Much of the increase is accounted for by China, Germany, the US, Brazil and India, although there have been a number of new installations in the rest of the world.
Global wind capacity is expected to grow further, albeit at a slower pace. The GWEC has prepared three different scenarios, the new policies scenario (which is conservative), the moderate scenario and the advanced scenario (the most optimistic). Under all scenarios, wind is set to comprise a significant part of the energy mix, comprising around 6-9% of global electricity demand by the year 2020 and at least 8% to a high of 19% by the year 2030.
The increasing role of wind in the energy mix in the future is due to pressure on the power sector to reduce carbon emissions. Among the options in making huge reductions in emissions are energy efficiency, switching fuel in thermal plants from coal to gas and adopting renewables. Among the options available, wind is the “most cost-effective and timely option on the supply side” up until 2020 according to GWEC Secretary General Steve Sawyer. That is why the GWEC expects another good year in 2015.
One of the growing opportunities is in offshore wind development that saw an increase of 1.7 GW last year. Offshore wind is expected to grow significantly with a projected increase of 11-15 GW this year and 58-65 GW in the year 2020. But that depends a lot on what will happen in the next few years. “Costs need to come down,” says Sawyer, not in the turbine costs but in “everything else”, such as the costs of foundations, electrical connections, maintenance, and the like.
The big news for wind power development is on the financing side, with the emergence of YieldCos. They reduce the risk for investors in wind power projects and assure them of a steady stream of income through regular dividend payouts. Since the risk is lower, the cost of capital for developers is reduced, which has a humungous impact for capital intensive projects like wind power. Because of YieldCos, wind farm developers are offering “low power prices in competitive tender rounds” according to Martin Billhardt of PNE Wind Group. In any case, it helps that YieldCos open up ownership of wind farms to the general public rather than private equity and pension funds that dominated the early days of wind power development finance. Hopefully, they will be able to help the industry avoid the funding gap predicted for 2020, but the industry must make quick moves now. Otherwise, there is still a risk of a funding gap according to Billhardt.
In addition, wind turbines are becoming cheaper and more reliable. Not that wind turbines are unreliable as shown by the continued operation of wind turbines in Germany that have been in service for over two decades now. As is the case with other power sources, some of the existing wind farms are now being repowered.
These developments are pushing down the cost of wind generated electricity, even in countries where there are no feed in tariffs and other incentives. In fact, wind power costs are generally lower in developing countries at 4 to 7 US cents per kilowatt hour. This is much cheaper than newly built coal, newly built gas, and pretty much everything else said Sawyer. There are even new wind farms coming online in Australia, despite their government’s effort to shut down wind power. In fact, the question is not if wind can compete without subsidies but rather how long coal, gas and nuclear can continue to compete without their subsidies, Sawyer added.
This is crucial given the prospects in the upcoming climate change talks in Paris. Based on the draft texts, there is not much for wind and other renewable energy sources. Hence, GWEC is doing its advocacy by country, locally. In any case, they are still hopeful about the Paris talks, says Sawyer.
If bold steps are taken there, wind power can only soar higher. Despite Paris, things are still looking bright for wind power.