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Windicator: Global perspective

WORLDWIDE: For the first time in two decades, the world wind market retracted compared with the previous year, shrinking 18.5%. Just 31.5GW of new capacity went online, compared with a reported 38.6GW in 2009, a drop in market volume of between 3.6GW and 7GW, depending on definitions of online capacity against installed capacity in China (see box, page 106). Never before had the wind industry suffered a year of excess manufacturing capacity caused by global market decline.

The good news is that recovery is under way, with projections of 40GW of new wind to come online in 2011. Despite last year's decline, wind power's five-year growth rate is still tracking at an impressive 27%, with operating capacity continuing to double every three-and-a-half years. By the end of 2010, global wind power had risen to 190.7GW, providing 2.2% of global electricity - using a 25% average capacity factor - a figure that will hit 5% well before 2015.

The headline trends, however, mask a new world wind order. The combined 19% decline in the top ten most active national markets in 2010, which together delivered 86% of new capacity, was far from evenly spread. Previously strong growth markets in Europe shrank and the mighty US contracted year-on-year by a massive 4.7GW (see chart, page 106). Meantime, China and India saw steady growth as did Britain and several new markets. But it was not enough to fill a hole the size of that left by the US. Of the Windicator's five regions, only the Asian market grew, with the others either contracting or merely treading water.

Notably, Europe's emerging wind markets compensated for more than half the combined retraction of that region's leaders. While new capacity in Spain last year was 880MW less than in 2009, in Germany 520MW less and in Portugal 360MW less, Europe as a whole only saw a dip of under 500MW. Much of the nearly 2GW total contraction by Europe's traditional markets was made up for by strong growth in the UK and Romania, both of which installed around 450MW more than in 2009, and relatively strong growth in Turkey, Bulgaria and newcomer Cyprus. The UK, one of only three countries in the world to record significant wind growth, made its mark largely through offshore development as did Belgium, which installed 300MW more than in 2009.

Whether the global wind market contraction in 2010 was less than for the electricity sector as a whole remains to be seen, but wind's competitive position improved. The cost of electricity from thermal technologies rose and the cost of onshore wind generation stayed unchanged. Events in Japan and the Arab world have since served to push up gas prices, with coal prices expected to go up too and the price of carbon emission credits already rising. As thermal electricity prices inevitably follow, so too will the proportion of wind stations generating electricity at fully competitive prices. Wind remains a lowest-cost clean source. It is half the cost of solar at its cheapest, with photovoltaic up to three times wind's cost and concentrated solar power up to four-and-a-half times more expensive than wind. The International Energy Agency reports carbon capture and storage adds 74-82% to the price of coal and gas plant, making their electricity generation cost higher than that of wind on land.

The quarterly Windicator is an indicator of the state of play. Changes in the table (see page 108) can be corrections received rather than additions or subtractions. We welcome corrections. The US total is based on AWEA data.

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