Market Status: Germany - Bullish outlook after poor year for wind

GERMANY: Last year was a poor one for wind in Germany. New turbine installations were healthy at 1.9GW over the year - 15% higher than the 1.7GW added in 2008. But wind conditions were weaker.

Generation amounted to only 37.5TWh last year, down 8% on the 40.6TWh of electricity produced in 2008. In a normal wind year, Germany's fleet of 21,164 turbines, which totalled around 26GW by the end of 2009, has the potential to generate 47TWh a year, says Dewi, the German wind energy institute.



Even with the below-par results for wind, the total output from renewable sources reached 117TWh last year, topping the coal generation figure of 109TWh for the same period. Expanding wind and other renewables generation is nudging out coal-fired generation - making the renewables sector Germany's third-largest electricity producer after lignite and nuclear.

Wind installations in 2009 were boosted by a one-off increase in the basic feed-in tariff for wind-generated power, to EUR0.092/kWh, from EUR0.0803/kWh in 2008. From this year, the tariff falls by 1% a year, making it EUR0.091/kWh for 2010. A bonus of EUR0.005/kWh is added from this year for turbines providing grid support services. The same bonus amount is payable for output from new turbines in repowering projects where lower-capacity turbines are replaced with a smaller number of bigger machines.

Repowering played only a minor role in 2009. Some 76 turbines of a total 37MW were decommissioned and replaced by 55 turbines totalling 136MW.

The outlook for installations in 2010 is a bullish 2.3GW, says Germany's wind energy association, Bundesverband Windenergie (BWE). Of this, about 300MW is likely to be offshore. New areas earmarked by planning authorities for wind energy use and more repowering will help to speed developments, BWE says.

Developers are also likely to be spurred to work faster by plans announced by Germany's new coalition government, following elections last September, for an amended renewable energy act taking effect at the beginning of 2012. If developers get their projects online within the next two years, they will get support from the existing framework. What happens after that is uncertain, especially in view of the government's plans to ditch the nuclear phase-out law and extend the lifetime of nuclear reactors.

The current renewable energy act of 2008 had specified a report on progress achieved under the law by the end of 2011, with subsequent reports every four years. The new government plans a progress report every three years.

To achieve climate targets, annual wind installations need to reach 3.5GW a year, the BWE points out, adding that once the offshore wind sector gets into gear, this rate of growth will look more realistic.

Biggest gets bigger

German turbine builder Enercon strengthened its already dominant position in the German wind market in 2009. It accounted for around 60%, or roughly 1.2GW, of the approximate 1.9GW that went in the ground, compared with 52% of the new installations in 2008.



Second in the pecking order, Danish turbine builder Vestas lost considerable ground, installing 19.5% - 374MW - of the 2009 total. In 2008, it had accounted for 32% of the market, installing 526MW of the total.

Repower Systems improved its performance in Germany last year, adding 169MW compared with 93MW in 2008. Fuhrlander installed 94MW compared with 80MW in 2008, while Nordex remained on a par with 2008 at 36MW. Despite its turbine manufacturing works in Salzbergen, GE Energy made minimal impact on the German market with just 23MW, albeit double its installations in 2008. Multibrid, owned by French nuclear giant Areva, appeared on the list for the first time, thanks to installation of five offshore turbines in the North Sea in 2009.

The average size of turbine installed is increasing year by year to 2MW in 2009, compared with 1.7MW in 2005 and just over 1MW in 2000.

Germany's inland state of Brandenburg took the lead in capacity installed last year, with an additional 403MW going into the ground. It was followed by Lower Saxony with 391MW. The two states of Saxony-Anhalt and Mecklenburg-Vorpommern now have sufficient wind capacity to meet the equivalent of more than 40% of their electricity needs.

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