Windicator: Highest ever year-on-year increase in capacity reported

WORLDWIDE: The wind market is on a healthy course. Since the start of the year, 17GW of new generation capacity have been commissioned globally. More capacity, particularly in China , has been completed but not yet connected. Total global capacity is now more than 41GW above the level this time last year. This is the second-highest ever year-on-year increase and suggests that the global total may be between 230-240GW by the end of the year. Another way of looking at the figures is that capacity is now 25% higher than at the corresponding period last year. However, if progress in China slows down, the end-of-year capacity could be below 230GW.

The current data can be seen here. It reflects the situation roughly halfway through the third quarter, on average. Some countries regularly report up-to-the-minute data, while others only update their figures on a monthly or quarterly basis. So care must be taken in interpreting the numbers.

Click here to view worldwide capacity tables

With this proviso, progress in Europe has slowed slightly, while the Asian-Pacific market is powering ahead — largely fuelled by China. As there is some uncertainty over data for China, the figure is unchanged from the last quarter. Some projects may not yet be connected to the grid, but the rate of growth is such that the figure quoted may soon be exceeded. On the other hand, projections for future growth could change substantially if Chinese progress slows, as seems likely if additional growth is limited to 26GW between now and 2015. That would bring cumulative installed capacity in China to around 70GW in 2015, rather than the earlier target of 90GW.

In the Middle East and Central and South America progress is sluggish, although there are developments in the pipeline in South America. In the US, the data in the table suggests only modest growth, but this may be misleading as there are several large projects in the pipeline.

The competitive position of wind in relation to other generation sources is generally improving. The price of crude oil is 20% higher than it was a year ago, although lower than the peak around the turn of the year. Gas prices in the US have been steadily low, but in Europe and elsewhere they are roughly double US prices and appear to be on a rising trajectory. That makes wind an attractive alternative for power generation, even before the price of carbon is factored in.

Wind-turbine prices now average around €1 million per megawatt across Europe. Another boon to wind developers is that some turbine prices have dropped, particularly in the US, as suppliers struggle to find buyers. According to a recent report from the US Department of Energy’s Lawrence Berkeley National Laboratory, prices have plunged by an average 20% since 2008, and in some cases up to 33%.

Meantime, manufacturers continue to make small but useful innovations to improve performance. The trend towards larger machines continues, but there is a feeling that onshore sizes may not increase beyond around 2-3MW for the most part.
Wind continues to benefit from the fallout from the 11 March Japanese earthquake; generation cost comparisons with nuclear are now even more difficult to make, given the uncertain effect of any necessary modifications post-Fukushima. These will inevitably increase nuclear costs. Most wind development continues to be onshore, but there is a flurry of preparation for offshore wind. That is particularly the case in the UK and Germany but, more recently, also in the US.

Offshore generation costs can be twice those of onshore, but several published analyses forecast significant reductions. There is some regulatory uncertainty in the UK , as the government continues to develop its proposals for electricity market reform. So far, developers and financiers appear to be split fairly evenly over the merits of these proposals.

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.

Correction: Totals for North American installed capacity were stated incorrectly in the July Windicator table. The figures should have read: 44,231MW (end 2010); 47,046MW (July 2011); 2815MW (extra MW); 6% (change). We regret the error.

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