture of wind
In the developing world, wind power is attractive as a means
turbines has benefited from increasing understanding of their
of providing a cheap and flexible electricity supply to
aerodynamics and load factors and from the economic
dispersed communities, often through off-grid stand-alone
benefits of mass production techniques.
systems. Its effect on economic development can be
dramatic. Supplying enough power for just basic lighting and
Complete wind turbines and their support components are
a television or computer can make a substantial difference to
manufactured in factories now spread throughout Europe and
domestic life, educational opportunities and the viability of
the world. The leading turbine manufacturers are based in
small businesses.
Denmark, Germany, Spain, the United States, India and Japan.
Technology and Industrial
Development
The largest turbines being manufactured today are of more
than 5 MW capacity, with rotor diameters of over 100 metres. One result is that many fewer turbines are required to
achieve the same power output, saving land use. Depending
Since the 1980s, when the first commercial wind turbines
on its siting, a 1 MW turbine can produce enough electricity
were deployed, their capacity, efficiency and visual design
for up to 650 households. Overall, wind turbines have a
have all improved enormously.
design lifetime of 20-25 years.
The most dramatic improvement has been in the increasing
Modern turbines are modular and quick to install; the
size and performance of wind turbines. From machines of just
construction process can take a matter of months. This is of
25 kW twenty-five years ago, the commercial size range sold
particular importance for countries in need of a rapid increase
today is typically from 750 up to 2,500 kW (2.5 MW). Each
in electricity generation. Wind farms can vary in size from a
2 MW turbine produces more energy than 200 of the 1980s
few megawatts up to several hundred. The largest wind farm
vintage machines.
in the world is the 300 MW Stateline development which
links the two states of Oregon and Washington in the northwestern United States.
20
DRIVERS FOR WIND ENERGY
The variability of the wind has produced far fewer problems
THE ADVANTAGES OF WIND POWER
for electricity grid management than sceptics had anticipated. On windy winter nights, for example, wind turbines
can account for the majority of power generation in the
• Low cost – can be competitive with nuclear, coal and gas
on a level playing field
western part of Denmark, and the grid operators are able to
• The fuel is free, abundant and inexhaustible
manage this successfully.
• Clean energy - no resulting carbon dioxide emissions
• Provides a hedge against fuel price volatility
As its economic attraction has increased, wind energy has
• Security of supply - avoids reliance on imported fuels
become big business. The major wind turbine manufacturers
• Modular and rapid to install
are now commissioning multi-million dollar factories around
• Provides bulk power equivalent to conventional sources
the world in order to satisfy demand.
• Land friendly - agricultural/industrial activity can continue
around it
Most importantly, the wind energy business is attracting
serious interest from outside investors. In 2002, for instance,
turbine manufacturer Enron Wind was bought by a division of
General Electric, one of the world’s largest corporations. This
lead was followed by Siemens, which took over Danish
manufacturer Bonus Energy in 2004. On the electricity
supply side, several large conventional power companies
have now become major owners of wind farms. These include
Florida Power and Light in the United States and the Spanish
utility Iberdrola, both with more than 3,500 MW of capacity.
Just as significant is the decision by a number of oil companies to take a stake in wind power. Shell’s renewables division,
for example, has already invested in 740 MW of wind power
capacity, mainly in the US. These acquisitions are evidence
that wind is becoming established in the mainstream of the
energy market.
21
THE WORLD’S WIND RESOURCES
AND GRID INTEGRATION
22
THE WORLD’S WIND RESOURCES AND GRID INTEGRATION
Wind Resource Assessments
balloon-launch monitoring stations to determine global wind
speeds at 80 metres above ground level, they found that
Few studies have been made of the world’s wind resources,
nearly 13% had an average wind speed above 6.9 metres per
with the most detailed research confined to the continent of
second (Class 3), more than adequate for power generation.
Europe and the US. However, those assessments which have
been carried out confirm that the world’s wind resources are
North America was found to have the greatest wind power
extremely large and well distributed across almost all regions
potential, although some of the strongest winds were
and countries. Lack of wind is unlikely to be a limiting factor
observed in Northern Europe, whilst the southern tip of
on global wind power development. When specific analysis
South America and the Australian island of Tasmania also
has been produced on individual countries or regions, this has
recorded significant and sustained strong winds.
often shown an even greater resource than the global picture
suggests.
The study did not take into account uncertainties such as
long-term variations and climatic effects, or practical
According to Michael Grubb and Neils Meyer in “Renewable
considerations such as site availability, access and transmis-
Energy Sources for Fuels and Electricity” (1994), the world’s
sion. Translated into electricity output, however, and using as
wind resources have the capacity to generate 53,000 TWh of
little as 20% of the potential resource for power generation,
electricity per year. This is almost three times the Interna-
the report concluded that wind energy could satisfy the
tional Energy Agency’s (IEA) figure for global electricity
world’s electricity demand seven times over.
consumption in 2003 (13,663 TWh).
Looking in more detail at the solar and wind resource in 13
A study by the German Advisory Council on Global Change
developing countries, the SWERA (Solar and Wind Energy
(WBGU), “World in Transition – Towards Sustainable Energy
Resource Assessment) project, supported by the United
Systems” (2003) calculated that the global technical
Nations Environment Programme, has found the potential,
potential for energy production from both onshore and
among other examples, for 7,000 MW of wind capacity in
offshore wind installations was 278,000 TWh per year. The
Guatemala and 26,000 MW in Sri Lanka. Neither country has
report then assumed that only 10–15% of this potential
yet started to seriously exploit this large resource.
would be realisable in a sustainable fashion, and arrived at a
figure of approximately 39,000 TWh per year as the
contribution from wind energy in the long term. This
Variability and Grid Integration
represented 35% of the 1998 figure for total world primary
energy demand (112,000 TWh) used by the study.
Wind power is often described as an “intermittent” energy
source, and therefore unreliable. In fact, at a system level,
The WBGU calculations of the technical potential were based
wind does not start and stop at irregular intervals, so the
on average values of wind speeds from meteorological data
term “intermittent” is misleading. The output of the
collected over a 14 year period (1979–1992). They also
aggregated wind power capacity is variable, just as the power
assumed that advanced multi-megawatt wind energy
system itself is inherently variable.
converters would be used. Limitations to the potential came
through excluding all urban areas and natural features such
Electricity flows – both supply and demand – are influenced by
as forests, wetlands, nature reserves, glaciers and sand dunes.
a large number of planned and unplanned factors. Changing
Agriculture, on the other hand, was not regarded as competi-
weather makes people switch their heating and lighting on and
tion for wind energy in terms of land use.
off, millions of consumers expect instant power for TVs and
computers. On the supply side, when a large power station
More recently, researchers from the Global Climate and
goes offline, whether by accident or planned shutdown, it does
Energy Project at Stanford University, California estimated
so instantaneously, causing an immediate loss of many
that the world’s wind resources can generate more than
hundreds of megawatts. By contrast, wind energy does not
enough power to satisfy total global energy demand. After
suddenly trip off the system. Variations are smoother because
collecting measurements from 7,500 surface and 500
there are hundreds or thousands of units rather than a few
23
large power stations, making it easier for the system operator
The present levels of wind power connected to electricity
to predict and manage changes in supply. There is little overall
systems already show that it is feasible to integrate the
impact if the wind stops blowing in one particular place,
technology to a significant extent. Experience with more than
because it is always blowing somewhere else.
40 GW installed in Europe, for example, has shown where
areas of high, medium and low penetration levels take place
Power systems have always had to deal with these sudden
in different conditions, and which bottlenecks and challenges
output variations from large power plants, and the proce-
occur.
dures put in place can be applied to deal with variations in
wind power production as well. The issue is therefore not one
For small penetration levels, grid operation will not be
of variability in itself, but how to predict, manage and
affected to any significant extent. Wind power supplies less
ameliorate this variability, and what tools can be used to
than 3% of overall EU electricity demand at present,
improve efficiency.
although there are large regional and national variations. The
already established control methods and backup capacity
The challenge in many parts of the world is that there is no
available for dealing with variable demand and supply are
regulatory or physical grid structure in place to allow the full
more than adequate to handle the additional variable supply
exploitation of the vast global wind reserves. These will have
of wind power at penetration levels up to around 20%. Above
to be developed at significant cost, although large invest-
that, some changes may be needed in power systems and
ment would be involved whichever generation option was
their method of operation.
chosen.
The integration of large amounts of wind power is often
In the present situation wind power is disadvantaged in
dismissed as impossible, and many grid operators are
relation to conventional sources, whose infrastructure has
reluctant to make changes to their long established proce-
been largely developed under national vertically integrated
dures. In Denmark, however, 21% of total electricity
monopolies which were able to finance grid network
consumption was met by wind power in 2004. In the western
improvements through state subsidies and levies on
half of the country, up to 25% of demand is met by wind
electricity bills. But whilst a more liberalised market has
power and, on some occasions, it has been able to cover
closed off those options in some countries, numerous
100% of instantaneous demand.
distortions continue to disadvantage renewable generators in
the power market – from discriminatory connection charges
to potential abuse of their dominant power by major
companies.
“Seven or eight years ago, we said that the electricity
system could not function if wind power increased above
500 MW. Now we are handling almost five times as much.
And I would like to tell the government and the parliament
Grid Integration
One of the biggest mistakes often made during public
discussion about integrating wind energy into the electricity
network is that it is treated in isolation. An electricity system
is in practice much like a massive bath tub, with hundreds of
taps (power stations) providing the input and millions of plug
holes (consumers) draining the output. The taps and plugs are
opening and closing all the time. For the grid operators, the
task is to make sure there is enough water in the bath to
maintain system security. It is therefore the combined effects
of all technologies, as well as the demand patterns, that
matter.
24
that we are ready to handle even more, but it requires that
we are allowed to use the right tools to manage the
system.“
HANS SCHI ØTT, CHAIRMAN OF ELTRA ,
THE TSO (TRANSMISSION SYSTEM OPERATOR)
FOR WEST DENMARK, IN 2003
THE WORLD’S WIND RESOURCES AND GRID INTEGRATION
Issues for Integrating Wind Power
Despite these successful experiences, a number of issues still
have to be addressed if large quantities of wind power are to
be successfully integrated into the grid network. These issues
relate to system operation, grid connection, system stability
and infrastructure improvements.
SYSTEM O P E R AT I O N
At first sight wind energy appears to present a difficult
challenge for the power system, often resulting in high
estimates for ancillary service costs or assumptions that wind
capacity must be “backed up” with large amounts of
conventional generation. However, such assessments often
overlook key factors. These include:
• Grid systems are designed to routinely cope with varying
In Germany, the level of reserve capacity being kept available
and uncertain demand, and unexpected transmission and
has decreased at the same time as wind power has increased.
generation outages.
Between 2002 and 2004, the level of “control power” kept
• Wind power output can be aggregated at a system level,
resulting in significant smoothing effects, which increase
with large scale geographic distribution of wind farms.
• Forecasting of wind power output in both hourly and day
ahead timeframes.
available fell from 8.3 GW to 7.3 GW. Over the same period an
additional 6 GW of wind capacity was installed.
SOURCE: “OFFSHORE WIND ENERGY:
IMPLEMENTING A NEW POWERHOUSE FOR EUROPE”,
GREENPEACE INTERNATIONAL 2005
Wind power will still have an impact on power system
reserves, the magnitude of which will depend on the power
Steady improvements are being made in forecasting tech-
system size, generation mix, load variations, demand size
niques. Using increasingly sophisticated weather forecasts,
management and degree of grid interconnection. Large
wind power generation models and statistical analysis, it is
power systems can take advantage of the natural diversity of
possible to predict generation from five minute to hourly
variable sources, however. They have flexible mechanisms to
intervals over timescales up to 72 hours in advance, and for
follow the varying load and plant outages that cannot always
seasonal and annual periods. Using current tools, the forecast
be accurately predicted.
error1 in predicted wind power for a single wind farm is
between 10 and 20 % for a forecast horizon of 36 hours. For
The need for additional reserve capacity with growing wind
regionally aggregated wind farms the forecast error is in the
penetration is in practice very modest, and up to significant
order of 10% for a day ahead and 5% for 1-4 hours in advance.
wind power penetrations, unpredicted imbalances can be
countered with reserves existing in the system. Several
The effects of geographical distribution can also be signifi-
national and regional studies indicate additional balancing
cant. Whereas a single turbine can experience power swings
costs in the order of 0 to 3 €/MWh for levels of wind power
from hour to hour of up to 60% of its capacity, monitoring by
up to 20%.
the German ISET research institute has shown that the
maximum hourly variation across 350 MW of aggregated
wind farms in Germany does not exceed 20%. Across a larger
area, such as the Nordel system covering four countries
(Finland, Sweden, Norway and Eastern Denmark), the
greatest hourly variations would be less than 10%.
