2011 EUROPEAN WIND ENERGY MARKET REVIEW – OFFSHORE WIND PARKS

Harnessing the sustainable power of wind is a positive development taking into consideration the uncertainty created by the ongoing economic and financial turmoil, the escalating oil prices, the dependence on foreign energy supplies e.t.c.

European Union has set an optimistic target of 20% of its energy supply to come from wind and other renewable sources by 2020. In order to achieve this 20% energy target, more than one-third of the European electrical demand would have to come from renewables, with wind power expected to deliver 14-18%.

Striving to describe the last year performance, during 2011, 10,281 MW of wind power was installed across Europe, of which 9,616 MW was in the European Union, similar to the previous year. Of the 9,616 MW installed in the EU, 8,750 MW was onshore and 866 MW offshore. In 2011, the annual onshore market remained stable compared to the previous year, whilst the offshore market decreased slightly (-1.9%). Investment in EU wind farms in 2011 was €12.6 billion, a similar figure to 2010. The onshore wind power sector attracted €10.2 billion, while the offshore wind power sector accounted for around €2.4 bn (19%). In terms of annual installations, Germany was by far the largest market in 2011, installing almost 2,100 MW of new capacity. The UK came in second with just under 1,300 MW, 752 MW of which (58%) offshore, followed by Spain with 1,050 MW. Italy (950 MW), France (830 MW) and Sweden (763 MW) are followed by Romania (520 MW). Among the emerging markets, after Romania, Poland installed the second most capacity in 2011 (436 MW). Both remain among the 10 biggest EU markets for the second year running. Offshore accounted for 8.9% of total EU wind power installations in 2011.

                      

Wind power accounted for 21.4% of new installations in 2011, the third biggest share after solar PV (46.7%) and gas (21.6%). Solar PV installed 21,000 MW (46.7% of total capacity), followed by gas with 9,718 MW (21.6%), and wind with 9,616 MW (21.4%). No other technologies compare to wind, PV and gas in terms of new installations. Coal installed 2.2 GW (4.8% of total installations), fuel oil 700 MW (1.6%), large hydro 607 MW (1.3%) and CSP 472 MW (1.1%). Nuclear (331 MW), biomass (234 MW), waste (69 MW), geothermal (32 MW) and ocean technologies (4.5 MW), each represented less than 1% of new capacity installations. Overall, 2011 was a record year in the EU, with 45 GW of new electricity generating capacity installed, a 3.9% increase compared to 2010.

During 2011, 6.3 GW of nuclear capacity was decommissioned, and over 1 GW of fuel oil capacity was taken offline. Gas decommissioned 934 MW, coal 840 MW and wind 216 MW. For the second year running, coal installed more capacity (2,147 MW) than it decommissioned (840 MW). This hike in new coal power capacity highlights the urgent need for the EU to move to a 30% greenhouse gas reduction target for 2020, to introduce an Emissions Performance Standard, and to end decades of subsidies for new coal build and its fuel.

In 2000, new renewable power installations totaled 3.5 GW. Renewable capacity installations have been growing almost tenfold over the past 11 years, to reach 32 GW in 2011. The share of renewables in total capacity additions has also grown. In 2000, the 3.5 GW represented 20.7% of new power installations, increasing to 23.3 GW (53.8%) in 2010, and 32 GW (71.3%) in 2011. 302.6 GW of new power capacity has been installed since 2000. Of this, 28.2% has been wind power, 47.8% renewables, and 90.8% renewables and gas combined.

The net growth since 2000 of gas power (116 GW), wind power (84.2 GW) and solar PV (47.4 MW) was at the expense of fuel oil (down 14.2 GW), nuclear (down 13.5 GW) and coal (down 10.3 GW). 2011 saw a sharp decrease in nuclear capacity due to the early decommissioning of a number of reactors in Germany. The other renewable technologies (hydro, biomass, waste, CSP, geothermal and ocean energies) have also been increasing installed capacity over the past decade, albeit more slowly than wind and solar PV. The 21st century sees the EU power sector moving away from fuel oil, coal and nuclear while continuing to increase its total installed capacity with gas, wind and solar PV to meet increasing demand.

