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Windicator global wind capacity analysis

Global wind power growth is back on track after the dip in 2010 induced by the worldwide financial crisis.

With the addition of at least 14GW of wind power stations to the grid in the first half of 2011, world wind capacity has sailed past the 200GW milestone. The volume of newly operational gigawatts is the largest ever for a first half-year. That record is aided by the grid connection of a number of Chinese wind farms that were built during 2010 but were not put online until recently. Aside from China, the top-ten growth countries have provided 6GW so far this year, with India and the US leading the way (see table, page 80).

Construction of wind farms is a seasonal business, with far greater growth in the latter half of any year than in the first six months. Indeed, the pattern of the past 25 years is for no more than a fifth to one quarter of the final annual total to be installed in the first six months. The roughly 14MW achieved so far in 2011 compares with about 8GW installed in the first half of 2009, the sector's all-time boom year, which ended with 38GW of wind capacity being added in 12 months. That represented 32% more new capacity than during 2008.

Healthy signs

If the seasonal trends of the past 25 years are repeated in 2011, the global wind industry is on track to deliver between 55-60GW of new capacity in a single year, well up on the 40GW projections being made just a couple of months ago and a clear all-time record. Assuming a possible 55GW added to global operating wind capacity in 2011 based on the impressive first half year's progress, the annual addition would be 47% more than that achieved in the boom year of 2009. It would bring the world total to around 245GW - 10GW more than projected by the Global Wind Energy Council (GWEC).

Past trends, however, were connected to predictable growth curves for the wind sector's traditional markets, which consisted mainly of Europe's strongest economies as well as North America, India and China. With growth curves in Europe's strong markets flattening as they reach maturity, China's curve climbing steeply, shifting market foundations in the US rekindling the old pattern of rollercoaster boom and bust, and the emergence of a series of promising new markets in eastern Europe and Latin America for which no pattern yet exists, national growth trends of the past may no longer be an accurate indicator of future trends.

Cautious projection

Donning a mantle of caution, a more conservative projection of global capacity additions in 2011, based on a continuation of the exponential growth rate since 2006, indicates a cumulative tally of 240GW this year and just over 300GW by the end of 2012. Should the oft-repeated projections of market observers come true and the global wind sector's compound annual growth rate of the past many years drop from 27-28% to a more sustainable 15%, the 300GW would not be reached until 2013. Flat growth in Germany and declining growth curves in countries such as Spain and the Netherlands may be enough to confirm last year's abrupt flattening of the global curve from its steep rise of the decade until the effects of the global financial crisis took hold.

If so, earlier projections of 40GW of new wind capacity for this year by GWEC and others would be on target, although they now seem to be a worst-case scenario rather than a best-case estimate. Compared with 2010, the addition of 40GW in 2011 would demonstrate a dramatic recovery of the global wind market, which last year saw an 18.5% drop in new capacity online compared with 2009. But it would also demonstrate a far slower recovery than the first half year's progress is indicating.

Robust outlook

Such a cautious projection does not seem warranted, however. The US has already put more than 2GW online this year and is moving towards a potential boom year in 2012, as project constructors rush to get wind turbines connected before the end of the year to be certain to qualify for the main US market driver, a ten-year tax credit on revenues from the sale of wind-produced electricity. The credit is under threat of expiry without renewal for 2013 and beyond. All previous years in which the US production tax credit has faced expiry have proved to be giga years for wind installations. In China, the efforts of central government to get the country's wildfire wind growth under control are unlikely to be reflected in a market slowdown immediately. Meanwhile, India and Latin America are ramping up their build rates, as are markets in eastern Europe. Other major markets are on course for a good year, including the UK, Italy, Sweden and Canada, while France, Italy and Greece are holding steady, as is Germany.

It took 17 years for the wind industry to build its first 100GW and just over three years to build the next 100GW. Achieving a further 100GW within two years is certainly not beyond the bounds of feasibility. The wind industry has surprised its competitors before and can certainly surprise them again.

Market drivers

Wind's fundamental economic drivers remain. In many locations it is fully competitive with fossil-fuel generation and an increasing proportion of installed capacity is becoming a least-cost option. The uncertainty of nuclear costs compared with the certainty of wind power costs has been thrown sharply into focus in recent weeks as the economic fallout from the Fukushima reactor's accident in Japan spreads. The latest dash to gas is viewed by many as a short-sighted path to over dependence on a finite resource with costs that could escalate rapidly and unexpectedly, as they have done before. Perhaps most significantly in times of job scarcity, more jobs are created for each installed megawatt of wind power than by yesteryear's power-production technologies.