1 RMSE normalised to installed wind power capacity
25
GRID CONNECTION A N D S Y S T E M S TA B I L I T Y
I N F R A S T R U C T U R E I M P ROV E M E N T S
Connecting wind farms to the transmission and distribution
Transmission and distribution grid infrastructure will need to
grids causes changes in the local grid voltage levels, and
be upgraded in order to accommodate large amounts of wind
careful voltage management is essential for the proper
power effectively. Expansion of wind power is not the only
operation of the network. All network system operators
driver, however. Extensions and reinforcements are needed to
therefore lay down “grid codes” which define the ways in
accommodate other power sources required to meet a
which generating stations connecting to the system must
rapidly growing electricity demand.
operate in order to maintain stability. These vary from
country to country, but cover such issues as voltage quality
On costs, a number of country-specific studies have indicated
and frequency control.
that the grid extension/reinforcement costs caused by
additional wind generation are in the range of 0.1 to
In response to increasing demands from TSOs, for example to
4.7€/ MWh, the higher value corresponding to a wind
stay connected to the system during a fault event, the most
penetration of 30% in the UK system. If these costs were
recent wind turbine designs have been substantially im-
properly “socialised” (paid for by the whole of society), the
proved. Most of the MW-size turbines being installed today
share for each consumer would be small. Added to this,
are capable of meeting the most severe grid code require-
increasing the share of wind power in electricity supply is
ments, with advanced features including fault-ride-through
likely to have a beneficial effect on the cost of power to end
capability. This enables them to assist in keeping the power
users, especially when the benefits of carbon dioxide
system stable, when large faults occur. Modern wind farms
reductions, health effects and environmental degradation are
are moving towards becoming wind energy power plants that
taken into account.
can be actively controlled.
26
THE WORLD’S WIND RESOURCES AND GRID INTEGRATION
Recent Studies
A number of recent studies have concluded that a large
contribution from wind energy to power generation needs is
technically and economically feasible, and in the same order
of magnitude as the contributions from conventional
technologies developed over the past century. The barriers to
increasing wind power penetration are not inherently
technical, they conclude, but mainly a matter of regulatory,
institutional and market modifications.
A study by the German Energy Agency (DENA) - “Planning
for grid integration of wind energy in Germany onshore
and offshore up to the year 2020” (2005) - concluded that:
• Wind energy in Germany could triple its power production
to 77 TWh in 2015, providing 14% of net electricity
• For large scale penetration of wind power, upgrades to the
consumption, without any need to build additional reserve
transmission grid infrastructure, including interconnec-
or balancing power stations. By 2015 there would be
tions, are needed. However, the benefits of these upgrades
26 GW of wind capacity installed on land and 10 GW
will apply to the entire power system. Additional grid
offshore.
reinforcement costs, as determined in several national
• Only minor expansion of the grid would be required. An
additional 850 km of extra high voltage lines would need
to be built by 2015, and a further 400 km upgraded. This
wind integration studies, are modest even at high wind
penetrations (0.1 – 4.5€/MWh).
• Modern wind energy technology can comply with grid
represents only about 5% of the existing network, and
requirements for maintaining supply security. Grid codes in
takes into account the expected expansion in offshore
the European member states need to be developed with
wind farms. The estimated investment cost of €1.1 billion
the specific technology in mind and must be implemented
would increase the price of electricity for consumers by
with care in order to avoid unnecessary costs.
less than €1 per household per annum.
• Adding wind power to the existing system is contributing
favourably to security of supply by virtue of reduced fuel
A detailed technical report by the European Wind Energy
dependence, technology diversification, indigenous
Association (EWEA) - “Large scale integration of wind
production and wind power’s capacity credit – the
energy in the European power supply” (2005) - concluded
proportion of its output which can provide firm supply.
that:
A report by the International Energy Agency – “Variability
• It is technically feasible for wind power to cover a
of Wind Power and Other Renewables: Management
significant share (up to 20%) of electricity demand in the
Options and Strategies” (2005) – confirmed that the
large interconnected power systems of Europe whilst
barriers to greater penetration of renewables into the existing
maintaining a high degree of system security, and at
grid were economic and regulatory rather than technical.
modest additional cost.
Electricity markets in the OECD countries alone will need
• The efficiency and economics of integrating wind power
investments of $1.8 trillion in transmission and distribution
strongly depend on the ability to apply short term
networks in the period up to 2030, the report concluded. “A
forecasts and on market rules.
forward-looking policy should aim to integrate these
investment needs with renewable energy related investments
and thus create an integrated strategy to face future
challenges in the transmission, distribution and interconnection field.”
27
The construction and operation of wind power installations, often in
areas of open countryside, raises issues of visual impact, noise and the
potential effects on local ecology and wildlife. Many of these issues are
addressed during consultation with the local planning authority, from
whom consent must be obtained to proceed with a development, and in
most cases through a detailed environmental impact assessment.
THE ENVIRONMENTAL IMPACTS
OF WIND POWER
28
THE ENVIRONMENTAL IMPACTS OF WIND POWER
The construction and operation of wind power installations,
Noise
often in areas of open countryside, raises issues of visual
impact, noise and the potential effects on local ecology and
Generally speaking, the sound output of wind turbines can be
wildlife. Many of these issues are addressed during consulta-
subdivided into mechanical and aerodynamic noise. The
tion with the local planning authority, from whom consent
components emitting the highest sound level are the
must be obtained to proceed with a development, and in
generator, the yaw drive which turns the nacelle of the
most cases through a detailed environmental impact
turbine to face the wind, the gearbox and the blades. Some of
assessment.
the sound generated by these components is regular and
some of it irregular, but all of it (except, that generated by
Visual Impact
the yaw mechanism) is present only while the turbine is
actually operating. Even then, compared to road traffic,
trains, construction activities and many other sources of
Wind turbines are tall structures which ideally need to
industrial noise, the sound generated by wind turbines in
operate in an exposed site where they can make best use of
operation is comparatively low (see table).
the prevailing wind. This means they are likely to be visible
over a relatively wide area. Whether this has a detrimental
Better design and better insulation have made more recent
effect is a highly subjective issue. Being visible is not the
wind turbine models much quieter than their predecessors.
same as being intrusive. While some people express concern
The approach of regulatory authorities to the issue of noise
about the effect wind turbines have on the beauty of our
and wind farms has generally been to firstly calculate the
landscape, others see them as elegant and graceful, or
ambient (existing) sound level at any nearby houses and then
symbols of a better, less polluted future.
to ensure that the turbines are positioned far enough away to
avoid unacceptable disturbance.
The landscape is largely human-made and has evolved over
time. Changes to the visual appearance of the countryside,
COMPARATIVE NOISE LEVELS FROM DIFFERENT SO U RC E S
such as lines of electricity pylons, which were once consid-
Source/activity
ered intrusions, are now largely accepted as part of the view.
Threshold of pain
140
In comparison to other energy developments, such as
Jet aircraft at 250m
105
nuclear, coal and gas power stations, or open cast coal
mining, wind farms have relatively little visual impact.
Nevertheless, most countries with a wind power industry
Indicative noise level dB(A)
Pneumatic drill at 7m
95
Truck at 48 kph at 100m
65
Busy general office
60
Car at 64 kph at 100m
have established rules which exclude certain areas, such as
Wind development at 350m
national parks or nature reserves, from development. Others
Quiet bedroom
have identified priority areas where wind power is specifically
Rural night-time background
encouraged.
Source: “Wind Power in the UK”, Sustainable Development Commission, 2005
Some wind turbines are located in industrial areas or close to
other infrastructure developments, such as motorways,
55
35-45
35
20-40
Wildlife – Birds
where they may be considered less intrusive. Large wind
farms of 100 or more turbines can also be located in the sea.
Birds can be affected by wind energy development through
It is also worth emphasising that wind turbines are not
loss of habitat, disturbance to their breeding and foraging
permanent structures. Once removed, the landscape can
areas and by death or injury caused by the rotating turbine
quickly return to its previous condition.
blades. Compared to other causes of mortality among birds,
however (see table), the effect of wind power is relatively
minor. One estimate from the United States is that commercial wind turbines cause the direct deaths of only 0.01 0.02% of all of the birds killed annually by collisions with
man-made structures and activities.
29
O ECD NORTH AMERICA
EUROPE
TOTAL CAPACITY IN GW
TOTAL CAPACITY IN GW
2005
2010
2020
2030
Reference-Scenario
9,839
16.804
43.304
94,204
Moderate-Market growth
9.839
29,100
166,855
333,717
Moderate-Market growth
Advanced Market growth
9,839
35,639
283,875
570,178
Advanced Market growth
Reference-Scenario
2005
2010
2020
2030
40,783
77,000
142,000
186,000
40,783
77,159
175,400 294,000
40,783
77,159
241,279
385,663
LATIN AMERICA
TOTAL CAPACITY IN GW
2005
2010
2020
2030
Reference-Scenario
213
3,200
6,198
10,298
Moderate-Market growth
213
3,217
53,606
122,819
Advanced Market growth
213
3,238
99,627
198,062
AFRICA
TOTAL CAPACITY IN GW
2005
2010
2020
2030
Reference-Scenario
229
700
1,999
5,099
Moderate-Market growth
229
700
8,044
20,246
Advanced Market growth
229
700
16,803
47,567
DEFINITIONS OF R E G I O N S I N AC C O R DA N C E W I T H I E A
CLASSIFICATION
OECD-Europe: Austria, Belgium, Czech Republic, Denmark, Finland, France,
Germany, Greece, Hungary, Iceland, Ireland, Italy, Luxembourg, Netherlands,
Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey,
United Kingdom
East Asia: Afghanistan, Bhutan, Brunei, Cambodia, Fiji, French Polynesia, Indonesia,
Kiribati, Democratic People‘s Republic of Korea, Laos, Malaysia, Maldives, Myanmar,
New Caledonia, Papua New Guinea, Philippines, Samoa, Singapore,
Solomon Islands, Thailand, Vietnam, Vanuatu
OECD N. America: Canada, Mexico, United States
Africa: Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon,
Cape Verde, Central African Republic, Chad, Congo, Democratic Republic of Congo,
Cote d‘Ivoire, Djibouti, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gambia,
Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Libya, Madagascar, Malati,
Mali, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria,
Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, Somalia,
South Africa, Sudan, Swaziland, United Republic of Tanzania, Togo, Tunisia, Uganda,
Zambia, Zimbabwe
OECD Pacific: Japan, Korea, South, Australia, New Zealand
Transition Economies: Albania, Armenia, Azerbaijan, Belarus, Bosnia-Herzegovina,
Bulgaria, Croatia, Estonia, Federal Republic of Yugoslavia, Macedonia, Georgia,
Kazakhstan, Kyrgyzstan, Latria, Lithunia, Moldova, Romania, Russia, Slovenia,
Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Cyprus, Gibraltar, Malta
South Asia: Bangladesh, India, Nepal, Pakistan, Sri Lanka
Latin America: Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize,
Bermuda, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Domenica,
Dominican Republic, Ecuador, El Salvador, French Guiana, Grenada, Guadeloupe,
Guatemala, Guyana, Haiti, Honduras, Jamaica, Martinique, Netherlands Antilles,
Nicaragua, Panama, Paraguay, Peru, Puerto Rico, St. Kitts-Nevis-Anguila,
Saint Lucia, St. Vincent-Grenadines and Suriname, Trinidad and Tobago, Uruguay,
Venezuela
30
Middle East: Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar,
Saudi Arabia, Syria, United Arab Emirates, Yemen
China
TRANSITION ECONOMIES
TOTAL CAPACITY IN GW
2005
2010
2020
2030
Reference-Scenario
110
300
7,000
12,000
Moderate-Market growth
110
363
7,462
27,712
Advanced Market growth
110
308
13,217
115,539
CHINA
TOTAL CAPACITY IN GW
2005
2010
2020
2030
Reference-Scenario
1,349
4,502
11,402
24,602
Moderate-Market growth
1,349
7,217
40,738
85,655
Advanced Market growth
1,349
7,217
168,731
328,087
EAST ASIA
TOTAL CAPACITY IN GW
2005
2010
2020
2030
Reference-Scenario
30
1,000
4,895
6,595
Moderate-Market growth
30
1,117
27,274
59,047
Advanced Market growth
30
1,117
70,577
142,243
2020
2030
OECD PACIFIC
TOTAL CAPACITY IN GW
2005
2010
Reference-Scenario
2,065
2,500
5,300
12,100
Moderate-Market growth
2,065
3,065
33,859
90,267
Advanced Market growth
2,065
4,960
91,667
143,881
MIDDLE EAST
SOUTH ASIA
TOTAL CAPACITY IN GW
TOTAL CAPACITY IN GW
2005
2010
2020
2030
2005
2010
2020
2030
Reference-Scenario
35
500
2,400
3,700
Reference-Scenario
4,430
6,013
6,300
9,300
Moderate-Market growth
35
500
8,587
17,749
Moderate-Market growth
4,430
14,033
38,557
74,989
Advanced Market growth
35
500
24,221
47,437
Advanced Market growth
4,430
17,200
60,918
125,568
31
Well publicised reports of bird deaths, especially birds of prey,
In Germany, records of bird deaths from the National
at sites including the Altamont Pass near San Francisco and
Environmental office Brandenburg showed a total of 278
Tarifa in southern Spain, are not indicative of the day to day
casualties at wind farms over the period 1989 to 2004. Only
experience at the thousands of wind energy developments
ten of the birds were species protected by European Union
now operating around the world.
