The report, Investment Opportunities in the Wind Energy Sector in Europe, concludes that the Scandinavian powerhouse of Sweden boasts the most conducive environment for the growth of the wind energy market.
Sweden presents an attractive market, due to promising wind resources, the large size of the country and relatively small population. With enough land for the installation of numerous wind farms, whose production would surpass internal demand, Sweden could export electricity and thereby earn more revenue, while assisting countries without similar assets and growing demand for electricity.
Although the support system in Sweden (which is the green certificate and quota obligation system) has been less successful than the feed-in-tariff system, installed wind capacity in the country doubled in 2007 and 2008, resulting in an increase of government support for both onshore and offshore wind energy sectors. At the beginning of 2009, there were 10 onshore projects under construction and 18 with permits.
According to Frost & Sullivan's green energy team, the electricity generated from wind energy is expected to rise from 2.3TWh in 2008 (with a capacity of 1GW) to 24.5-29.1TWh in 2020 (with a capacity of about 9-11GW, of which offshore wind energy capacity will be around 2-3GW). According to the Swedish Wind Energy Association, the technical wind energy potential in Sweden is estimated to be around 540 TWh/year.
Spotlight on Poland
As for Poland, although there are many challenges to surmount within the market, the country has seen the most expansion in the region, due to great wind potential and government support, says Frost & Sullivan.
Manufacturing will be as equally vital for Poland, the country European Wind Energy Association (EWEA) expects to be the sixth biggest market in the coming decade and where the association's members are gathering this month for its annual conference. “Poland is interesting,” says ceo Christian Kjaer. “The key to market take-off in Poland is if we get job creation there.”
Poland follows the quota system with tradable green certificates, but despite the volatility of this system, the Polish market has grown. It increased slowly from 2002-2005, and then picked up speed, doubling every year from 2005-2008.
General participant awareness of Polish potential has induced interest from investors and manufacturers. Banks and private equity investors are becoming more attentive to available possibilities, despite slowed down activity produced by the financial crisis. Likewise, all major European wind turbine manufacturers are active in Poland, as well as component manufacturers from western and northern Europe. In March 2009, LM Glasfiber (now LM Windpower) set up a manufacturing facility in Poland for producing blades for turbines with a total capacity of 750 MW.
Poland must overcome high stakes if it is to attain its 2020 renewable energy targets. The country will need to install 863 MW - 1,002 MW yearly until 2020 to achieve the desired 10,500-12,500 MW. Also, the electricity generation will need to increase to 1TWh to 25.4-30.1TWh.