Wind power’s share of total installed power capacity over the last decade has increased more than fourfold from 2.2% in 2000 to 10.5% in 2011. Over the same period, renewable capacity increased by a third from 22.5% in 2000 to 31.1% in 2011.

Annual wind power installations in the EU have increased steadily over the past 17 years from 814MW in 1996 to 9,616 MW in 2011, an average annual growth rate of 15.6%.

A total of 93,957 MW is now installed in the European Union, a growth of 11% on the previous year. Germany remains the EU country with the largest installed capacity, followed by Spain, Italy, France and the UK. Nine other countries have over 1 GW of installed capacity: Portugal, Denmark, the Netherlands, Sweden, Ireland, Greece, Poland, Austria and Belgium.

Estimated wind energy production

The wind capacity installed at end 2011 will, in a normal wind year, produce 204 TWh of electricity, representing 6.3% of the EU’s gross final consumption. Denmark remains the country with the highest penetration of wind power in electricity consumption (almost 26%), followed by Spain (15.9%), Portugal (15.6%), Ireland (12%) and Germany (10.6%). Overall, in a normal wind year, installed wind capacity at end 2011 will meet 6.3% of the EU’s electricity needs.

Finally, it is very important to underline that there is a part of the wind energy industry that shows dramatic expansion, the offshore wind parks.

The nascent European offshore wind sector continues to expand with a 50% increase in newly installed capacity in the first six months of 2012 compared to the same period last year. A recently released report by the European Wind Energy Association (EWEA) notes that 132 new offshore wind turbines, totalling 523.2 megawatts (MW) were fully grid connected in Europe between January and June this year. By way of comparison, during the same period in 2011 a total of 348.1 MW of offshore wind capacity was installed in European waters.

Offshore wind power is increasingly attracting investors, including pension funds and other institutional and corporate investors, but it would be good to see more activity in southern Europe where jobs, investments and growth are desperately needed,

The EWEA report suggested that 2012 could turn out to be the best year ever for offshore wind energy in Europe, as a further 160 turbines, totalling 647.4 MW, are built but awaiting grid connection.

That potential additional increase is, however, subject to weather conditions at sea and grid connection delays. The report noted that 4,336 MW of offshore wind capacity was operating as of 30 June 2012 — up from 3,294 MW in June 2011 — and producing electricity for the equivalent of four million households. During the fi rst half of 2012 overall, 13 wind farms were under construction. Once completed those wind farms will account for an additional capacity of 3,762 MW. In all, the report added, 1,503 offshore wind turbines were fully grid connected as of 30 June in 56 wind farms across 10 countries, with a total capacity of 4,336 MW. EWEA believes Europe’s offshore wind potential is enormous and able to meet the region’s demand seven times over. The Association also notes that offshore wind deployment is foreseen to expand dramatically in the years to come. This expansion is strongly driven by EU and national policies that aim to provide a much greater penetration of renewable energy sources.

According to the EWEA “Wind in our Sails” report, 40 GW of offshore capacity should be installed by 2020, which will cover 4% of the European Union’s electricity demand thereby avoiding the emission of 87 million tonnes of C02 into the atmosphere (equivalent to the exhaust emissions of 44 million vehicles). In addition, European wind sector could employ 462,000 people, including 169,500 in the offshore segment by the year 2020. In 2030, the number of jobs in the offshore sector could be as high as 300,000 out of a total of 480,000.

Greece ought to become a competitive player in offshore wind industry not only installing turbines but also producing parts of the respective equipment. More now than ever, it is of crucial importance a new development model to be implemented in Greek Energy Policy connecting the industrial production with the selected energy technology for installation.

by Dimitris Sarantopoulos
Director of  AUEB iMBA Energy & Sustainability Club

RESOURCES: EWEA European Statistics 2011, Institute of Southeastern Europe (IENE) market insight May 2012, GLOBAL WIND ENERGY COUNCIL