legislation. By the end of the period Germany had over
16,500 wind turbines in operation1.
As a general rule, birds notice that new structures have
arrived in their area, learn to avoid them, especially the
The UK’s leading bird protection body, the Royal Society for
turning blades, and are able to continue feeding and breeding
the Protection of Birds, says that the most significant long-
in the location. Problems are most likely to occur when the
term threat to birds comes from climate change. Changes in
site is either on a migration route, with large flocks of birds
the climate will in turn change the pattern of indigenous
passing through the area, or is particularly attractive as a
plant species and their attendant insect life, making once
feeding or breeding ground. This can be avoided by careful
attractive areas uninhabitable by birds. According to the
siting procedures. Modern wind turbines, with their slower
RSPB, “recent scientific research indicates that, as early as the
turning blades, have also proved less problematic than earlier
middle of this century, climate change could commit one
models.
third or more of land-based plants and animals to extinction,
including some species of British birds.” Compared to this
A 2001 study by ecological consultants WEST for the
threat, “the available evidence suggests that appropriately
National Wind Coordinating Committee estimated that
positioned wind farms do not pose a significant hazard for
33,000 birds were killed that year in the United States by the
birds,” it concludes.
15,000 turbines then in operation – just over two birds per
turbine. The majority of the fatalities had occurred in
Collaborative work between the wind power industry and
California, where older, faster rotating machines were still in
wildlife groups has also been aimed at limiting bird casual-
operation; these are steadily being replaced by more modern,
ties. In the Altamont Pass, for example, operators have
slower rotating turbines.
agreed to turn off their turbines during busy migratory
periods.
In Europe, a 2003 study in the Spanish province of Navarra where 692 turbines were then operating in 18 wind farms found that the annual mortality rate of medium and large
birds was just 0.13 per turbine.
32
1 German Federal Government „Kleine Anfrage der Abgeordneten Dr. Christel Happach-Kasan
et. all; Drucksache 15/5064 - Gefährdung heimischer Greifvogel- und Fledermausarten durch
Windkraftanlagen
THE ENVIRONMENTAL IMPACTS OF WIND POWER
In the UK, the solution adopted at the Beinn an Tuirc wind
Wildlife – Bats
farm in Scotland was to create a completely new habitat for
the Golden Eagles which hunted there, providing a fresh
Like birds, bats are endangered by many human activities,
source of their favourite prey, the grouse.
from pesticide poisoning to collision with structures to loss
of habitat. Despite publicity given to bat deaths around
wind farms, mainly in the United States, studies have shown
Fossil fuels and birds
As a result of a single oil shipping accident, the Exxon Valdez oil
spill in Alaska’s Prince William Sound, more than 500,000
migratory birds were killed, about 1,000 times the estimated
annual total in California’s wind power plants. A study at a
coal-fired power plant in Florida, which had four smokestacks,
recorded an estimated 3,000 bird deaths in a single evening
during the autumn migration period.
that wind turbines do not pose a significant threat to bat
populations. A review of available evidence by ecological
consultants WEST concluded that “bat collision mortality
during the breeding season is virtually non-existent, despite
the fact that relatively large numbers of bat species have
been documented in close proximity to wind plants. These
data suggest that wind plants do not currently impact
resident breeding populations where they have been studied
in the US.”
S O U RC E : UNION OF CONCERNED SCIENTISTS /
F LO R I DA ORNITHOLOGICAL SOCIETY
The overall average fatality rate for US wind projects is
3.4 bats per turbine per year, according to a 2004 report by
M A I N C AUSES OF BIRD DEATHS IN THE UNITED STATES
Cause
Utility transmission and
distribution lines
Estimated deaths per year
WEST. No nationally endangered or threatened bat species
have been found.
130-174 million
Monitoring of wind farms in the US indicates that most deaths
Collision with road vehicles
60-80 million
Collision with buildings
100-1,000 million
involve bats that are migrating in late summer and autumn.
Telecommunications towers
40-50 million
One theory is that migrant bats, which are not searching for
Agricultural pesticides
67 million
Cats
39 million
Source: American Wind Energy Association
insects or feeding, turn off their “echolocation” navigation
system in order to conserve energy. The American Wind Energy
Association (AWEA) has now joined forces with Bat Conservation International, the US Fish and Wildlife Service and the
National Renewable Energy Laboratory to look at why these
collisions occur and how they can be prevented.
33
A number of national wind energy industry associations have
adopted guidelines for how prospective developers should
Offshore Wind Farms
approach the issue of both birds and bats. The Australian
Wind Energy Association (Auswind), for example, “strongly
In most European coastal states national regulations have
recommends… scientifically rigorous study of the activities
been established covering the procedures required to obtain
over all seasons of birds and bats…” This should include
building permits for offshore wind farms. The project
targeted investigations that are “necessary to obtain general
developer has to assess in qualitative and quantitative terms
data on bird and bat use of sites and their surrounding
the expected environmental impacts on the marine environ-
region” to enable the developer and their regulators to assess
ment. These procedures ensure that projects comply with
the risk of collisions.
international and EU law, conventions and regulations
covering habitat and wildlife conservation.
In general, wind farming is popular with farmers, because
their land can continue to be used for growing crops or
Within the structure of an environmental impact assessment,
grazing livestock. Sheep, cows and horses are not disturbed
an initial baseline study is conducted before any impacts can
by wind turbines. The first wind farm built in the UK, Delabole
occur. Subsequent monitoring is necessary to record any
in Cornwall, is home to a stud farm and riding school, and the
changes within the marine environment which may have
farmer, Peter Edwards, often rides around the turbines on his
been caused by anthropogenic factors. The monitoring phase
horse.
may go on for several years, and evaluations and conclusions
are updated annually to assess changes over time.
P OT E N T I A L I M PAC T S O F O F FS H O R E W I N D FA R M S
I N C L U D E² :
Electromagnetic fields: Magnetic fields emanating from
power transmission cables can affect marine animals.
Connections for offshore wind farms are therefore based on
multi-conductor cable systems to avoid this phenomenon.
34
THE ENVIRONMENTAL IMPACTS OF WIND POWER
Noise: Construction operations, especially the ramming of
At the much larger Nysted wind farm off the coast of
turbine foundations into the sea bed, can disturb marine
Denmark, radar plotting research found that flocks of
wildlife. However at the Horns Rev site in the North Sea off
migrating sea birds mostly flew round the outside of the
Denmark, for example, monitoring has shown that neither
block of 72 turbines.
seals nor harbour porpoises, both active in the area, have
been forced to make any substantial changes to their
At a nine turbine development along the sea wall at Blyth in
behaviour. Both fish and benthic communities have in fact
Northumbria, UK, 1-2 collisions have been recorded per
been attracted to the foundations of the wind turbines after
turbine per year.
their construction, the latter using them as hatchery or
nursery grounds.
E N V I RO N M E N TA L B E N E F I T S
On the noise produced by operating offshore wind turbines,
Against the potential negative effects of wind power develop-
information currently available indicates that this lies in the
ment must be set the benefits resulting from switching to a
same range of frequencies as that generated by sources such
renewable source of energy. Wind energy is one of the most
as shipping, fishing vessels, the wind and waves.
environmentally benign ways of producing the electricity we
need to power our daily lives. If we don’t switch to cleaner
Birds: As on land, sea birds have generally learned to live with
forms of energy, climate change will severely and irrevocably
the presence of offshore wind turbines. At the Utgrunden and
alter much of our landscape as well as the animal and plant
Yttre Stengrund wind farms off Sweden, for example,
life it contains.
research shows that very few waterfowl, including Eider
ducks, fly close enough to the turbines to risk collision. One
estimate is that one waterfowl is killed per wind turbine per
year.
2 Offshore Wind - Implementing a new Power House for Europe is a strategic blueprint that outlines how offshore wind farms will be able to supply about 10% of Europe‘s electricity sector by
2020. The report represents a crucial tool in the race to cut greenhouse emissions. It also highlights the urgency for political, technical and environmental actions to build up an environmental friendly powerhouse. The full report is available under: http://www.greenpeace.org/
international/press/reports/offshore-wind-implementing-a#
35
THE “GLOBAL WIND ENERGY OUTLOOK”
SCENARIO
36
THE “GLOBAL WIND ENERGY OUTLOOK” SCENARIO
The initial sections of this report have described the current
are successfully implemented. The assumption here is that
status of wind energy development around the world, the
the success achieved in Europe in meeting the goals for wind
range of drivers behind its expansion, and the environmental
energy implementation set by the European Union will be
and grid supply issues which need to be resolved in order for
repeated globally.
this expansion to continue. Although the progress of wind
power has been driven most strongly by the urgent need to
The most ambitious scenario, the “Advanced” version,
combat the dangers of global climate change, this is now
follows a similar development path to that outlined in the
being supported by increasing concerns over security of
series of Wind Force 10 and 12 reports produced since 1999
energy supply, in particular the rising cost of fossil fuels. In
by the European Wind Energy Association (EWEA), the Global
the developing world, a further attraction of wind energy is
Wind Energy Council (GWEC) and Greenpeace. These
that it can help satisfy the pressing requirement for new
examined how feasible it would be for 10%, and later 12%, of
electricity supply with speed and flexibility.
the world’s electricity to come from wind power by 2020.
The assumption here is that all policy options in favour of
Against that background this second part of the report now
renewable energy, along the lines of this report’s recommen-
examines the future potential of wind power. Through the
dations, have been selected, and the political will is there to
Global Wind Energy Outlook scenario the horizon is opened
carry them out.
up to the year 2050 against a range of projections for both
the wind energy industry’s expected development and the
Up to 2010 the figures for installed capacity are closer to
anticipated global growth in demand for electricity.
being predictions than scenarios. This is because the data
available from the wind energy industry shows the expected
This exercise has been carried out as a collaboration between
growth of worldwide markets over the next five years.
the Global Wind Energy Council (GWEC), Greenpeace
After 2010 the pattern of development is clearly much more
International and the German Aerospace Centre (DLR), the
difficult to anticipate. Nonetheless, the scenarios still show
largest engineering research organisation in Germany (see
what could be achieved if the wind energy market is given the
“Global Wind Energy Outlook – Research Background”).
encouragement it deserves.
