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REMIPEG Report: Part 7 - Wind Energy still going strong with two Asian leaders


Patric Kleineidam; Gildas Courtet; Jan Dörr

The final part in our World-Market Status special report – The global wind market established a new record in 2014 with more than 51 GW of newly installed capacity worldwide, exceeding the previous 2012 record by 15%.

At the end of 2014 an accumulated capacity of approximately 368.5 GW has been installed worldwide. The yearly growth rate of the worldwide accumulated capacity bounced back from 13% in 2013 to 16% in 2014, approaching the average annualized growth rate of 21.5% calculated over the last 7 years. This recovery was mainly a consequence of the massive increase (+44 %) in Asia, driven almost exclusively by China and India, which together represented more than half of the total installed capacity worldwide (respectively 45.6% and 4.5%). Only few other Asian countries have made a significant contribution, of which Pakistan offers ambitious plans. 

In North America, the US market was once again resurrected thanks to an extension of the PTC, which resulted in 4 times more MW installed than last year (but still 3 times less than record year 2012). In South America, Brazil made an important contribution by installing 3 times more MW than last year (2.7 GW), while newcomers such as Chile, Peru and Uruguay installed together more than 1 GW. In Africa, South Africa made an impressive start in large-scale implementation of wind power with more than half a GW installed in 2014. In Oceania, only Australia installed a significant amount, also more than half a GW. 

Meanwhile Europe is very stable with a constant yearly installed capacity within the last 2 years, slightly above 12 GW. The situation is very different, however, in Germany which reached a new all-time high with more than 5 GW installed; counties like France, Sweden and the UK resist with around 1 GW in line with the previous years, and Italy and Spain have seen their market collapse in the last 3 years. Figure 1 summarizes the installed and accumulated capacities in 2014, compared to previous 2013. 

Leading turbine manufacturers

All of last year’s Top 10 WTG manufacturers, who represented more than 70% of the worldwide installed capacity in 2014, have increased their sales in term of MW supplied. While Vestas remained number one with more than 6 GW delivered and connected, its market share is becoming increasingly contested. 

Indeed its two main global competitors have doubled their installations compared to last year: Siemens thanks to its offshore dominance, and General Electric (GE), who is heavily dependent on the USA market with its repeating 2-year boom-and-bust cycles. Very closely, and just above the 4.5 GW mark, follows Goldwind which performs well in China but does not yet benefit from the global growth. 

Enercon is still reliant on its home market (50% of its sales occurred in Germany, representing 2 GW) but expands gradually in neighbouring European countries as well as overseas (Canada). Suzlon had good results in India’s recovering market as well as in Germany and France through its subsidiary Senvion but the two companies will split in an attempt for Suzlon to reduce debt and regain customer’s confidence after several years of technical and financial issues. Finally, Gamesa benefited from emerging markets such Brazil and Mexico.

Incremental gains for onshore wind turbines

As in previous years, larger rotors have been introduced in 2014 to target the low-wind market such as Acciona’s AW132/3000, Nordex’s low-noise N131/3000, Siemens’ SWT-3.3-130 and Goldwind’s GW115/2 MW and GW108/2 MW. Enercon announced a new 4 MW platform starting with the medium-wind 4.2 MW E-126 EP4 designed for 30-year lifetime, while on the high-wind market, its new class 1 version of the E82 (now rating 2.35 MW) will compete with the new Gamesa G106-2.5 MW (based on the recent G114). 

An increasing trend, part of the manufacturers’ focus on their service business, is the upgrade of installed turbines. The typical aim is to increase the output: for instance Vestas’ PowerPlus which, depending on the turbine type, consists of uprating power, extending the cut-out wind speed and implementing vortex generators on the blades, or GE's PowerUp software upgrade available to all of GE’s turbines, which improves control by adjusting the speed, torque and pitch of the turbines to environmental condition. But an upgrade can also mean increasing the operational life of the assets, as offered by Gamesa’s life extension programme initiated in 2010 but which has only recently been certified by DNV GL and allows extending the life of its G47-660 kW turbines by up to 10 years.

Very large onshore projects still exist

In the USA, Power Company of Wyoming has been given consent by state authorities to start construction of the first 1.5 GW phase of the 3 GW Chokecherry & Sierra Madre projects while parallel plans involve a 3 GW HVDC transmission project delivering the electricity towards California and one of the world's biggest energy storage facilities (compressed-air in salt cavern) in Utah. 

