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GLOBAL STATUS OF WIND POWER IN 2015

Analysis
Typography

2015 was an unprecedented year for the wind industry as annual installations crossed the 60 GW mark for the first time in history, and more than 63 GW of new wind power capacity was brought on line. The last record was set in 2014 when over 51.7 GW of new capacity was installed globally.

 

In 2015 total investments in the clean energy sector reached a record USD 329 billion (EUR 296.6 bn). 2015 figures were up 4% from 2014’s investment of USD 316 billion (EUR 238.1 bn) and beating the previous record set in 2011 by 3%. 

The new global total for wind power at the end of 2015 was 432.9 GW, representing cumulative market growth of more than 17%. This growth was powered by an astonishing new installations figure of 30,753 MW in China; the global wind power industry installed 63,467 MW in 2015, representing annual market growth of 22%.

In early 2015, expectations for growth in the wind power market were not excessive, as continued economic slowdown in Europe and some emerging markets, and the political uncertainty in the US, made it complex to make projections for 2015, which we called at 53.5 GW. Apparently, once again we were not factoring in the ability of China to surpass all projections with exceptional wind power development numbers. 

China, the largest overall market for wind power since 2009, retained the top spot in 2015. True to form, installations in Asia again led global markets, with Europe in the second spot, and North America closing the gap with Europe, in third place.

A result of this was that in 2015, as in 2014 and in 2013, the majority of wind installations globally were outside the OECD once again. This has been the case since 2010, with the exception of 2012. This trend will continue for the foreseeable future. 

By the end of last year the number of countries with more than 1,000 MW installed capacity was 26: including 17 in Europe; 4 in Asia-Pacific (China, India, Japan & Australia); 3 in North America (Canada, Mexico, US), 1 in Latin America (Brazil) and 1 in Africa (South Africa).

By the end of last year eight countries had more than 10,000 MW of installed capacity including China (145,362 MW), the US (74,471 MW), Germany (44,947 MW), India (25,088 MW), Spain (23,025 MW), UK (13,603 MW), Canada (11,205 MW), and France (10,358 MW).

China crossed the 100,000 MW mark in 2014, adding another chapter to its already exceptional history of renewable energy development since 2005. This year it made history again and strengthened its position on the leader board. 

Europe and North America both had strong years in 2015, led by Germany and the US respectively. Guatemala, Jordan and Serbia each added their first large commercial wind farms, and South Africa became the first African market to pass the 1 GW mark.

ASIA: REMARKABLE YEAR FOR CHINA 

For the seventh year in a row, Asia was the world’s largest regional market for new wind power development, with capacity additions totalling nearly 33.9 GW.

In terms of annual installations China maintained its leadership position. China added 30.8 GW of new capacity in 2015, once again the highest annual number for any country ever. This is almost twice the 2013 figure, when China installed 16 GW of new capacity.

In 2015, wind power generation reached 186.3 TWh, accounting for 3.3% of total electricity generation. This follows a pattern of steady increase in wind based electricity generation despite heavy curtailment. In 2012, wind-generated electricity in China was just over a 100 TWh, accounting for 2% of the country's total electricity output. Wind provided almost 135 TWh of electricity in 2013, contributing 2.6% of the country's total electricity generation. Total wind power generation reached over 153 TWh in 2014, 2.78% of total electricity generation.

The Chinese wind market almost doubled its capacity from 75 GW in 2012 to reach 145 GW by the end of 2015, reinforcing China’s lead in terms of cumulative installed wind power capacity. 

All observers continue to be surprised by the astonishing track record for growth of the wind sector in China over the last decade. The current pace of growth in the Chinese wind power market may see a slowdown in 2017. However, we have often been positively surprised when time and again China’s installation figures surpass expectations. 

Curtailment on wind farms in China worsened in 2015, as grid companies kept almost 34 billion kWh from being delivered to the grid. According to the National Energy Administration (NEA), the country wasted 15% of wind power generated in 2015.

On-going curtailment of electricity generation is a challenge for wind power projects. However, the NEA and State Grid are working to solve the transmission bottlenecks and other grid issues, and the situation is expected to improve.

India continues to be the second largest wind market in Asia, and in 2015 passed Spain to attain 4th place in terms of cumulative installations. The Indian wind sector has struggled over the years to repeat the strong market performance of 2011 when over 3 GW was installed. 2015 seems to signal the onset of a recovery phase given the government’s desire to address some of the structural bottlenecks in the market.

India’s new wind energy installations totaled 2,623 MW in 2015, for a total of 25,088 MW. This kept the Indian wind power market for 2015 at #5 globally. The total grid connected renewable energy installations in the country reached approximately 39,411 MW. 

