Global Wind Energy Outlook

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3GLOBAL WIND ENERGY OUTLOOK | 2014

F O R E W O R D

T

he Global Wind Energy Council and Greenpeace International are pleased to present this fifth

edition of the Global Wind Energy Outlook for2014, the latest product of a collaboration thatgoes back to 1999. A lot has changed since then.

Wind power has now firmly established itself as amainstream option for new electrical generation.The most remarkable recent development is thatin an increasing number of markets, wind power isthe least cost option when adding new generationcapacity to the grid, and prices continue to fall. Thereare now commercial wind power installations inmore than 90 countries with total installed capacity

of 318 GW at the end of 2013, providing about 3% ofglobal electricity supply last year.

While this is an amazing success story, it is alsothe case that due to a combination of the variousmanifestations of the economic crisis, low or negativedemand growth in the OECD economies, and policy

instability in key markets, growth has been essentiallyflat for the last four years. The last significant jumpin annual market size was in 2009, when the marketgrew by over 40% in comparison with 2008, to justover 38 GW. Since then, it has hovered around the 40GW mark, with major ups and downs in the US, anend to the exponential growth in the Chinese marketand little or no growth in Europe.

However, the Chinese market has recovered andposted strong (25%) growth in 2013; the US marketseems to be back on track for 2014 and 2015 at least,and it seems as though the Indian market is readyto start growing again and beginning to realize itspotential in that market which so desperately needsnew electricity supply.

The most exciting areas of new growth are in Brazil,Mexico and South Africa. The Brazilian industry is set

to install nearly 4 GW in 2014 alone; energy reformin Mexico has set that country on course for a ~2GW/annum market for the next 10 years; and South Africawill rack up impressive numbers in 2014, which webelieve is just the beginning of major developmentsacross Africa. 2014 should be a pretty good year.

But the Global Wind Energy Outlook isn’t about2014 or 2015. It’s about what the industry will looklike in 2020, 2030 and beyond. There is much thatwe don’t know about the future, and there will nodoubt be unforeseen shifts and shocks in the global

economy as well as political ups and downs; and noone knows whether or not the global community is

going to respond proactively to the threat of climatechange, or try to do damage control after the fact.But it seems clear that for all of the reasons that windpower has gotten to where it is today, it will play a

significant and growing role in our electricity supply.

As in previous editions, we use the InternationalEnergy Agency’s World Energy Outlook as abaseline for comparability purposes, in terms ofregions, projected GDP and population growth, thedevelopment of electricity demand, etc. We use their‘New Policies scenario’ which has now become thecentral scenario for the World Energy Outlook.

We examine three development paths for theindustry: the IEA New Policies scenario, the GWEOModerate scenario and the GWEO Advancedscenario. These are measured against two differentdemand scenarios: that contained within the IEAstudy, and an Energy Efficiency demand scenario. Wehope that you find it useful.

Steve SawyerSecretary GeneralGlobal Wind Energy Council

Klaus RaveChairmanGlobal Wind Energy Council

Sven TeskeDirector, Renewable EnergyGreenpeace International

› In an increasingnumber of markets,wind power is now theleast cost option whenadding new capacity tothe grid, and pricescontinue to fall. ‹


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4 GLOBAL WIND ENERGY OUTLOOK | 2014

1 S P EC I A L F O C U S

1 M O M E N T U M F O R C H A N G E ?


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1MOMENTUM FOR CHANGE?

A fter the collapse of the last Big ClimateSummit in Copenhagen in 2009, formany if not most people the climate issuewas ‘over’, or at least the hope of seriousaction by governments was over. Fatigue,shattered expectations, disappointmentand despair drove away all but the scientists,hard-core activists and civil servants whose

job it is to keep the talks going.

But climate change is back – bigger and badder

than ever, and we have an opportunity to makea big step forward in the run up to the next BigSummit in Paris in December 2015. It’s urgentthat we get it right this time.

