The markets: Renewable energy (2017)

Wind energy continues to dominate in this segment. Although previously fastest-growing Europe shows signs of slowing wind farm growth, the US might finally move offshore, China, India and Brazil are hot, and the Rest of the World wants in.

Wind energy continues to dominate in this segment and remains, far and away, the world’s largest market for glass-fiber-reinforced composites. It’s also competing with other heavy users, such as the aerospace industry, for carbon fiber as blades get longer and blade builders look for ways to lightweight the massive structures without performance sacrifices.

Worldwide, wind power generating capacity reached 456.486 GW by the end of June, 2016, say the figures compiled by the World Wind Energy Assn. (Bonn, Germany) in its WWEA Half-Year Report: Worldwide Wind Capacity. Reaches 456 GW. As we noted in 2015, that’s a lot of composite turbine blades. In the first six months of 2016, 21.7 GW were added, about the same as in the same period in 2015, but substantially higher than in the first halves of 2014 and 2013, when 17.6 GW and 13.9 GW, respectively, were added. Turbines active now can meet 4.7% of the world’s total electrical demand. The global wind capacity grew by 5% within six months (after 5.8% in the same period in 2015 and 5.6% in 2014).

In the second half of 2016, an additional capacity of more than 40 GW was expected worldwide, which would bring the annual installation total for 2016 to 65 GW, about 1.5 GW greater than in 2015. So the total installed wind capacity could reach 500 GW by year’s end. Stefan Gsänger, WWEA secretary general, commented, “Wind power shows robust growth also in the year 2016, and the good news is especially that we can see strong markets now also in Latin America and in Africa.”

In fact, as 2016 dawned, turbine placement in, and delivery of composite rotor blades to, places often glibly referred to by prognosticators as the Rest of the World, were proceeding apace. Although the numbers might be small in comparison with more established European and North American locales, South Africa, Kenya, Kazakhstan, Turkey, Pakistan, India, Uruguay, El Salvador and a strong and up-and-coming Brazil were all making their marks (see SB’s expanded online version of this Overview).

WindEurope, (formerly the European Wind Energy Assn., Brussels, Belgium), revealed early in 2015 that offshore wind installations in 2015 had accounted for 44% of all new electrical power sources in Europe. Further, in the first half year of 2016, Europe’s offshore wind industry had attracted a record €14 billion in new investments. New, grid-connected installations through June 2016 totaled 511 MW, 78% down from the same period in 2015, but WindEurope predicted that the volume would pick up in 2017 and increase through 2020.

Giles Dickson, WindEurope’s CEO, said, “The record investment numbers show a clear industry commitment to offshore wind. We expect installations will pick up significantly in 2017 but there are a lot of challenges out there still on offshore wind. Not least the uncertainty over future volumes and regulation in many key markets for the period after 2020. We’re a long way from being able to say job done on offshore wind.”

Total installed offshore wind capacity in Europe now stands at 11.538 GW across 82 wind farms in 11 countries. But only Germany (258 MW) and the Netherlands (253 MW) added new capacity in the first six months of 2016. The average size of the 114 new turbines installed was 4.8 MW, up from 4.2 MW a year ago.

In June, energy ministers from nine European countries signed a Memorandum of Understanding (MoU) and Work Program to enhance cooperation on offshore wind. In parallel 11 energy companies signed a declaration to reduce offshore wind costs to below €80/MWh by 2025. This assumes an annual build-out of 4-7 GW of offshore wind from 2021 onwards.

“The costs of offshore wind are falling, but we need healthy volumes in the market to sustain this,” Dickson pointed out. “The current pipeline of projects is not enough, and the commitments member states have so far made for beyond 2020 fall well short of what’s needed. This risks undermining Europe’s competitive position in offshore wind. We’re number one today, with over 90% of the world’s capacity, but the US and China are now moving to rapidly expand their offshore wind investments.”

China is certainly doing just that. According to Bloomberg New Energy Finance, China’s offshore plans are ambitious: 5GW by 2015 and 30GW by 2020. But reality has been somewhat slower, due to developers’ lack of experience in the sector and domestic turbine manufacturers’ lack of proven offshore products. In 2015, about 335 MW of offshore capacity brought China’s cumulative capacity to 911 MW. China has been working, therefore, with foreign developers more acquainted with offshore development, although their participation had been limited to a 49% basis, to protect Chinese interests.

Meanwhile, its onshore activity was unprecedented. The International Energy Agency reported that wind turbines at one point in 2015 were being produced at the rate of two per hour in a massive effort that resulted in the production of 30 GW of new capacity that year. The result was overcapacity that resulted in a slackening of the pace in the first half of 2016 to a bit over a single turbine per hour as China works to phase out its dirty, coal-fired electrical plants.

            Finally, the US is finally waking to the offshore wind market. After years of clearing federal, state and local government hurdles — US proponents of offshore wind energy celebrated as crews from Deepwater Wind LLC (Providence, RI, US) successfully set the first foundation for a commercial offshore US wind turbine in July 2015 off Block Island, near New Shoreham, RI, US. The five turbine wind farm will be small, but its 6 MW turbines will generate 15% greater power than all predecessors and supply 1% of the state’s total electric power. The 30-MW Block Island project will be followed by a more ambitious 1 GW Deepwater Wind US wind proponents hope this finally hails the start, finally, of offshore development that the National Renewable Energy Laboratory (NREL) estimates could extend to 4,200 GW of developable offshore wind potential.

Meanwhile, the US wind industry installed 895 megawatts (MW) during the third quarter of 2016 alone, bringing year-to-date installations to 1.725 GW, according the AWEA’s U.S. Wind Industry Third Quarter 2016 Market Report. That brought the US total installed wind energy generation capacity to 75.716 GW. Developers reported more than 20 GW of wind capacity under construction or in advanced development, with more than 3,700 MW of new announcements made during the third quarter. There are now 13,563 MW under construction and 6,717 MW in advanced development.

            In a post-election comment, American Wind Energy Assn. (Washington, DC, US) CEO Tom Kiernan expressed confidence that the newly elected US president and his Republican administration would support continued development of both onshore and offshore wind energy resources in the US, noting that more than 80% of all US wind farms are located in Republican-governed congressional districts. He added that the business community, also an often-Republican-leaning community, is increasingly bullish on Wind: “Utilities and major corporations are flocking to buy more wind, finding it to be the biggest, fastest, cheapest way to keep the air clean while keeping electric rates low.” 

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