The Indian government has committed to a target of 175 GW of renewables by 2022, including 100 GW of solar capacity and 60 GW of cumulative wind power capacity. The government has also indicated its support for rapidly growing the power sector, renewables being a core part of this strategy. 

While the rest of Asia did not make much progress in 2015, there are some favourable signs on the horizon. The Japanese market installed almost 245 MW in 2015 to reach a cumulative capacity of 3,038 MW. This represents around 0.5% of the total power supply, and Japan is slowly moving towards a transformation of its energy system to allow for a more diverse energy mix including more wind power and other renewables. However, removing existing barriers will still take time. Offshore wind development, in particular on floating platforms, is a promising prospect for the future.

Although South Korea still has “green growth” as one of its national development priorities, wind power is still a relatively small energy generation technology, with 225 MW of new installations in 2015, bringing total installed capacity to just over 835 MW. 

Taiwan added 14 MW of new capacity, bringing its total installed capacity to 647 MW. As for the rest of Asia, we expect new projects to come online in Pakistan, Thailand and Vietnam in 2016.

NORTH AMERICA: RESURGENCE IN THE US 

2015 ranks as the third highest year for wind installations for the US, which is the single largest market in terms of total installed capacity after China. The US added 4,000 new turbines for a total market of 8,598 MW last year, a 77% increase over 2014, and total installed capacity reached 74,471 MW. 

Wind produced over 190 TWh in the US last year, which was 4.7% of the total electricity generated in the US. 

Wind energy accounted for almost 31% of all new generating capacity installed over the last 5 years. Wind energy provided more than 25% of the electricity in Iowa and South Dakota, and 12% or more of the generation in a total of nine states. 

In terms of annual capacity additions, Texas led the 2015 market with 3,615 MW, followed by Oklahoma (1,402 MW), Kansas (799 MW), Iowa (524 MW) and Colorado (399 MW). 

At year-end, wind developers reported more than 9.4GW of construction activity across 72 projects in 22 states (plus Guam). This included over 1.8 GW of new construction announcements made towards the end of 2015. 

The five year extension and phase out of the PTC provides the greatest degree of long term policy stability the US wind industry has ever seen. This, combined with a broader range of customers, and an on-going “wind rush” driven by technological improvements is setting the stage for more years like 2015 in the US.

In Canada 1,506 MW of new wind capacity came online, making it the sixth largest market in 2015. Canada finished the year with over 11.2 GW of total installed capacity making it the seventh largest market globally, in cumulative terms. Canada’s new wind energy projects in 2015 represent over CAD 3 billion in investment. At the end of 2015, wind power was supplying approximately 5% of Canada’s electricity demand. The Canadian wind industry has demonstrated a five-year annual average growth rate of 23% per annum. 

Canada added new wind capacity through the commissioning of 36 projects, 23 of which involved Aboriginal Peoples, municipal or local ownership. For comparison, in 2014 of the 37 new wind energy projects installed, 15 projects also included significant ownership stakes from Aboriginal Peoples, municipal or local ownership. This is a sign that local communities are taking a keen interest in wind energy. 

Most of the growth was centered in the provinces of Ontario (871 MW), Quebec (397 MW), and Nova Scotia (186 MW). The Canadian industry expects to see another record year in 2016. 

Mexico installed an impressive 713.6 MW of new capacity to reach a total of 3,073 MW by the end of 2015. Mexico's Energy Reform legislation was enacted in December 2013. 

Mexico has set an ambitious annual target of 2,000 MW per year until 2023. The country is facing one of its biggest energy challenges in 20 years, with the current energy reform opening up the electricity market like never before. The market reforms for the electricity sector are expected to have a significant impact on the future of wind power in the country. 2016 will be another strong year for the Mexican wind power market.

EUROPE: UNPARALLELED YEAR FOR GERMANY 

Across Europe 13,805 MW of wind power was installed in 2015. The European Union member states (EU) accounted for 12,800 MW of the total.

There are now 141.6 GW installed in the EU with a total cumulative capacity of 147.8 GW for all of Europe. Wind power installed more than any other form of power generation in 2015, accounting for 44.2% of all power capacity installations. Wind energy overtook hydropower as the third largest source of power generation in the EU with a 15.6% share of total power capacity by the end of 2015. 

Renewables accounted for 77% of new power plant installations in 2015 (22.3 GW of a total of 29 GW) of which wind accounted for 44%.

Overall EU installation levels once again mask significant volatility across Europe. Germany alone accounted for almost 50% of total EU wind energy installations with 6,013 MW. Poland at 1,266 MW and France at 1,073 MW were the only two other markets to install over 1 GW during the year. Together these 3 countries account for over two thirds of all installations. In a number of previously healthy markets such as Sweden and the UK, installations slowed down significantly. 

