Project finance is virtually frozen, it says, leaving only large players with strong balance sheets able to build new capacity. This includes major utilities with pipelines of projects, such as Portugal's EDP, Spain's Iberdrola and Endesa, and Germany's E.ON and RWE, which have secured financing for their short-term wind power developments, says EER's Eduard Sala de Vedruna. Smaller players have been forced to look for partners or to put their growth plans on stand-by, he adds.
"But with broadening government support and the EU's 2020 renewable energy targets, the long-term fundamentals of Europe's wind energy sector remain strong," says EER. The industry is expected to bounce back in 2010, with installation returning to the 2008 level as liquidity in credit markets improves. After that, EER expects steady growth in new European installations, with annual capacity additions rising from 10.6 GW in 2011 to 16.1 GW in 2020.
An expanding offshore market will help power this growth, with 0.4 GW expected offshore in 2009, rising to 1.1 GW in 2010. Annual offshore installations will gradually rise to 4.4 GW by 2020, making up more than a quarter of new capacity each year (chart). "European offshore activity is expected to account for as much as 27% of installed capacity in 2020 with activity expected in 12 European countries," says EER.
The company believes Spain will retain its crown as Europe's largest onshore market, installing 1.8 GW annually or 21.7 GW in the period 2009-2020. But in 2010, France will become the leading onshore growth market, thanks to improvements in the permitting process, larger projects, higher financial incentives for wind generation and the presence of the industry's leading players. Annual additions in France will rise from 1 GW last year to an average 1.5 GW, with a total of 17.8 GW installed between 2009 and 2020. The UK will join the group of countries installing over 1 GW annually in 2015, while Germany will remain one of the top five European markets through 2015. Onshore growth in Germany will decline though, EER says, as a result of market saturation, slow repowering and large players dedicating resources to offshore development.
In Eastern Europe, Poland, Romania, Turkey and Bulgaria are expected to add a combined annual average of 1.1 GW through 2009 to 2020, according to EER's forecast, although this year their combined total is not expected to be more than 560 MW, just down on the 575 MW installed in 2008. While funds for projects in eastern Europe have dried up, 2009 new capacity figures will be supported by some significant projects already in construction phase, says EER.