Wind energy now accounts for 17% of Europe's total installed power generation capacity, and was the most installed power generation source last year, representing for 51% of new capacity, WindEurope said.
Only natural gas generation, with 186GW of capacity, remains above wind, now on 154GW. Wind takes over from coal generation, on 152GW, after member states decommissioned 7.5GW of coal capacity in 2016.
"In 2016 wind energy generated enough electricity to meet 10.4% (296TWh) of the... total electricity demand," said WindEurope.
Of the total installed capacity, 10.9GW was installed onshore, with just 1.6GW added offshore – half the total of 2015.
France (1.56GW), Turkey (1.4GW), the Netherlands (887MW), Finland (384MW) and Lithuania (178MW) all had record installation years, according to WindEurope.
Investment in Europe's wind sector increased 5% compared with 2015, reaching €27.5 billion, mostly due to a 39% increase in offshore wind funding.
WindEurope CEO Giles Dickson said while the 2016 figures are encouraging, the outlook is not: "With all the talk about the transition to low-carbon, things should be looking good long-term for the wind industry in Europe. But they're not. Government policy on energy across Europe is less clear and ambitious than it was a few years ago.
"We still have dysfunctional electricity markets that are not fit for renewables. And we're lacking long-term price signals to support investment," Dickson added.
Earlier in the week (6 February), WindEurope launched its "Daily Wind Tool" – a web-based application offering statistics on daily production of Europe's wind power fleet including generation and capacity factors.
The data is gathered from system operators from the region, power exchanges, the European Commission's statistical office Eurostat and WindEurope. Data is broken down into member states so users can compare each country.