Projections on the future pattern of wind energy development have been extrapolated from a larger study of global
sustainable energy pathways up to 2050 conducted by DLR
Energy Efficiency Projections
for Greenpeace and the European Renewable Energy Council
(EREC).
These three scenarios for the global wind energy market are
then set against two trajectories for the future growth of
The Scenarios
electricity demand. Most importantly, these projections do
not just assume that growing demand by consumers will
inevitably need to be matched by supply options. On the
Three different scenarios are outlined for the future growth of
basis that demand will have to be reduced if the threat of
wind energy around the world. The most conservative
climate change is to be seriously tackled, they take into
“Reference” scenario is based on the projection in the (2004)
account an increasing element of energy efficiency.
World Energy Outlook report from the International Energy
Agency (IEA). This projects the growth of all renewables,
The more conservative of the two global electricity demand
including wind power, up to 2030. The IEA assessment has
projections is again based on data from the IEA’s 2004 World
then been extended up to 2050 using input from the DLR
Energy Outlook, extrapolated forwards to 2050. This is the
study.
“Reference” projection. It does not take into account any
possible or likely future policy initiatives, and assumes, for
The “Moderate” scenario takes into account all policy
instance, that there will be no change in national policies on
measures to support renewable energy either under way or
nuclear power. The IEA’s assumption is that “in the absence of
planned around the world. It also assumes that the targets
new government policies, the world’s energy needs will rise
set by many countries for either renewables or wind energy
inexorably”. Global demand would therefore almost double
37
from the baseline 13,423 TWh in 2003 to reach 25,667 TWh
Core Results
by 2030 and continue to grow to 37,935 TWh by 2050.
The results of the Global Wind Energy Outlook scenarios
The IEA’s expectations on rising energy demand are then set
show that even under the conservative IEA view of the
against the outcome of a study on the potential effect of
potential for the global market, wind energy could be
energy efficiency savings developed by DLR and the Ecofys
supplying 5 % of the world’s electricity by 2030 and 6.6 % by
consultancy. This describes an ambitious development path
2050. This assumes that the “High Energy Efficiency”
for the exploitation of energy efficiency measures. It focuses
projection has been introduced.
on current best practice and available technologies in the
future, and assumes that continuous innovation takes place.
Under the Moderate wind energy growth projection,
coupled with ambitious energy saving, wind power could
Under the “High energy efficiency” projection, input from
be supplying 15.6 % of the world’s electricity by 2030 and
the DLR/Ecofys models shows the effect of energy efficiency
17.7 % by 2050.
savings on the global electricity demand profile. Although
this assumes that a wide range of technologies and initiatives
Under the Advanced wind energy growth projection,
have been introduced, their extent is limited by the potential
coupled with ambitious energy saving, wind power could
barriers of cost and other likely roadblocks. This still results in
be supplying 29.1 % of the world’s electricity by 2030 and
global demand increasing by less than 30 % to reach
34.2 % by 2050.
17,786 TWh in 2030. By the end of the scenario period in
2050, demand is 39 % lower than under the Reference
At the levels of penetration envisaged under the Advanced
scenario.
scenario any wind energy output which could not be used for
electricity generation would be freed up either for storage or
to supply new sectors such as transport. Considerable
research and development effort is currently being devoted
to advancing and improving both these technologies.
These results show not only that wind energy can make a
major contribution towards satisfying the global need for
clean, renewable electricity within the next 30 years but that
its penetration in the supply system can be substantially
increased if serious energy efficiency measures are implemented at the same time.
SUMMARY OF GLOBAL WIND ENERGY OUTLOOK SCENARIO FOR 2030
Global
Scenario
Cumulative
wind power
capacity (GW)
Electricity
output (TWh)
Percentage of world
electricity (High
Energy Efficiency)
Annual installed
capacity [GW]
Annual
investment
(€ bn)
Jobs [million]
Annual CO₂
saving
(million tonnes)
Reference
364
892
5%
24.8
21.2
0.48
535
Moderate
1,129
2,769
15.6 %
58.3
45.0
1.14
1,661
Advanced
2,107
5,176
29.1 %
129.2
84.8
1.44
3,100
Annual CO₂
saving
(million tonnes)
SUMMARY OF GLOBAL WIND ENERGY OUTLOOK SCENARIO FOR 2050
Global
Scenario
38
Cumulative
wind power
capacity (GW)
Electricity
output (TWh)
Percentage of world
electricity (High
Energy Efficiency)
Annual installed
capacity [MW]
Annual
investment
(€ bn)
Jobs [million]
Reference
577
1,517
6.6 %
34.3
28.8
0.65
910
Moderate
1,557
4,092
17.7 %
71.0
54.2
1.39
2,455
Advanced
3,010
7,911
34.3 %
168.6
112.0
2.80
4,747
THE “GLOBAL WIND ENERGY OUTLOOK” SCENARIO
Detailed Results
projection is applied. Under the Reference projection, wind’s
contribution would increase from 1.5 % in 2010 up to 4 % in
A more detailed analysis of the Global Wind Energy Outlook
2050. Under the “High Energy Efficiency” projection it would
scenario shows that a range of outcomes is possible for the
increase from 1.8 % in 2010 to 6.6 % in 2050.
global wind energy market, depending on the choice of
demand side options and different assumptions for growth
Under the Moderate wind energy scenario growth rates are
rates on the wind power supply side.
expected to be substantially higher than under the Reference
version. Up to 2010, the annual growth rate is 19 %, from
Under the basic Reference wind energy scenario, a 15 %
2011 to 2014 it is 16 %, and from 2015 to 2020 it is 15 %. It
annual growth rate of wind power capacity is assumed until
then declines to 10 % until 2025 before falling to 5 %.
2010, followed by 10 % until 2014. After that it declines
rapidly, falling to 3 % per annum by 2031.
The result is that by 2020, global wind power capacity would
have reached a level of 560 GW and by 2030 almost
The result is that by the end of this decade, cumulative global
1,129 GW. By the end of the scenario period in 2050 the
capacity would have reached almost 113 Gigawatts (GW).
capacity of worldwide wind power would have reached
By 2020, global capacity would be over 230 GW and by 2030
almost 1,557 GW. The annual rate of installation of new
almost 364 GW. By the end of the scenario period in 2050
capacity would by then be running at almost 71 GW.
the capacity of worldwide wind power would be more than
577 GW. The annual rate of installation of new capacity
In terms of penetration in the global electricity supply
would by then be running at 34 GW.
system, wind energy’s contribution would increase under the
Reference demand projection scenario from 1.8 % in 2010 to
The relative penetration of wind energy in the global
10.8 % in 2050. Under the High Energy Efficiency projection
electricity supply system varies according to which demand
it would increase from 2.2 % in 2010 to 17.7 % in 2050.
WI ND PO WER PENETRATION OF WORLDS ELECTRICITY SUPPLY
40,0
[%]
35,0
30,0
E LECT RI CIT Y DE MAND P RO JE CTI ON :
R EFE RE NCE
E L E C T R I C I T Y D E M A N D P RO J E C T I O N :
H I G H E N E RG Y E F F I C I E N CY
Advanced wind market growth
Advanced wind market growth
Moderate wind market growth
Moderate wind market growth
Reference wind market growth
Reference wind market growth
25,0
20,0
15,0
10,0
5,0
0,0
2005
2010
2020
2030
2040
2050
3 DIFFERENT WIND MARKET DEVELOPMENT SCENARIOS - WITH DIFFERENT WORLD ELECTRICITY DEMAND DEVELOPM E N T S
2005
2010
2020
2030
2040
2050
WIND MARKET GROWTH - IEA PROJECTION (“REFERENCE”)
Wind power penetration of Worlds electricity in % - Reference (IEA Demand Projection)
%
0.8
1.5
2.7
3.5
4.1
4.0
Wind power penetration of Worlds electricity in % - High Energy Efficiency
%
0.8
1.8
3.6
5.0
6.3
6.6
Wind power penetration of Worlds electricity in % - Reference
%
0.8
1.8
6.6
10.8
11.8
10.8
Wind power penetration of Worlds electricity in % - High Energy Efficiency
%
0.8
2.2
8.6
15.6
18.1
17.7
Wind power penetration of Worlds electricity in % - Reference
%
0.8
2.1
12.1
20.1
22.1
20.9
Wind power penetration of Worlds electricity in % - High Energy Efficiency
%
0.8
2.4
16.5
29.1
34.0
34.2
MODERATE WIND MARKET GROWTH
ADVANCED WIND MARKET GROWTH
39
Regional Breakdown
Under the Advanced wind energy scenario, an even more
rapid expansion of the global wind power market is envisaged. Growth rates are faster in the first two decades. Up to
All three scenarios for wind power are broken down by region
2015, a growth rate in annual wind power capacity of 20 %
of the world based on the methodology used by the IEA, with
is assumed, falling to 17 %. It then reduces to approx 10 % for
a further differentiation in Europe. For the purpose of this
the five years to 2025, before falling below 5 %. The result is
report, the regions are defined as European Union (current EU
that by the end of this decade, global capacity would have
member states, plus Romania and Bulgaria), the rest of
reached almost 154 GW. By 2020, global capacity would be
Europe (non-EU countries), the Transition Economies (former
almost 1,073 GW and by 2030 almost 2,110 GW. By the end
Soviet Union states, apart from those now part of the EU),
of the scenario period in 2050 the capacity of worldwide
North America, Central and South America, East Asia, South
wind power would be more than 3,010 GW. The size of the
Asia, China, the Middle East, Africa and the Pacific (including
annual market for new wind power capacity would by then be
Australia, South Korea and Japan).
150 GW.
A regional break-down of the wind power capacity and output
In terms of penetration in the global electricity supply
(TWh) expected in each region of the world by 2010, 2020 and
system, under the Reference demand projection, wind’s
2030 is shown on page 41. This shows that Europe would
contribution would increase from 2.1 % in 2010 up to 20.9 %
continue to dominate the world market under the least
in 2050. Under the “High Energy Efficiency” projection it
ambitious Reference scenario. By 2030 Europe would still have
would increase from 2.4 % in 2010 to 34.3 % in 2050.
G LO BAL CUMULATIVE WIND POWER CAPACITY
3,000,000
[ MW ]
Moderate
Reference
Advanced
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2005
2010
2020
2030
2040
2050
GLOBAL CUMULATIVE CAPACITY [MW] AND ELECTRICITY GENERATION [TWh ]
Year
Reference
Moderate
Advanced
40
[MW]
2005
2010
2020
2030
2040
2050
59,078
112,818
230,658
363,758
482,758
577,257
[TWh]
124
247
566
892
1,269
1,517
[MW]
59,078
136,543
560,445
1.128,707
1.399,133
1.556,901
[TWh]
124
299
1,375
2,768
3,677
4,092
[MW]
59,078
153,759
1.072,928
2.106,656
2.616,210
3.010,302
[TWh]
124
337
2,632
5,167
6,875
7,911
THE “GLOBAL WIND ENERGY OUTLOOK” SCENARIO
51 % of the global wind power marker, followed by North America with 26 %. The next largest region would be China with 7 %.
The two more ambitious scenarios envisage much stronger
5%
3%
2%
3%
20
7%
3%
2%
3%
Central and
South America
Union. Under the Moderate scenario, Europe’s share will
Pacific
1% 1% 2%
1% 1% 3%
20
Central and South America (11 %), China (8 %), the Pacific
26%
North
America
19%
region (8 %) and South Asia, which includes India (7 %).
Under the Advanced scenario, an even stronger input would
come from Asia and South America, with China’s share of the
world market increasing to 16% by 2030, South America’s
share rising to 9% and the Pacific region’s to 7%. Europe’s
share would make up only 19% of the world’s total wind
capacity. Given the slow pace of progress so far, and
continuing market barriers, a less important contribution is
expected from the Transition Economies than had previously
been envisaged.
In all three scenarios it is assumed that an increasing share of
new capacity is accounted for by the replacement of old plant.
This is based on a 20 year average lifetime for a wind turbine.
Turbines replaced within the timescale of the scenarios are
assumed to be of the same installed capacity as the original
models. The result is that an increasing proportion of the
annual level of installed capacity will come from repowered
turbines. These new machines will contribute to the overall
level of investment, manufacturing output and employment.