At the end of 2015, the EU had 142 GW of installed wind power capacity of which 131 GW was onshore and 11 GW offshore. However, 47% of all new EU installations in 2015 took place in Germany and 73% occurred in the top four markets, a similar trend to the one seen in 2014. This is unlike previous years when installations were less concentrated and spread across many more healthy European markets. 

EUR 26.4 billion was invested in wind energy in Europe in 2015, 40% higher than the total investment in 2014. While wind power led 2015 installations, solar PV accounted for 29%; coal 16% and gas 6.4%. 

Germany remains the EU country with the largest installed capacity (44.9 GW), followed by Spain (23 GW), the UK (13.6 GW), France (10 GW) and Italy (9 GW). Sweden, Denmark, Poland and Portugal each have more than 5 GW installed.

Annual installations of wind power in the EU have increased over the last 14 years from 3.2 GW in 2000 to 12.8 GW in 2015 at a compound annual growth rate (CAGR) of 9%. Wind power accounts for one third of all new power installations since 2000 in the EU. 

In 2015, the annual onshore market in the EU decreased by 7.8%, but offshore installations more than doubled compared to 2014. Overall, EU wind energy annual installations increased by 6.3% compared to 2014. 

Offshore wind accounted for almost a quarter of total EU wind power installations in 2015, and investment in offshore wind in Europe doubled to EUR 13.3 billion. It was a record year for financing and grid connected installations. Germany (2,282 MW), the United Kingdom (572 MW) and the Netherlands (180 MW) were the three countries to grid-connect new offshore wind turbines in 2015, with 14 projects reaching completion. 

The UK still has the largest offshore wind capacity in Europe at 5,067 MW, accounting for 46% of total European installations. Germany had a stellar year and rose to the second spot in 2015. Germany saw total installation rise to 3,295 MW (29.9%). With 1,271 MW (11.5%), Denmark is third, followed by Belgium at 712 MW (6.5%), the Netherlands at 427 MW (3.9%), and Sweden with 202 MW (1.8%). Other small markets include Finland with 26 MW, Ireland with 25 MW, Spain with 5 MW; Norway with 2 MW and Portugal with 2 MW. 

Weakened legislative frameworks, on-going economic crises and austerity measures implemented across Europe continue to hinder growth of the wind power industry. The year ahead is likely to be difficult but the broader investment shift away from fossil fuels could boost the European renewables sector. 

Beyond the EU, Turkey is the largest European market, with annual installations of 956 MW in 2015. The Turkish market reached a cumulative installed capacity of 4,694 MW last year. Looking ahead, the future of Turkey’s wind sector looks promising.

LATIN AMERICA AND THE CARIBBEAN: BRAZIL CONTINUES TO LEAD 

Latin America and the Caribbean had a good year. The region saw 3,652 MW of new capacity come online, bringing total installed capacity to 12.2 GW. Latin America has begun developing a substantial wind power industry to complement its rich hydro and biomass (and potentially solar) resources. 

Post the Paris Agreement at COP21, the demand for clean energy, bolstered by concerns for energy security and diversity of supply, will promote the growth of wind power in Latin America and the Caribbean. 

For the fourth year in a row the Latin American market installed over 1GW of new capacity. In 2012, six markets in the region installed 1,225 MW of new wind capacity for a total installed capacity of just over 3.5 GW. In 2013, just five markets including Argentina, Brazil, Chile, Dominican Republic and Uruguay accounted for 1,219 MW of new wind power capacity for a total installed capacity of 4.7 GW. In 2014, ten markets added new capacity. These included Argentina, Brazil, Chile, Costa Rica, Ecuador, Peru, Honduras, Nicaragua, Venezuela and Uruguay. In 2015, eight markets added new capacity. These included Argentina, Brazil, Chile, Costa Rica, Guatemala, Honduras, Panama and Uruguay. 

Brazil led Latin America with installations of 2,754 MW; although the projects were fully commissioned not all of them could be given a grid connection before the end of the year. Brazil continues to be the most promising onshore market for wind energy in the region out to 2020. 

Uruguay has a goal to generate as much as 38% of its power from wind by the end of 2017 and added almost 316 MW, bringing its total installed capacity to over 845 MW. With its neighbours Argentina and Brazil, Uruguay has traded electricity for years. In 2013, for the first time in more than a decade, Uruguay didn’t import electricity from its neighbors, selling USD 21 million worth of electricity to Argentina. The National Utility - UTE and Brazil’s Eletrobras are testing a 500 MW transmission line, which could enable Uruguay to add more wind power. 

