Rate of expansion outstrips predictions, new market study

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Installation of wind plant in Europe is predicted to reach 8000 MW by the close of the first year of the new century, according to a new market report published by Danish firm BTM Consult. This volume of installation would double the goal set by the European Wind Energy Association in 1990 for the year 2000 -- a goal which at the time was criticised by some for being too ambitious. It would also equal the goal for wind set in 1992 by the European Union's Altener programme for 2005.

Furthermore, BTM predicts that nearly 9000 MW of new capacity will be installed worldwide between 1997 and 2001. The prognosis assumes yearly installation rates for the top seven wind markets of between 100 and 300 MW, with Germany (300 MW), India (200 MW) and Spain (200 MW) leading the field, with Denmark and the US expected to contribute 150 MW a year and China and the UK 100 MW apiece. Capacity additions of 50 MW or under are predicted for the Netherlands, Greece, Canada and Sweden.

In making these assumptions BTM Consult has used existing rates of market expansion in each country, adjusted for political uncertainty. India's prognosis is based on the assumption that its market will recover from the current decline, as expected, and return to 1995 levels. In the US, the market is greatly influenced by whether or not a few, but large projects will go ahead. "The USA has an enormous potential for wind power development if the right conditions are established. The market could therefore be much bigger than estimated if this happens," states the report, "International Wind Energy Development -- World Market Update 1996."

In Europe, BTM acknowledges that uncertainty in Germany over future payments for wind kilowatt hours is likely to slow the pace of the world's largest market in recent years. The predicted annual growth rate of 300 MW is lower than the 420 MW installed in 1996, which in turn was lower than the 505 MW installed in 1995. If payments for wind are reduced, making low wind speed sites uneconomic for development, the installation rate in Germany may slow even further, states BTM. "On the other hand the market could also be larger than expected in the prognosis if the current debate [on wind prices] is ended soon in favour of wind."

Caution is also expressed for the Danish market. This year should see a repeat of the 200 MW installed in 1996, but after 1998 BTM describes the market as "uncertain" and likely to be developed by utilities. It points out that the utilities have been mandated by government to build 200 MW between 1996 and 2000, but little of this has been achieved and the sector has a track record of dragging its feet on wind development.

BTM is bullish on Spain, however. "The conditions are looking very promising and could very likely result in a much bigger market than estimated in the prognosis." Sentiments are similar with regard to the UK market, where the huge wind resource, combined with the falling price of wind energy and more sensitivity from developers on the visual aspects of siting wind turbines could boost installations. "In fact, the UK should be able to install two to three times the capacity estimated in our prognosis," says BTM.

The total volume of wind power installed in 1996 was 1258 MW, according to BTM Consult, a little less than the 1293 MW installed in 1995, the best wind year ever. BTM's Birger Madsen estimates that the Danish wind industry had a 60% share of this market, after steadily losing out to foreign manufacturers between 1989 and 1994. This trend was reversed in 1995 when the Danish share of the market rose from 38% to 45%.

As well as market predictions, BTM's World Market Update assesses the supply side of the market, ranking turbine suppliers in a top ten list compared over the past three years.

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