The quarterly Windicator is an indicator of the state of play. Changes in the table can be corrections received rather than additions or subtractions. We welcome corrections. The US total is based on AWEA data and the German total on Betreiber-Datenbasis data.

China overtakes US to become number one Operating wind power capacity
around the world (MW)

  End 2010 Jul-11 Extra MW Change %
EUROPE        
Germany 27,126 27,680 554 2
Spain 20,674 20,819 145 1
Italy 5,798 6,084 286 5
France 5,686 5,831 145 3
UK 5,248 5,559 311 6
Portugal 3,898 4,229 331 8
Denmark 3,805 3,808 3 0
Sweden 2,163 2,576 413 19
Netherlands 2,251 2,251 0 0
Ireland 1,428 1,428 0 0
Greece 1,205 1,313 108 9
Turkey 1,278 1,278 0 0
Poland 1,180 1,180 0 0
Austria 1,011 1,011 0 0
Belgium 911 911 0 0
Romania 462 535 73 16
Bulgaria 375 465 90 24
Norway 448 448 0 0
Hungary 295 330 35 12
Czech Republic 215 215 0 0
Finland 197 197 0 0
Lithuania 154 179 25 16
Estonia 149 158 9 6
Ukraine 87 87 0 0
Cyprus 82 82 0 0
Croatia 69 69 0 0
Switzerland 44 42 -2 -5
Luxembourg 42 42 0 0
Latvia 31 31 0 0
Russia 11 11 0 0
Slovakia 5 5 0 0
  86,328 88,854 2,526 3
MIDDLE EAST/AFRICA      
Egypt 550 550 0 0
Morocco 287 287 0 0
Iran 91 92 1 1
Tunisia 54 54 0 0
South Africa 45 45 0 0
Israel 6 6 0 0
Cape Verde 2 2 0 0
Kenya 5 10 5 100
Reunion Island 10 10 0 0
Jordan 2 2 0 0
TOTAL 1,052 1,058 6 1
ASIA PACIFIC        
China 38,280 45,440 7,160 19
India 13,066 14,159 1,093 8
Japan 2,304 2,304 0 0
Australia 1,880 1,991 111 6
New Zealand 506 607 101 20
Taiwan 436 436 0 0
South Korea 364 364 0 0
Philippines 33 33 0 0
Pacific Islands 33 33 0 0
Vietnam 30 30 0 0
Thailand 5 5 0 0
Sri Lanka 3 3 0 0
Bangladesh 1 1 0 0
TOTAL 56,941 65,406 8,465 15
LATIN AMERICA      
Brazil 930 1,000 70 8
Mexico 717 717 0 0
Chile 168 168 0 0
Costa Rica 125 125 0 0
Caribbean 66 66 0 0
Argentina 55 55 0 0
Uruguay 40 40 0 0
Nicaragua 40 40 0 0
Colombia 20 20 0 0
Cuba 12 12 0 0
Ecuador 2 2 0 0
Falkland Islands 2 2 0 0
Peru 1 1 0 0
TOTAL 2,178 2,248 70 3
         
NORTH AMERICA      
Texas 10,082 10,141 59 1
California 3,252 3,679 427 13
Iowa 3,672 3,672 0 0
Minnesota 2,209 2,514 305 14
Oregon 2,278 2,480 202 9
Washington 2,176 2,428 252 12
Illinois 1,862 2,251 389 21
Oklahoma 1,482 1,482 0 0
North Dakota 1,424 1,424 0 0
Wyoming 1,412 1,412 0 0
New York 1,274 1,348 74 6
Colorado 1,299 1,299 0 0
Indiana 1,250 1,250 0 0
Kansas 1,074 1,074 0 0
South Dakota 709 784 75 11
Pennsylvania 748 751 3 0
New Mexico 700 700 0 0
Idaho 353 471 118 33
Wisconsin 469 469 0 0
Missouri 457 459 2 0
West Virginia 414 414 0 0
Montana 386 386 0 0
Utah 223 325 102 46
Nebraska 213 294 81 38
Maine 266 266 0 0
Michigan 164 164 0 0
Arizona 128 128 0 0
Ohio 10 109 99 990
Hawaii 63 93 30 48
Maryland 70 70 0 0
Massachusetts 18 41 23 128
Tennesse 29 29 0 0
New Hampshire 25 25 0 0
New Jersey 8 8 0 0
Alaska 8 8 0 0
Vermont 6 6 0 0
Delaware 2 2 0 0
Rhode Island 1 1 0 0
United States 40,216 42,457 2,241 6
Canada 4,015 4,589 574 14
TOTAL 44,231 47,046 2,815 6
         
WORLD 190,730 204,612 13,882 7

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