3
51%
have fallen to 26 % by 2030, with North America contributing a dominant 30 % and major contributions coming from
20
0
growth in regions outside the currently dominant European
REGIONAL
BREAK DOWN:
REFERENCE
SCENARIO
REFERENCE
SCENARIO
(GW) 2020
/ 2030 [ G W ]
Africa
Middle East
China
South Asia
East Asia
3%
Transition
Economies
3%
62%
Europe
2020
Europe
142 GW
Transition Economies
7 GW
North America
43 GW
Central and South America
6 GW
East Asia
5 GW
South Asia
6 GW
China
11 GW
Middle East
2 GW
Africa
2 GW
Pacific
5 GW
2030
Europe
186 GW
Transition Economies
12 GW
North America
94 GW
Central and South America
10 GW
East Asia
7 GW
South Asia
9 GW
China
25 GW
Middle East
4 GW
As replacement turbines their introduction will not however
Africa
5 GW
increase the total figure for global cumulative capacity.
Pacific
12 GW
41
R E G I OM
NA
AK
DOWN: MODERATE
SCENARIO
OLDBE R
R EAT
E SCENARIO
(GW) 2020
/ 2030 [GW]
Pacific
Africa
2%
Middle East
China
7%
Pacific
6%
20
8%
20
Europe
20
9%
2%
Africa
Middle East
26%
2%
2%
3
China
5%
Europe
19%
3
5%
2%
5%
1%
Transition
Economies
6%
1%
10%
30%
Transition
Economies
South Asia
6%
7%
9%
East Asia
25%
9%
North America
2020
27%
7%
30%
Central and South America
North America
2020
Europe
174 GW
Europe
Transition Economies
7 GW
Transition Economies
13 GW
North America
167 GW
North America
284 GW
Central and South America
54 GW
Central and South America
100 GW
East Asia
27 GW
East Asia
71 GW
South Asia
39 GW
South Asia
61 GW
China
41 GW
China
169 GW
Middle East
9 GW
Middle East
24 GW
Africa
8 GW
Africa
17 GW
Pacific
34 GW
Pacific
90 GW
2030
42
20
23%
20
16%
11%
Central and
South America
7%
16%
7%
East Asia
20
2%
0
2%
2%
8%
31%
0
7%
South Asia
1%
REGIONAL
BREAK DOWN:
ADVANCED
SCENARIO
ADVANCED
SCENARIO
(GW) 2020
/ 2030 [GW]
245 GW
2030
Europe
295 GW
Europe
Transition Economies
28 GW
Transition Economies
392 GW
116 GW
North America
334 GW
North America
570 GW
Central and South America
123 GW
Central and South America
198 GW
East Asia (excl.Korea)
59 GW
East Asia (excl.Korea)
142 GW
South Asia
75 GW
South Asia
126 GW
328 GW
China
87 GW
China
Middle East
18 GW
Middle East
47 GW
Africa
20 GW
Africa
48 GW
Pacific
90 GW
Pacific
140 GW
THE “GLOBAL WIND ENERGY OUTLOOK” SCENARIO
Main Assumptions and Parameters
winds are stronger and more predictable. The growing size of
the offshore wind market, especially in Europe, will therefore
1. GROWT H R AT E S
contribute to an increase in the average.
Market growth rates in this scenario are based on a mixture
The scenario projects that the average global capacity factor
of historical figures and information obtained from analysts
will increase to 28 % by 2012 and then 30 % by 2036.
of the wind turbine market. Growth rates of up to 20 % per
annum, as envisaged in the Advanced version of the scenario,
4 . C A P I TA L C O S T S A N D P RO G R E S S R AT I O S
are high for an industry which manufactures heavy equipment. The wind industry has experienced much higher growth
The capital cost of producing wind turbines has fallen steadily
rates in recent years, however. Since the year 2000 the
over the past 20 years as manufacturing techniques have
average annual increase in global cumulative installed
been optimised, turbine design has been largely concentrated
capacity has been 28 %.
on the three-bladed downwind model with variable speed
and pitch blade regulation, and mass production and
It should also be borne in mind that whilst growth rates
automation have resulted in economies of scale.
eventually decline to single figures across the range of
scenarios, the level of wind power capacity envisaged in 30
The general conclusion from industrial learning curve theory
years’ time means that even small percentage growth rates
is that costs decrease by some 20 % each time the number of
will by then translate into large figures in terms of annually
units produced doubles. A 20 % decline is equivalent to a
installed megawatts.
progress ratio of 0.80.
2. TURBIN E C A PAC I T Y
Studies of the past development of the wind power industry
show that progress through R&D efforts and by learning have
Individual wind turbines have been steadily growing in terms
already resulted in a 15-20 % price reduction – equivalent to
of their installed capacity – the maximum electricity output
a progress ratio of 0.85 to 0.80. In the calculation of cost
they could achieve when operating at full power. The average
reductions in this report, experience has been related to num-
capacity of wind turbines installed globally in 2005 was
bers of units, i.e. turbines and not megawatt capacity. The
1.2 MW. At the same time the largest turbines being prepared
increase in average unit size is therefore also taken into
for the market are now reaching more than 5 MW in capacity.
account.
This scenario makes the conservative assumption that the
average size will gradually increase from today’s figure to
The progress ratio assumed in this study starts at 0.90 up
2 MW in 2013 and then level out. It is possible however that
until 2010. After that it is reduced to 0.92. Beyond 2025,
this figure will turn out to be greater in practice. As the
when production processes are assumed to have been
average capacity of turbines increases, fewer will be needed
optimised and the level of global manufacturing output has
in total to satisfy a given penetration of global electricity
reached a peak, it goes down to 0.98.
demand.
The reason for this graduated assumption, particularly in the
3. CAPAC I T Y FAC TO R
early years, is that the manufacturing industry has not so far
gained the full benefits from series production, especially due
The capacity factor of a wind turbine is an indication of how
to the rapid upscaling of products. Neither has the full
efficiently it is operating. The percentage refers to the
potential of future design optimisations been utilised. Even
average proportion of the year during which they will be
so, the cost of wind turbine generators has still fallen
generating electricity at the equivalent of full capacity. From
significantly, and the industry is recognised as having entered
an average capacity factor today of 24 %, the scenario
the “commercialisation phase”, as understood in learning
assumes that improvements in both wind turbine technology
curve theories.
and the siting of wind farms will result in a steady increase.
Capacity factors are also much higher out to sea, where
43
Capital costs per kilowatt of installed capacity are taken as an
2 . G E N E R AT I O N C O S T S
average of € 1,000 in 2005. They are then assumed to fall
steadily to € 912 in 2010 and to € 784 by 2025. From then
Various parameters need to be taken into account when
onwards the scenario assumes a leveling out of costs. All
calculating the generation costs of wind power. The most
figures are given at 2005 prices.
important of these are the capital cost of wind turbines (see
above) and the expected electricity production. The second is
Costs and Benefits
highly dependent on the wind conditions at a given site,
making selection of a good location essential to achieving
economic viability. Other important factors include operation
1. INVESTMENT
and maintenance (O&M) costs, the lifetime of the turbine
and the discount rate (the cost of capital).
The relative attraction to investors of the wind energy market
is dependent on a number of factors. These include the
The total cost per generated kWh of electricity is traditionally
capital cost of installation, the availability of finance, the
calculated by discounting and levelising investment and
pricing regime for the power output generated and the
O&M costs over the lifetime of a wind turbine, then dividing
expected rate of return.
this by the annual electricity production. The unit cost of
generation is thus calculated as an average cost over the
The investment value of the future wind energy market
lifetime of a turbine, which is normally estimated at 20 years.
envisaged in this scenario has been assessed on an annual
In reality, however, the actual costs will be lower at the
basis. This is based on the assumption of a gradually
beginning of a turbine’s operation, due to lower O&M costs,
decreasing capital cost per kilowatt of installed capacity, as
and increase over the lifespan of the machine.
already explained.
Taking into account all these factors, the cost of generating
In the Reference scenario the annual value of global
electricity from wind energy currently ranges from approxi-
investment in the wind power industry reaches € 10.7 billion
mately 4-5 €cents/kWh at high wind speed sites up to
in 2010, increases to € 21.2 bn by 2030, with a peak at
approximately 6-8 €cents/kWh at sites with low average
€ 28.8 bn in 2050.
wind speeds.
In the Moderate scenario the annual value of global
However, over the past 15 years the efficiency of wind
investment in the wind power industry reaches € 18.2 billion
turbines has improved considerably thanks to better
in 2010, increases to € 62.4 bn by 2020 with a peak at
equipment design, better siting and taller turbines. As a
€ 74.9 bn in 2040.
result, efficiency has been increasing by 2% to 3% annually.
Furthermore, it can be assumed that as a result of optimised
In the Advanced scenario the annual value of global
production processes, the investment costs for wind turbines
investment reaches € 23.2 billion in 2010, peaks at € 141 bn
will decrease as described above.
by 2020 and decreases slowly to € 112.1 bn until 2050.
All these figures take into account the value of repowering
As a result, it is expected that by 2020, the costs of producing
older turbines.
electricity will have fallen to 3-3.8 €cents/kWh at a good site
and 4-6 €cents/kWh at a site with low average wind speeds.
Although these figures may appear large, they should be seen
By 2050, these costs could be as low as 2.8-3.5 €cents/kWh
in the context of the total level of investment in the global
and 4.2-5.6 €cents/kWh respectively.
power industry. During the 1990s, for example, annual investment in the power sector was running at some € 158-186
billion each year.
44
THE “GLOBAL WIND ENERGY OUTLOOK” SCENARIO
COSTS AND CAPACITIES
Reference
Moderate
Advanced
3,000
Cost € / kW
1,000
950
2,500
900
2,000
850
800
1,500
750
1,000
Annual Installation [ GW ]
Reference
700
Moderate
Advanced
500
650
600
0
2010
2005
2020
2030
2040
2050
INVESTMENT AND EMPLOYMENT
2005
2010
2020
2030
2040
2050
11,524
11,506
15,547
24,816
27,447
34,266
REFERENCE
Annual Installation [MW]
Cost € / kW
1,000
933
879
854
845
842
Investment € billion /year
11.524
10.732
13.662
21.205
23.185
28.841
Employment Job-year
150,120
241,484
322,729
481,624
531,723
653,691
Annual Installation [MW]
11,524
19,906
77,365
58,260
97,737
70,957
Cost € / kW
1,000
912
807
773
766
764
Investment € billion /year
11.524
18.154
62.449
45.009
74.854
54.227
Employment Job-year
150,120
390,408
1.310,711
1.141,016
1.663,578
1.386,085
Annual Installation [MW]
11,524
25,831
186,825
117,014
142,260
156,423
Cost € / kW
1,000
899
756
725
719
717
Investment € billion /year
11.524
23.220
141.249
84.827
102.229
112.090
Employment Job-year
150,120
492,384
2.899,776
2.143,587
2.506,871
2.795,873
MODERATE
ADVANCED
45
These calculations do not take into account the so-called
indirect employment. As production processes are optimised,
‘external costs’ of electricity production. It is generally agreed
this level will decrease, falling to 11 manufacturing jobs and 5
that renewable energy sources such as wind have environ-
in development and installation by 2030. In addition,
mental and social benefits compared to conventional energy
employment in regular operations and maintenance work at
sources such as coal, gas, oil and nuclear. These benefits can
wind farms will contribute a further 0.33 jobs for every mega-
be translated into costs for society, which should be reflected
watt of cumulative capacity.
in the cost calculations for electricity output. Only then can a
fair comparison of different means of power production be
Under the Reference scenario this means that more than
established. The ExternE project, funded by the European
241,000 jobs would be created by 2010, over 481,000 jobs
Commission, has estimated the external cost of gas at
by 2030 and almost 653,000 jobs by 2050. In the Moderate
around 1.1-3.0 €cents/kWh and that for coal at as much as
scenario these numbers would increase to more than
3.5-7.7 €cents/kWh.
