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'The growing wind power industry is winning its battles'

OPINION | Wind capacity is expanding fast, but new markets, falling prices and technological innovation offer the real measure of the industry's success, writes Steve Sawyer

GWEC’s latest market data shows another 52.6GW of wind was installed in 2017, bringing the global total to almost 540GW.

Beyond the statistics, however, is the fact that wind power is in a rapid transition to becoming a fully commercialised, unsubsidised technology that is successfully competing against heavily subsidised fossil and nuclear incumbents.

Cratering prices for both onshore and offshore wind continue to surprise. Markets in such diverse locations as Morocco, India, Mexico, and parts of the US and Canada range in the area of $0.03/kwh, with a recent Mexican tender coming in with prices below $0.02. Meanwhile, offshore wind had its first ‘subsidy-free’ tender in Germany this year, with tenders for new offshore capacity receiving no more than the wholesale price of electricity.

These prices have put a big squeeze on the profits up and down the whole supply chain; but the industry is fulfilling its promise to provide the largest quantity of carbon-free electricity at the lowest possible price. Smaller profit margins are a small price to pay for leading the energy revolution.

"Smaller profit margins are a small price to pay for leading the energy revolution."

The technology continues to improve, opening up many areas for onshore wind development which were previously not commercial. More sophisticated power electronics, better planning and overall management have contributed to increased reliability as well as price reductions.

Offshore, the size of the machines continues to boggle the mind, and we will have 1X MW machines in the not too distant future. It might not be too far into the next decade before we’re talking about 2X machines for massive floating offshore installations in the deeper waters of the outer continental shelf.

While China has driven global growth for the past decade, new markets in Brazil, South Africa, Mexico, Morocco and Argentina will be putting up big numbers in the years to come. India had a record year in 2017, and while the 2018 market will reflect the gap between the old systems and the new auctions, the government has very ambitious targets for wind and other renewables going forward.

A number of South and Southeast Asian markets are up and coming: Thailand, Pakistan, Vietnam, The Philippines, to name a few. The new South Korean government has very ambitious plans for offshore wind. The last ‘sleeping giants’, Saudi Arabia and Russia, are moving, and could be adding gigawatts to the annual market in just a few years.

Europe installs record 15.7GW of onshore and offshore wind in 2017

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And then there’s Europe. It enjoyed a record year in 2017, for both onshore and offshore, with seven markets setting new records: Germany, the UK, France, Finland, Belgium, Ireland and Croatia. Germany and the UK will both face dips in 2018 due to policy shifts – let’s hope Brussels embraces a post-2020 target of at least 35% renewable energy in final consumption, and then we can go about beating that.

The transition to fully commercial market-based operation has left policy gaps in some countries, and the global 2017 numbers reflect that, as will installations in 2018. However, as Michael Liebreich puts it, we’re well on our way past the first tipping point where wind is cheaper than incumbent for new-build, and we’re on the edge of the second, where new-build wind (and soon solar) will be cheaper than operating existing incumbent generation.

We’re winning the war, although not yet fast enough to save the climate. That’s the next and greatest challenge: we now have the technology. Let’s use it!

Steve Sawyer is secretary general of the Global Wind Energy Council (GWEC)

  • GWEC released its annual market statistics today from Brussels. You can see graphic representations of the top 10 markets, and global offshore statistics here, showing the highlights of the 2017 market.

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