Big plans are also under way in Egypt where the government, besides restoring political stability, is tackling the growing electricity needs of the country with plans to install 7.2 GW of wind energy projects by 2020: the El Sewedy Group won the auction to build six 100 MW wind projects on the Red Sea coast, and the New and Renewable Energy Authority (NREA) has been undertaking a first 250 MW tender near Ras Gharib and is launching a 2 GW wind tender for projects of 20 to 50 MW capacity from independent power producers. 

Of noticeable size, and in spite of the threat on the Renewable Energy Target, Australia will host one of the largest onshore wind farms to date with the 600 MW Ceres project, consisting of 197 Senvion’s MM114-3.2 MW connected with an undersea cable to Adelaide (South Australia) planned to be completed in 2018.

Steady turbine development for the offshore market

Although the 3 to 4 MW platforms continue to dominate the offshore market, larger turbines in the 5 to 8 MW range are gaining ground: Dong Energy has selected the MHI-Vestas’ flagship V164-8 MW for Burbo Bank and Walney extensions (resp. 256 and 660 MW), both in the Irish Sea and Siemens’s SWT-6.0-154 for the 210 MW Westermost Rough project. Likewise, Adwen (Areva-Gamesa joint venture)’s 8 MW has been preferred instead of the M5000-135 originally planned, for the St-Brieuc plant in France. 

Further competition might come from Gamesa’s G132-5 MW while several of the Asian contenders have faced difficulties: Japan’s Mitsubishi 7 MW SeaAngel was abandoned to focus on the MHI-Vestas’ V164; Korea’s Samsung 7 MW had prototype issues while the company is downsizing its wind business and closing European offices; and China’s Min Yang two-bladed, down-wind turbine 6.5 MW prototype suffered long delays.

Troubled offshore wind sector

Amid large public opposition and governmental clash, Goldman Sachs acquired 19% the world's largest offshore wind developer, Denmark’s Dong Energy, and even gained veto powers unlike Danish pension firms ATP and PFA who acquired only 7%. Contrary to the fear that the investment bank would undermine its commitment to wind energy, the company followed its strategy of onshore divestment and increased offshore investment, particularly in the UK, among others by taking-over its partners’ share in the 1.2 GW Hornsea 1 Project. However, due to unfavourable seabed conditions, Dong decided not go forward with Rhiannon (Irish Sea Round 3 zone) and Centrica, its partner on this project, decided to pull out of offshore development considering that offshore is unlikely to become competitive. 

Another UK utility SSE announced its decision to scale back on its offshore activities after two of its projects, the 340 MW Galloper and the 1 GW Beatrice projects failed to pass the UK government's preliminary affordability test. Germany’s RWE will also cut renewables spending and Vattenfall is reducing offshore R&D projects. 

Region

Cumulated installed capacity 2014

Installed capacity 2013

Installed capacity 2014

Estimated electricity generation 2014

 

[GW]

[GW]

[GW]

[TWh/y]

North American

78.7

3.2

 7.5

203

South American

7.8

1.2

3.3

17.7

Europe

133

12

 11.9

260.3

Asia

142

18.2

26

206.5

Oceania

4.4

0.5

0.6

11.5

Africa

2.5

0.3

 0.9

6.7

World Total

368.5

35.4

50.2

706

Largest national market

China  |  114.6

China  |  16.1

China  |  23.2

 

Offshore (of above)

8.8

1.6

1.7

 

Figure 1. Summary of the global wind power market in 2014 compared to 2013.

Although the debt crisis and the low wholesale electricity prices cannot be undermined to explain this downward trend, financing was made difficult due to the uncertainty in 2014 surrounding the UK Electricity Market Reform (EMR) which changed the support mechanism from an obligation for the utilities to supply an increasing share of electricity from renewables (ROC) to essentially a feed-in tariff which guarantees the price for the renewable electricity (CfD). Consenting and planning procedures are also blamed for increasing costs and causing unreasonable delays, as for instance for EDF-Eneco’s Navitus Bay project on England's south coast. 

Outside Europe, China is showing slower progress than expected in spite of an offshore feed-in policy finally put in place [36]: the plan is now to have 2 GW (instead of 5) by end of 2015 and 10 GW (instead of 20) by the end of the decade. South Korea's first commercial offshore wind project the 30 MW Tamra project is under construction off Jeju Island while Deepwater Wind's 30 MW Block Island project in the USA is poised to start construction. These encouraging milestones will hopefully lay the ground for serious long-term policy and supply chain investments.

ABOUT THE AUTHOR
 

Dr. Patric Kleineidam is Head of Department Wind Energy at Lahmeyer International GmbH, Bad Vilbel.
 
Gildas Courtet is Project Manager Wind Energy at Lahmeyer International GmbH, Bad Vilbel.
 
Jan Dörr is Intern at Lahmeyer International GmbH, Bad Vilbel.

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