390,000 jobs by 2010, almost 1.1 million by 2030 and then
leveling out at about 1.4 million by 2050. Under the
Furthermore, these calculations do not take into account the
Advanced scenario, the results show increases in the
fuel cost risk related to conventional technologies. Since wind
employment level to 2.9 million jobs by 2020, leveling out to
energy does not require any fuel, it eliminates the risk of fuel
2.8 million by 2050.
price volatility which characterises other generating
technologies such as gas, coal and oil. As a result, a generat-
4 . C A R B O N D I OX I D E S AV I N G S
ing portfolio containing substantial amounts of wind energy
will reduce the risks of future higher energy costs by reducing
A reduction in the levels of carbon dioxide being emitted into
society’s exposure to price increases for fossil fuels. In an age
the global atmosphere is the most important environmental
of limited fuel resources and high fuel price volatility, the
benefit from wind power generation. Carbon dioxide is the
benefits of this are immediately obvious.
gas largely responsible for exacerbating the greenhouse
effect, leading to the disastrous consequences of global
In addition, the avoided costs for the installation of conven-
climate change.
tional power production plant and avoided fossil fuel costs
are not taken into consideration. This would further improve
At the same time, modern wind technology has an extremely
the cost analysis for wind energy.
good energy balance. The CO₂ emissions related to the
manufacture, installation and servicing over the average
3. EMPLOYMENT
20 year lifecycle of a wind turbine are “paid back” after the
first three to six months of operation.
The employment effect of this scenario is a crucial factor to
weigh alongside its other costs and benefits. High unemploy-
The benefit to be obtained from carbon dioxide reductions is
ment rates continue to be a drain on the economies of many
dependent on which other fuel, or combination of fuels, any
countries in the world. Any technology which demands a
increased generation from wind power will displace.
substantial level of both skilled and unskilled labour is
Calculations by the World Energy Council show a range of
therefore of considerable economic importance, and likely to
carbon dioxide emission levels for different fossil fuels. On
feature strongly in any political decision-making over
the assumption that coal and gas will still account for the
different energy options.
majority of electricity generation in 20 years’ time – with a
continued trend for gas to take over from coal – it makes
A number of assessments of the employment effects of wind
sense to use a figure of 600 tonnes per GWh as an average
power have been carried out in Germany, Denmark and the
value for the carbon dioxide reduction to be obtained from
Netherlands. The assumption made in this scenario is that for
wind generation.
every megawatt of new capacity, the annual market for wind
energy will create employment at the rate of 16 jobs through
This assumption is further justified by the fact that more than
manufacture and component supply. A further 5 jobs will be
50 % of the cumulative wind generation capacity expected
contributed by wind farm development, installation and
by 2020 will be installed in the OECD regions (North
46
THE “GLOBAL WIND ENERGY OUTLOOK” SCENARIO
CUMULATIVE CO2 REDUCTION [MIO TCO2]
140.000,0
120.000,0
Mio.t CO2
100.000,0
Reference
Moderate
Advanced
80.000,0
60.000,0
40.000,0
20.000,0
0,0
2003
2004
2005
2006
2007
2008
2009
2010
2015
2020
2025
2030
2035
Year
MODERATE
Annual CO₂ reduction
[Mio tCO₂]
2040
2045
2050
CO₂ EMISSIONS
Year
REFERENCE
Annual CO₂ reduction
[Mio tCO₂]
Cumulative
CO₂ reduction
[Mio. tCO₂]
Cumulative
CO₂ reduction
[Mio. tCO₂]
2003
50.8
50.8
2003
50.8
50.8
2004
60.0
110.8
2004
60.0
110.8
2005
74.5
185
2005
74.5
185
2006
90.8
276
2006
93.7
279
2007
104
381
2007
111
391
2008
119
499
2008
131
522
2009
133
632
2009
153
675
2010
148
781
2010
179
854
2015
253
1,851
2015
412
2,413
2020
339
3,375
2020
825
5,593
2025
437
5,366
2025
1,320
11,229
2030
535
7,847
2030
1,661
18,918
2035
623
10,786
2035
1,891
27,948
2040
761
14,405
2040
2,206
38,639
2045
836
18,434
2045
2,345
50,100
2050
910
22,836
2050
2,455
62,165
America, Europe and the Pacific). The trend in these countries
Year
ADVANCED
Annual CO₂ reduction
[Mio tCO₂]
is for a significant shift from coal to gas. In other regions the
Cumulative
CO₂ reduction
[Mio. tCO₂]
CO₂ reduction will be higher due to the widespread use of
2003
50.8
50.8
inefficient coal burning power stations.
2004
60.0
110.8
2005
74.5
185
Taking account of these assumptions, the expected annual
2006
95.2
281
2007
116
396
2008
140
536
2009
168
704
2010
202
906
saving in CO₂ from the Reference scenario will be
339 million tonnes in 2020, rising to 910 million tonnes in
2050. The cumulative saving over the whole scenario period
would be 22,800 million tonnes.
2015
576
2,916
2020
1,579
8,363
Under the Moderate scenario the saving would be 825 mil-
2025
2,340
18,540
lion tonnes of CO₂ annually in 2020, rising to 2,455 million
2030
3,100
32,521
tonnes in 2050. The cumulative saving over the scenario
2035
3,475
49,147
period would be just over 62,150 million tonnes.
2040
4,125
68,970
2045
4,436
90,528
2050
4,747
113,640
Under the Advanced scenario, the annual saving in 2020
would increase to 1,582 million tonnes and by 2050 to
4,700 million tonnes. The cumulative saving over the whole
scenario period would be 113,600 million tonnes.
47
Global Wind Energy Outlook –
Research Background
THE GERMAN AERO S PAC E C E N T R E
The German Aerospace Centre (DLR) is the largest engineering research organisation in Germany. Among its specialities
is development of solar thermal power station technologies,
the utilisation of low- and high-temperature fuel cells,
particularly for electricity generation, and research into the
development of high-efficiency gas and steam turbine power
plants.
The Institute of Technical Thermodynamics at DLR (DLR-ITT)
is active in the field of renewable energy research and
technology development for efficient and low emission
energy conversion and utilisation. Working in co-operation
The energy supply scenarios adopted in this report, which both
with other DLR institutes, industry and universities, research
extend beyond and enhance projections by the International
is focused on solving key problems in electrochemical energy
Energy Agency, have been calculated using the MESAP/PlaNet
technology and solar energy conversion. This encompasses
simulation model used for a similar study by DLR covering the
application oriented research, development of laboratory and
EU-25 countries (“Energy revolution: A sustainable pathway to
prototype models as well as design and operation of
a clean energy future for Europe”, September 2005 for
demonstration plants. System analysis and technology
Greenpeace International). This model has then been further
assessment supports the preparation of strategic decisions in
developed by the Ecofys consultancy to take into account the
the field of research and energy policy.
future potential for energy efficiency measures.
Within DLR-ITT, the System Analysis and Technology
E N E RG Y E F F I C I E N C Y S T U DY
Assessment Division has long term experience in the
assessment of renewable energy technologies. Its main
The aim of the Ecofys study was to develop low energy
research activities are in the field of techno-economic
demand scenarios for the period 2003 to 2050 on a sectoral
utilisation and system analysis, leading to the development
level for the IEA regions as defined in the World Energy
of strategies for the market introduction and dissemination
Outlook report series. Energy demand was split up into
of new technologies, mainly in the energy and transport
electricity and fuels. The sectors which were taken into
sectors.
account were industry, transport and other consumers,
including households and services.
SCENARIO BACKGRO U N D
The Ecofys study envisages an ambitious overall development
DLR was commissioned by Greenpeace International and
path for the exploitation of energy efficiency potential, focused
EREC to conduct a study on global sustainable energy
on current best practice as well as technologies available in the
pathways up to 2050. This study, due to be published in early
future, and assuming continuous innovation in the field. The
2007, will result in energy scenarios with emissions that are
result is that worldwide final energy demand is reduced by
significantly lower than current levels. Part of this study
47% in 2050 in comparison to the reference scenario. Energy
examines the future potential for renewable energy sources;
savings are fairly equally distributed over the three sectors. The
together with input from the wind energy industry and
most important energy saving options are the implementation
analysis of regional projections for wind power around the
of more efficient passenger and freight transport and improved
world, this forms the basis of the Global Wind Energy
heat insulation and building design. These together account for
Outlook scenario.
46 % of the worldwide energy savings.
48
THE “GLOBAL WIND ENERGY OUTLOOK” SCENARIO
In this report, the “Reference” energy demand projection is
based on the IEA’s World Energy Outlook 2004, including its
assumptions on population and GDP growth, extrapolated
forward to 2050. It takes account of policies and measures
ECOFYS ENERGY EFFICIENCY MODEL
that were enacted or adopted by mid-2004, but does not
include possible or likely future policy initiatives. It is
STEP 1: REFERENCE SCENARIO
assumed that there will be no changes in national policies on
Development of a reference energy demand scenario for the
nuclear power.
period 2003-2050 per region and per sector.
Two low energy demand projections are then developed
based on the IEA reference scenario - an “Ambitious” energy
STEP 2: LIST OF MEASURES
Establishment of possible energy savings options per sector.
efficiency scenario (which is not used in this report) and a
STEP 3: ENERGY SAVINGS POTENTIAL
more economic “Constraint” version (descripted as the “High
Determination of the energy savings potential per year (2010,
Energy Efficiency” projection for the purposes of this report).
2020, 2030, 2040 and 2050) and per sector. A distinction is
The first takes into account the technical potential whilst the
made between the economic and the technical energy savings
second introduces an economic element. In the Ambitious
potential, leading to two low energy demand scenarios:
version the assumption is made that the best available
technologies are introduced and there is continuous
innovation in the field of energy efficiency. In the Constraint
version the potential for advanced energy saving measures is
tempered by the constraints of cost and other barriers to
implementation.
Ambitious: This is an ambitious energy efficiency scenario
focused on current best practice and technologies available in
the future. It assumes continuous innovation in the field of
energy efficiency.
Constraint (=“High Energy Efficiency” Scenario): This
scenario assumes more moderate energy savings, taking into
account the implementation constraints of energy efficient
technologies in terms of costs and other barriers.
49
ENERGY POLICY ISSUES
AND RECOMMENDATIONS
50
ENERGY POLICY ISSUES AND RECOMMENDATIONS
At a time when governments around the world are in the
An increasing number of countries have established targets
process of liberalising their electricity markets, wind power’s
for renewable energy as part of their greenhouse gas
increasing competitiveness should lead to a higher demand
reduction policies. To date, 49 countries have set targets,
for wind turbines. Distortions in the world’s electricity
including eleven developing countries. These are either
markets, however, created by decades of massive financial,
expressed as specific quantities of installed capacity or as a
political and structural support to conventional technologies,
percentage of energy consumption.
have placed wind power at a competitive disadvantage. New
wind projects have to compete with old nuclear and fossil
The most ambitious target has been set by the European
fuel power stations producing electricity at marginal cost,
Union. In 1997, a White Paper on Renewable Sources of
because the interest and depreciation on the investment has
Energy set the goal of doubling the share of renewable energy
already been paid for by consumers and taxpayers. Renew-
in the EU from 6% to 12% by 2010. This was followed by the
able technologies are also disadvantaged by the failure to
2001 Renewable Electricity Directive, which detailed the aim
penalise conventional fuels for the economic cost of their
(within the White Paper goal) of increasing the amount of
pollution and other hazards. Without political support,
renewable electricity from 14% in 1997 to 21% by 2010. Each
therefore, wind power cannot establish its positive contribu-
European Union member state was allocated its own
tion towards environmental goals and security of supply.
individual target. Although these targets are indicative (not
binding), they have served as an important incentive for
This chapter presents a summary of the current political
political initiatives throughout Europe to increase renewable
frameworks which support wind power and the barriers that
energy’s share of electricity supply. Wind power is expected
need to be overcome in order to unlock the technology’s
to contribute a substantial part of this increase.
potential to become a major contributor to future global
energy supply. Over 48 countries have already introduced
The next step would be for these targets to be made manda-
some kind of policy or law to promote renewables, including
tory, and for their horizon to be extended beyond 2010. But
14 developing countries.
although the European Parliament has proposed a mandatory
target for 20% of EU energy by 2020, with a linked target for
More than 25 years of wind power experience around the
33% of electricity supply, this has not yet been accepted by
world has shown that successful frameworks for the
the European Commission or the 25 member state govern-
development and deployment of wind energy must include
ments. A first step in this direction was taken in March 2006
appropriate measures in each of these five vital areas:
with reference by the EU Heads of State and Government to a
15% target for renewable energy by the year 2015.