Chile added 169 MW of new capacity to reach a total installed capacity of almost 1 GW. Panama added record capacity of 235 MW to reach 270 MW, and Costa Rica added 70 MW of new capacity to reach a total of 268 MW. Honduras saw its total installed capacity reach 176 MW, when it added 50 MW of new capacity in 2015. Guatemala for the first time added wind power to its energy mix in 2015, with a 50 MW project.

Argentina added 8 MW of new capacity to bring its total installed capacity up to 279 MW last year. The Caribbean reached a total installed capacity of 250 MW across various island states by the end of 2015.

PACIFIC 

The region saw its total installed capacity rise to just over 4.8 GW last year. Australia added 380 MW in 2015, bringing its total installed capacity up to 4,187 MW. 

The previous Australian Prime Minister did not support renewables and was causing significant difficulties for the renewable energy industry in Australia. In a strange move, in the run up to COP21 last year, the Australian parliament approved legislation cutting the Renewable Energy Target from 41 TWh to 33 TWh. However, the target is at least now fixed, and the new Prime Minister is more forward looking. In a positive development, the province of South Australia committed to a new target of zero net emissions by 2050 last year. 

Samoa added 550 kW of new wind power capacity in 2015. This was the first wind project in the Pacific Island nation.

The project site is located on the island of Upolu; Samoa's second largest island. United Arab Emirates-based energy firm Masdar developed the project with funds from the UAE's Pacific Partnership Fund. 

New Zealand and the rest of the Pacific did not add any new wind power capacity in 2014, just like 2013.

AFRICA AND THE MIDDLE EAST 

The Africa and Middle East region saw 953 MW of new capacity additions last year, bringing cumulative capacity for the region up to 3,489 MW. Africa’s wind resource is best around the coasts and in the eastern highlands, but until 2014 it was in North and East Africa that wind power has been developed at scale.

South Africa installed 483 MW of new capacity, for a cumulative capacity of 1,053 MW. This is just the beginning of a promising wind market in the region, which has surpassed 1 GW in just two years. 

Egypt saw a new wind farm come online in 2015. It is one of the largest wind farms in Africa, with 100 turbines with a total capacity of 200 MW. It was inaugurated in Egypt’s Gulf of El-Zayt. This brought Egypt’s total installed capacity up to 810 MW. Egypt wants to source 20% of its energy from renewable sources by 2030. 

Ethiopia had a good year as well, as 153 MW of new capacity came on line last year. This brought total installed capacity in Ethiopia to over 324 MW. 

Last year Jordan added its first large wind farm (117 MW) to its generation mix for a total of 119 MW. The Tafila wind farm is the first utility scale wind power project in the Middle East. The wind farm accounts for almost 6.5% of Jordan’s 1.8 GW renewable energy target for 2020. 

At the end of 2015, over 99% of the region’s total wind installations were spread across ten countries – South Africa (1,053 MW), Morocco (787 MW), Egypt (810 MW), Tunisia (245 MW), Ethiopia (324 MW), Jordan (119 MW), Iran (91 MW), Cape Verde (24 MW), Kenya (19 MW), Israel (6.25 MW) and Algeria (10 MW). New projects are expected to come online in Egypt, Ethiopia, Kenya, Morocco, Tanzania and South Africa in 2016.

2015: EXTRAORDINARY YEAR FUELED BY CHINA’S FIT REDUCTION PLAN 

After a slowdown in 2013, the wind industry set a new record for annual installations in 2014 by installing 51.7GW of new wind power. In 2015, however, the global wind industry smashed all previous records by installing over 63 GW of new capacity.

The record-setting figure represents a 22% increase in the annual market. Total cumulative installations stood at 433 GW at the end of 2015, representing cumulative growth of 17%. This record was led by China’s annual capacity addition, which alone accounted for 48% of total global installations. 

Wind power is a mature technology, with proven reliability and cost competitiveness across an ever-increasing number of markets today. The cost-stability of wind power makes it a very attractive option for utilities, independent power producers and companies who are looking for a hedge against the wildly fluctuating prices of fossil fuels while at the same time reducing their carbon footprint. 

Wind power remains the most competitive way of adding new power generation capacity to the grid in a large number of markets around the world, even when competing against heavily subsidized conventional generation technologies. 

2015 was a big year for the big markets – China, the US, Germany and Brazil, all of which set new records. But there is a lot of activity in new markets around the world and in 2016 the installations are likely to see a broader distribution. 

There is still an acute need around the world for new power generation, which is clean, affordable, indigenous, reliable and quick to install. Wind power is leading the charge in the transition away from fossil fuels; and is blowing away the competition on price, performance and reliability. 

Source: Global Wind Report 2015 (GWEC)