Growth slows but still a huge market -- Germany holding its own

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Germany's wind sector steamed into the new year with respectable installation figures for 2004 and a reasonable outlook for 2005 considering the maturity of the market, but found itself once more under a hail of attack from the conventional energy sector, from the media and from federal economy minister Wolfgang Clement. Popular news magazine Der Spiegel caused a stir with claims that further expansion of wind power raises the danger of electricity blackouts. Clement is accused of deliberately misinterpreting the size of the bill for green electricity to allow him to deliver a broadside to the renewable energy law which his party, the Social Democrats, amended last year in partnership with the Greens.

Despite predictions that darkened as 2004 advanced, 2,036.9 MW of new wind plant were installed in 2004, provided by 1,201 turbines. The annual increase was down 23% on 2003, but at more than 2 GW in a single year, Germany still remains the world's largest wind power market, although these days it is running neck-and-neck with Spain.

Total German wind power capacity was 16,628.75 MW at the end of last year, made up of 16,543 turbines. The fleet generated 25 TWh, or 4% of gross national electricity generation of 606.5 TWh, according to the federal economics ministry. This compares with 19 TWh in 2003, or 3% of gross generation of 603.8 TWh.

While the relatively windy coastal state of Lower Saxony led the field among Germany's 16 states by adding 553 MW last year, the inland states of Brandenburg and North Rhine Westphalia followed with 373 MW and 231 MW respectively. Mecklenburg-Vorpommern, with its long Baltic Sea coastline, managed only 91 MW. Schleswig-Holstein, with North Sea and Baltic Sea coastlines -- and where wind energy originally took off in Germany over 15 years ago -- saw just 178 MW of new capacity. With 2174 MW, much of that provided by small turbines, sites for more wind development are hard to find in Germany's most northern state, which borders Denmark.

Pack leaders

Market leader among turbine manufacturers in Germany is once again Enercon with a substantial 42% market share, up 8% on its 2003 performance. It is followed by Vestas, whose merger with NEG Micon pushes its share to 30%. GE Energy's market share dropped by 3.5% compared with 2003, to just 7.7%, leaving the American giant beaten by small German company Repower Systems with 9.2%. AN Windenergie, as Bonus, now Siemens Wind Power, is known in Germany lost ground, as did Nordex (table). Spain's Gamesa appears in German statistics for the first time, albeit with a share of less than 1%.

Looking ahead, "In a cautious forecast for 2005, we expect an expansion of 1700 MW in 2005," said Jens Peter Molly of the Deutsche Windenergie Institut, a wind power consultant company. "Since repowering and the offshore market will not make a substantial contribution until the end of the decade, the onshore market remains the lynchpin of the wind market," adds Peter Ahmels of German wind association Bundesverband Windenergie. Norbert Gies, from the power systems division of engineering association VDMA, points out that wind turbine exports are growing, but he urges for a swifter development of offshore business to maintain industry momentum. "If offshore technology doesn't come out of Germany, it will come to Germany," he warns.

In the firing line

As the wind power generation base in Germany continues to grow, albeit more slowly, the cost to the nation of buying increasing volumes of wind power at a fixed rate remains firmly in the line of fire of the major electricity utilities. They, in turn, are under attack for raising electricity and network usages charges and raising price benchmarks before an energy regulator is installed, probably in July 2005. According to the utility sector, wind power bears a good deal of the responsibility for the price increases, a claim hotly disputed by the wind industry.

Backing the utility view, economics minister Clement complains that the gross cost of wind energy production in Germany will reach an annual EUR 5.4 billion in 2015 compared with today's EUR 1.4 billion. From the Greens party, energy spokesperson Michaele Hustedt points out that only the extra costs compared with alternative fossil fuel generation should be attributed to wind. "Even the minister admits that a kilowatt hour of fossil fuel generated power will become increasingly more expensive as fuel prices rise and new investment in generation is necessary. As renewables pay rates decrease [by law] and fossil fuels become more expensive, wind energy will not be a real additional cost to consumers in 2015," she claims. "The minister has consciously presented a miscalculation in order to repeat once more his criticism of the renewable energy law."

Clement's comments were made in connection with a study on network integration of wind energy, with input from several institutes and other sources co-ordinated by German energy agency Dena in Hanover. The study's overview is complete, but the document has yet to be published due to conflicting interpretation of the results by the renewables and conventional energy lobbies.

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