• Legally binding targets for renewable energy
• Well designed payment mechanisms
• Grid access and strategic development of grids
Specific Policy Mechanisms
• Appropriate administrative procedures
• Public acceptance and support
A clear market for wind generated power must be defined in
order for a project developer to get involved. As with any
Legally binding Targets for
Renewable Energy
other investment, the lower the risk to the investor, the lower
the costs of supplying the product. The most important
measures for establishing new wind power markets are
Setting targets serves as an important catalyst for govern-
therefore those where the market for generated power is
ments to develop the necessary regulatory frameworks to
clearly defined in national laws, including stable, long term
expand renewables, including financial frameworks, grid
fiscal measures that minimise investor risk and ensure an
access regulation, planning and administrative procedures.
adequate return on investment.
However, targets have little value if they are not accompanied by policies which compensate for distortions in
The main purpose of the wide range of available economic
electricity markets, eliminate market barriers and create an
measures to encourage renewable energy is to provide
environment which attracts investment capital.
incentives for improvements and cost reductions in environ-
51
mental technologies. Markets need to be strong, stable and
Two types of renewable quota systems have been employed
reliable, with a clear commitment to long-term expansion. A
in national wind power markets: tendering systems and green
number of mechanisms have been introduced in different
certificate systems. Under the former, developers compete on
countries to further these aims.
price to construct projects within an allocated quota of
capacity. Under the latter, operating projects are issued with
Overall, there are two main types of incentives to promote
green certificates according to their power output, the price
deployment of renewable energy:
of which varies according to supply and demand.
Fixed Price Systems where the government sets the electricity price (or premium) paid to the developer/producer and
Any policy measure adopted by a government, however,
lets the market determine the amount of capacity which will
needs to be acceptable to the requirements of the invest-
be built. Examples of countries which have adopted this
ment community in order to be effective. There are two key
system in Europe are Germany, Spain, France and Portugal.
issues here:
Payments can be made to developers or producers in the
• The price for renewable power must allow for risk return
form of:
profiles that are competitive with other investment
1. Investment subsidies
options.
2. Fixed feed-in tariffs
3. Fixed premium payments
4. Tax credits
Renewable Quota Systems where the government or other
authority sets the quantity of renewable electricity it would
like to see produced, and leaves it to the market to determine
the price. This system operates in some states in the USA,
where it is referred to as a Renewable Portfolio Standard, and
in a number of EU countries, including the UK, Sweden,
Belgium and Italy.
52
• The duration of a project must allow investors to recoup
their investment.
ENERGY POLICY ISSUES AND RECOMMENDATIONS
Electricity Market Reform
Essential reforms in the electricity sector are necessary if new
renewable energy technologies are to be accepted on a larger
scale. These reforms include:
R E M OVA L O F E L E C T R I C I T Y S E C TO R BARRIERS
Current energy legislation on planning, certification and grid access
has been built around the existence of large centralised power
plants, including extensive licensing requirements and specifications for access to the grid. This favours existing large scale
electricity production and represents a significant market barrier to
renewables. It also fails to recognise the value of not having to
transport decentralised power generation over long distances.
Distortions in the conventional power market include:
REMOVAL OF MARKET DISTORTIONS
1. Institutional and legal barriers
2. Regional and national dominant players
In addition to market barriers there are also market distortions
3. Barriers to third party grid access
which block the expansion of renewable energy. These come in
4. Limited interconnection between regional and national
the form of direct and indirect subsidies, and the fact that the
markets
social and environmental effects of different generation
5. Discriminatory grid connection tariffs
technologies are currently excluded from the costs of electricity
6. Lack of effective “unbundling” by companies of their
production.
production and transmission interests.
A major barrier preventing wind power from reaching its full
One major challenge is to implement the necessary redesigns of
potential is the lack of pricing structures in the energy markets
the grid infrastructure, system management, grid regulation and
that reflect the full costs to society of producing energy.
grid codes so that they reflect the characteristics of renewable
energy technologies. Cross-border electricity interconnectors are
Furthermore, the overall electricity market framework is very
also vital for those markets that are not geographically isolated.
different today from the one that existed when coal, gas, and
nuclear technologies were introduced. For almost a century,
The reforms needed to address market barriers to renewables
power generation has been characterised by national monopo-
include:
lies with mandates to finance investments in new production
• Streamlined and uniform planning procedures and permitting
capacity through state subsidies and/or levies on electricity bills.
systems and integrated least cost network planning;
• Access to the grid at fair, transparent prices and removal of
discriminatory access and transmission tariffs;
• Fair and transparent pricing for power throughout a network,
As many countries move in the direction of more liberalised
electricity markets, those options are no longer available. This
places new generating technologies such as wind power at a
competitive disadvantage.
with recognition and remuneration for the benefits of
embedded generation;
• Unbundling of utilities into separate generation and distribution companies;
• The costs of grid infrastructure development and reinforcement must be carried by the grid management authority
rather than individual renewable energy projects;
• Disclosure of fuel mix and environmental impact to end users to
enable consumers to make an informed choice of power source.
53
Two developments could ease this situation:
According to the International Energy Agency report “Renewable
Energy: Market and Policy Trends in IEA Countries” (2004),
Removal of subsidies to fossil fuel and nuclear power sources
between 1974 and 2002, 92% of all R&D funding ($267 billion)
Subsidies to fully competitive and polluting technologies are
was spent on non-renewables, largely fossil fuel and nuclear
highly unproductive, seriously distort markets and increase the
technologies, compared to 8% ($23 billion) for all renewable
need to support renewables. Removing subsidies to conventional
technologies.
electricity would not only save taxpayers’ money and reduce
current market distortions in the electricity market. It would also
Internalising the social and environmental costs
dramatically reduce the need for renewables support. Wind
of polluting energy
power would not need special provisions if markets were not
The real cost of energy production by conventional energy
distorted by the fact that it is still virtually free for electricity
includes expenses absorbed by society, such as health impacts
producers to pollute.
and local and regional environmental degradation – from
mercury pollution to acid rain – as well as the global impact of
Subsidies artificially reduce the price of power, keep renewables
climate change.
out of the market place, and prop up increasingly uncompetitive
technologies and fuels. Eliminating direct and indirect subsidies
Hidden costs also include the waiving of nuclear accident
to fossil fuels and nuclear power would help move towards a
insurance, which is either unavailable or too expensive to be
level playing field across the energy sector.
covered by the nuclear operators. The costs of decommissioning
nuclear plants, storage of high level nuclear waste and the health
Conventional energy sources currently receive an estimated
costs associated with mining, drilling and transportation are
$250 billion in subsidies per year worldwide, according to the
equally not added to the real economics of fossil and nuclear
United Nations Development Programme. This heavily distorts
power.
markets. The UNDP World Energy Assessment gives the annual
cost of global subsidies for fossil fuels and nuclear energy
Environmental damage should be avoided at source. Translated
between 1995 and 1998 as $215 billion, compared with
into energy generation that would mean that, ideally, produc-
$9 billion for renewables and energy efficiency.
tion of energy should not pollute and it is the energy producers’
responsibility to prevent it. If they do pollute they should pay an
Research and development funding can make a crucial difference
amount equal to the damage their production causes to society
as to whether a technology becomes commercially viable,
as a whole.
particularly at the early stage of development. It also accounts
for about 40% of continued cost reductions in the technology.
54
ENERGY POLICY ISSUES AND RECOMMENDATIONS
International Action on Climate
Change
Final ratification of the Kyoto Protocol to the United Nations
Framework Convention on Climate Change (UNFCC) in
February 2005 was a vital first step towards protecting the
climate from dangerous anthropogenic climate change. As a
legally binding international instrument, the Protocol heralds
the beginning of carbon constrained economies. In time, this
will mean an increased demand for low and carbon-free
power production. Protecting the climate will demand more
and deeper cuts in greenhouse gas emissions, which will
further increase the market for renewable energy technologies such as wind power.
The international issue now is what objectives for reduction
The European Commission – through the ExternE project – has
in greenhouse gases will follow on from the present 2008-12
attempted to quantify the true costs, including environmental
Kyoto target period. Meeting in March 2005, EU heads of
costs, of electricity generation. ExternE estimates that the cost
state recommended that “reduction pathways… in the order
of producing electricity from coal or oil would double, and from
of 15-30% by 2020, compared to the baseline envisaged in
gas increase by 30%, if their external costs, in the form of
the Kyoto Protocol… should be considered.” At the Montreal
damage to the environment and health, were taken into
UNFCC conference (COP-11) in December 2005 delegates
account. The study further estimates that these costs amount to
agreed to start “a process to consider further commitments”.
1-2% of EU GDP, or between €85 billion and €170 billion/
It is critical that the next round of emissions reductions be
annum, not including the additional costs of the impacts of
agreed soon, so that the market is clear that the strong signal
human-induced climate change on human health, agriculture
sent by the entry into force of the Kyoto Protocol will
and ecosystems. If those environmental costs were levied on
continue beyond 2012.
electricity generation, many renewables, including wind power,
would not need any support to successfully compete in the
Emissions trading in the form it currently operates, both at a
marketplace.
European level and through the international mechanisms
(Clean Development and Joint Implementation) established
As with other subsidies, such external costs must be factored
under Kyoto, is unlikely to provide a major boost for wind
into energy pricing if competition in the market is to be truly fair.
energy in the short term. The first steps in emissions trading
This requires that governments apply a “polluter pays” system
within the European Union have sent a good signal to
that charges the emitters accordingly, or applies suitable
markets about the costs of carbon-intensive energy produc-
compensation to non-emitters. Adoption of polluter pays
tion, but they do not go far enough and need to be strength-
taxation to polluting electricity sources, or equivalent compen-
ened in the next round. In particular, free allocation of
sation to renewable energy sources, and exclusion of renewables
allowances should be replaced by 100% auctioning - to avoid
from environment-related energy taxation, is essential to help
market distortions and apply the polluter pays principle.
achieve fairer competition in the world’s electricity markets.
Emissions trading should not be seen as a substitute for
environmental taxes or policies to support renewable energy.
55
Policies to address these issues must include:
• A defined and increasing percentage of overall energy
sector lending directed to renewable energy projects.
• A rapid phase out of support for conventional, polluting
energy projects.
Action by International Bodies
Against the backdrop of ever rising oil prices, political leaders
have slowly started to acknowledge that the global energy
challenge requires urgent action in three areas: securing
global energy supply, meeting rising energy demand and
tackling the threat of climate change. These issues are now
higher on the political agenda than ever before. Moreover, a
better understanding of energy issues and dramatic advances
Reform of International Financing
in modern technologies provide the opportunity for tackling
the energy challenge in an efficient and sustainable way.
Demand for energy, particularly electricity, is increasing
An opportunity for action is provided by international
worldwide. This is especially the case in developing countries,
government meetings such as the G8 Summits, bringing
which also rely heavily on export credit agencies (ECAs) and
together the leaders of the United States, Russia, Italy, Japan,
multi-lateral development banks to provide financing for
Germany, France, Canada and the UK, and the UN’s Commis-
energy and other industrial projects.
sion on Sustainable Development (CSD).
To be consistent with the emerging international regime for
In July 2005, the G8 members, plus Brazil, China, India,
limiting greenhouse gas emissions, ECAs and other interna-
Mexico and South Africa, agreed a dialogue on climate
tional financial institutions which support or underwrite
change, clean energy and sustainable development. These
projects around the world must have policies consistent with
Partners, along with the World Bank and IEA, agreed to work
the need for limiting greenhouse gas emissions and climate
together on a number of issues, including the deployment of
change protection. At the same time there needs to be a
renewable energy technology. The IEA has outlined a G8
transition plan and flexible timeframes to avoid undue
Gleneagles Programme, which focuses on the following areas:
hardships on developing country economies overly reliant on
Alternative energy scenarios and strategies; Energy efficiency
conventional energy sources and exports, whilst also
in buildings, appliances, transport and industry; Cleaner fossil
recognising that meeting the development goals for the
fuels; Carbon capture and storage; Renewable energy; and
world’s poorest nations will require subsidies for the
Enhanced international co-operation.
foreseeable future.
The IEA is to publish a report on Alternative Energy Technologies, and a report on progress on the work programme is to
be provided at the G8 Summit in St Petersburg in July 2006
and at the Gleneagles Dialogue Ministerial in Mexico in the
autumn.
56
ENERGY POLICY ISSUES AND RECOMMENDATIONS
Policy Summary
N AT I O N A L P O L I C I E S
1. Establish legally binding targets for renewable energy
2. Create legally based market deployment instruments
3. Provide defined and stable returns for investors by ensuring
that
• The price for renewable power should allow for risk return
profiles that are competitive with other investment options
• The duration of a project should allow investors to recoup
their investment
4. Reform electricity markets by ensuring that
• Electricity sector barriers to renewables are removed
• Market distortions are removed
• Subsidies to fossil fuel and nuclear power sources are
An earlier report by the G8 countries’ International Climate
Change Task Force, “Meeting the climate challenge”,
published in January 2005, made several recommendations in
halted
• The social and environmental costs of polluting energy are
internalised
relation to both climate change and renewable energy. These
included that:
I N T E R N AT I O N A L P O L I C I E S
• A long-term objective be established to prevent global
1. Implement the Kyoto Protocol and post-2012 emission
average temperature from rising more than 2°C (3.6°F)
above the pre-industrial level, to limit the extent and
magnitude of climate-change impacts.
• G8 Governments establish national renewable portfolio
standards to generate at least 25% of electricity from
renewable energy sources by 2025, with higher targets
needed for some G8 Governments.
• Governments remove barriers to and increase investment
in renewable energy and energy efficient technologies and
reduction targets
2. Reform the operation of Export Credit Agencies,
Multi-lateral Development Banks and International Finance
Institutions by ensuring
• A defined and increasing percentage of overall energy
sector lending is directed to renewable energy projects
• A rapid phase out of support for conventional, polluting
energy projects
3. Implement key G8 task force recommendations
practice such measures as the phase-out of fossil fuel
subsidies.
Implementation of these recommendations would support
the achievement of the targets outlined in this report.
Energy for Sustainable Development and Climate Change are
two of the thematic priorities of the 2006 and 2007 sessions
of the UN Commission on Sustainable Development, which
will review progress made by the world’s governments in
implementing the agreements of the World Summit on
Sustainable Development in 2002. These sessions provide a
key opportunity for ministers from around the world to focus
on the promotion of renewable energy.
57
ANNEX
REFERENCE
Year
Cumulative
[MW]
Growth rates
Annual [MW]
incl. Repowering
Annual
avg. WTG
[MW]
Capacity factor
[%]
Wind power
Wind power
penetration of
penetration of
Production Worlds electricity Worlds electricity
[TWh] in % - Reference in % - Efficiency
2005
59,078
17%
11,524
1,4
24%
2006
69,139
15%
10,061
1,4
25%
124
151
2007
79,510
13%
10,371
1,5
25%
174
2008
90,222
12%
10,713
1,5
25%
198
2009
101,311
11%
11,089
1,5
25%
222
2010
112,818
10%
11,506
1,5
25%
247
2015
171,738
7%
13,074
2,0
28%
421
2020
230,658
6%
15,547
2,0
28%
566
2025
297,208
4%
24,774
2,0
28%
729
2030
363,758
3%
24,816
2,0
28%
892
2035
423,258
3%
24,974
2,0
28%
1,038
2040
482,758
2%
27,447
2,0
30%
1,269
2045
530,007
2%
34,224
2,0
30%
1,393
2050
577,257
0%
34,266
2,0
30%
1,517
Growth rate
Annual [MW]
incl. Repowering
Annual
avg. WTG
[MW]
Capacity factor
[%]
1.5
1.8
2.7
3.6
3.5
5.0
4.1
6.3
4.0
6.6
MODERATE
Wind power
Wind power
penetration of
penetration of
Production Worlds electricity Worlds electricity
[TWh] in % - Reference in % - Efficiency
Year
Cumulative
[MW]
2005
59,078
21%
11,524
1,4
24%
124
2006
71,344
19%
12,266
1,4
25%
156
186
2007
84,837
18%
13,493
1,5
25%
2008
99,862
17%
15,025
1,5
25%
219
2009
116,637
17%
16,774
1,5
25%
255
2010
136,543
16%
19,906
1,5
25%
299
2015
279,682
15%
37,972
2,0
28%
686
2020
560,445
13%
77,365
2,0
28%
1,375
2025
897,014
6%
75,507
2,0
28%
2,200
2030
1.128,707
3%
58,260
2,0
28%
2,768
2035
1.285,087
2%
65,057
2,0
28%
3,152
2040
1.399,133
1%
97,737
2,0
30%
3,677
2045
1.487,253
1%
91,476
2,0
30%
3,909
2050
1.556,901
0%
70,957
2,0
30%
4,092
Growth rate
Annual [MW]
incl. Repowering
Annual
avg. WTG
[MW]
Capacity factor
[%]
0.8
0.8
1.8
2.2
6.6
8.6
10.8
15.6
11.8
18.1
10.8
17.7
ADVANCED
Year
58
Cumulative
[MW]
Wind power
Wind power
penetration of
penetration of
Production Worlds electricity Worlds electricity
[TWh] in % - Reference in % - Efficiency
2005
59,078
23%
11,524
1,4
24%
124
2006
72,449
20%
13,371
1,4
25%
159
2007
88,080
15,631
1,5
25%
193
2008
106,560
18,481
1,5
25%
233
2009
127,928
21,368
1,5
25%
280
2010
153,759
25,831
1,5
25%
337
2015
391,077
70,478
2,0
28%
959
2020
1.072,928
17%
186,825
2,0
28%
2,632
2025
1.589,792
8%
117,014
2,0
28%
3,899
2030
2.106,656
4%
117,014
2,0
28%
5,167
2035
2.361,433
2%
142,260
2,0
28%
5,792
2040
2.616,210
2%
142,260
2,0
30%
6,875
2045
2.813,256
1%
156,423
2,0
30%
7,393
2050
3.010,302
1%
156,423
2,0
30%
7,911
0.8
0.8
2.1
2.4
12.6
16.5
20.1
29.1
22.1
33.9
20.9
34.2
ANNEX
REFERENCE
Year
CO₂ reduction
[annual
Mio tCO₂]
CO₂ reduction
[cumulative
Mio tCO₂]
Progress ratio
Costs [€/MW]
Investment [T€]
Jobs Total
2005
74.5
185
90%
1,000
11.524,000
150,120
2006
90.8
276
90%
983
9.889,197
163,200
2007
104
381
90%
968
10.041,461
197,208
2008
119
499
90%
955
10.232,704
234,698
2009
133
632
90%
943
10.461,858
242,974
2010
148
781
90%
933
10.732,388
241,484
2015
253
1,851
92%
900
11.772,485
280,866
2020
339
3,375
92%
879
13.662,230
322,729
2025
437
5,366
94%
865
21.433,038
463,332
2030
535
7,847
94%
854
21.205,467
481,624
2035
623
10,786
96%
849
21.209,089
480,290
2040
761
14,405
96%
845
23.185,273
531,723
2045
836
18,434
98%
843
28.855,459
638,180
2050
910
22,836
98%
842
28.841,545
653,691
CO₂ reduction
[annual
Mio tCO₂]
CO₂ reduction
[cumulative
Mio tCO₂]
Progress ratio
Costs [€/MW]
Investment [T€]
Jobs Total
M ODERATE
Year
2005
74.5
185
90%
1,000
11.524,000
150,120
2006
93.7
279
90%
979
12.011,158
194,809
2007
111
391
90%
961
12.963,314
252,185
2008
131
522
90%
944
14.179,355
316,841
2009
153
675
90%
928
15.564,006
350,120
390,408
2010
179
854
90%
912
18.154,695
2015
412
2,413
92%
857
32.546,652
711,520
2020
825
5,593
92%
807
62.449,022
1.310,711
2025
1,320
11,229
94%
784
59.164,707
1,304,506
2030
1,661
18,918
94%
773
45.009,206
1.141,016
2035
1,891
27,948
96%
769
49.996,767
1.227,882
2040
2,206
38,639
96%
766
74.854,172
1.663,578
2045
2,345
50,100
98%
765
69.973,078
1.614,825
2050
2,455
62,165
98%
764
54.227,304
1.386,085
CO₂ reduction
[annual
Mio tCO₂]
CO₂ reduction
[cumulative
Mio tCO₂]
Progress ratio
Costs [€/MW]
Investment [T€]
Jobs Total
2005
74.5
185
90%
1,000
11.524,000
150,120
2006
95.2
281
90%
977
13.068,143
199,300
2007
116
396
90%
956
14.947,434
261,405
2008
140
536
90%
936
17.301,934
381,523
ADVANCED
Year
2009
168
704
90%
917
19.603,796
434,676
2010
202
906
90%
899
23.220,095
492,384
2015
576
2,916
92%
827
58.320,108
1.238,311
2020
1,579
8,363
92%
756
141.249,518
2.899,776
2025
2,340
18,540
94%
738
86.317,305
1.996,795
2030
3,100
32,521
94%
725
84.827,690
2.143,587
2035
3,475
49,147
96%
722
102.653,895
2.428,819
2040
4,125
68,970
96%
719
102.229,545
2.506,871
2045
4,436
90,528
98%
718
112.243,052
2.732,703
2050
4,747
113,640
98%
717
112.090,129
2.795,873
59
ABOUT GWEC
G LO B A L R E P R E S E N TATION FOR THE WIND ENERGY SECTOR
GWEC is the voice of the global wind energy sector. GWEC brings
together the major national, regional and continental associations
representing the wind power sector, and the leading international
wind energy companies and institutions. With a combined
membership of over 1,500 organisations involved in hardware
manufacture, project development, power generation, finance and
consultancy, as well as researchers, academics and associations,
GWEC’s member associations represent the entire wind energy
community.
T H E M E M B E R S O F G WEC REPRESENT:
• Over 1,500 companies, organisations and institutions in more than
50 countries
• All the world’s major wind turbine manufacturers
• 99 % of the world’s nearly 60,000 MW of installed wind power
capacity
G LO B A L W I N D E N E RGY COUNCIL (GWEC )
Renewable Energy House
63-65 Rue d’Arlon
1040 Brussels
Belgium
Greenpeace is a global organisation that uses non-violent direct
action to tackle the most crucial threats to our planet‘s biodiversity
and environment. Greenpeace is a non-profit organisation, present in
40 countries across Europe, the Americas, Asia and the Pacific. It
speaks for 2.8 million supporters worldwide, and inspires many
millions more to take action every day. To maintain its independence,
Greenpeace does not accept donations from governments or
corporations but relies on contributions from individual supporters
and foundation grants.
Greenpeace has been campaigning against environmental degradation since 1971 when a small boat of volunteers and journalists sailed
into Amchitka, an area north of Alaska, where the US Government
was conducting underground nuclear tests. This tradition of ‘bearing
witness’ in a non-violent manner continues today, and ships are an
important part of all its campaign work.
GREENPEACE INTERNATIONAL
Ottho Heldringstraat 5
1066 AZ Amsterdam
The Netherlands
T: 31 20 7182000
F: 31 20 5148151
www.greenpeace.org
[email protected]
T: 32 2 100 4029
F: 32 2 546 1944
www.gwec.net
[email protected]
Scenario by GWEC, Greenpeace International, DLR and Ecofys
Text edited by Crispin Aubrey, Angelika Pullen, Arthouros Zervos,
Sven Teske
Design by bitter Grafik & Illustration, Hamburg
Photos courtesy of Elsam; Enercon; EWEA; Gamesa; Greenpeace;
IVPC; JWEA; Lucky Wind; Npower Renewables Ltd; Petitjean;
Shell Wind Energy;Vestas; Vicson Chua; Vision Quest Windelectric;
Winter.
Printed on recycled paper
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