For those who don’t have the patience toplow through the Intergovernmental Panelon Climate Change’s latest assessment report

– it’s 5th since 1990 – you don’t have to goany further than your local newspaper, or yourfavorite web page:

‘Super typhoon’ Haiyan which wrought

devastation in the Philippines;

Hurricane Sandy which put lower Manhattan

out of business;

Frightening new evidence about the instability

and vulnerability of the Greenland ice sheet,

whose collapse would cause seven meters

of global sea level rise, at the end of the day.

Goodbye London, New York, Shanghai, Tokyo…

Projections of extreme weather damage of one

trillion USD/year by mid-century;

…the list goes on. Oh, and California’s CentralValley is out of water. That’s right - out of water .There are communities that haven’t had waterrunning in their taps for five months now - can’tflush their toilets; no showers. For the moment,they’re getting their drinking water from thefire department, although it’s not clear howmuch longer that will last.

The 400,000 people who marched in the runup to UN Secretary General Ban Ki-moon’sClimate Summit in New York in Septemberhave gotten the message. So have the many

major corporations who were reported tohave pounded the table behind closed doors inNew York demanding action; and so have thestruggling farmers in India, sub-Saharan Africa,California and Australia.

RETOOLING JUST ABOUT THE ENTIRETY OF

HUMAN CIVILIZATION

The good news is that unlike 25 years ago whenthe climate issue first emerged, and indeed

even unlike five years ago in Copenhagen, wehave the technology to solve the problem, andto do so cost effectively. “It doesn’t cost theearth to save the planet”, said IPCC WorkingGroup III Chairman Ottmar Edenhofer whenunveiling the IPCC’s latest work on climatemitigation. Wind and solar are taking over thepower sector. Electric mobility and improvedbattery technology is on the rise. Improvedmaterials science, energy efficiency equipmentand practices, and an almost inexhaustiblelist of other technologies and innovation havegiven us the tools we need, or at least most of

them; and the rest can be picked up along theway.

Not to say that it’s going to be easy – we’retalking about retooling just about the entiretyof human civilization in the next 40 years –which, by the way, we’re probably going to doanyway; the question is whether we do it rightthis time, at least in terms of the climate.

The much greater obstacle lies in the political,economic and institutional inertia which have

bogged down the discussion for too long now.The fossil fuel industry, the most powerfulvested interest in the world today, continues todo everything it can to obfuscate the scienceand slow down political progress. Not theirleast pernicious influence is on the politiciansthey own, particularly those in the US Congress

– and in the places where the fossil fuel industryis a family business masquerading as a nationalgovernment in the Persian Gulf – and in theplaces where fossil fuel exports have becomea blunt political and military instrumentto bludgeon recalcitrant neighbours intosubmission.

Wild Horse Renewable Energy Center© Puget Sound Energy


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1 MOMENTUM FOR CHANGE?

› The dramaticprogress of wind andsolar technologiesover the past decadeshas brought us to thepoint where the visionof a clean sustainableenergy future is wellwithin reach. ‹

But we have a chance to change all that.The dramatic progress of wind and solartechnologies over the past decades havebrought us to the point where the vision of aclean sustainable energy future for our wholeeconomy is well within reach, and has becomethe explicit policy direction of an increasingnumber of countries.

Further, for those who attended the march inNew York and the subsequent summit, there

is once again a positive feeling, a palpablemomentum for change. The trick will be toturn that into instructions from politicians totheir civil servants, including but not limited

to those who are negotiating towards Paris in2015. At the end of the day, it is governmentswhich will set the frameworks at national and

international level; who determine the extentto which we can succeed in the time required.

For time is the one thing we don’t have – notmuch, anyway. All of the science indicatesglobal emissions need to peak in the next five

years if we are to have any reasonable chanceof avoiding the worst ravages of man-madeclimate change, i.e., keeping global meantemperature rise below 2°C above pre-industrial levels. Or, if you happen to dependupon a vulnerable coral reef ecosystem, if youhave extensive low-lying coastal territory, orif you live on a low lying island in the Pacific,Caribbean or Indian Ocean, then you’d prefer

that global mean temperature rise be keptbelow 1.5°C.

To preserve a chance to reach either of thosetargets, then there is one clear and immediateimperative: global emissions must peak andbegin to decline before the end of this decade

– which is not impossible, but it’s gettingincreasingly difficult; and the longer we waitthe more expensive it will be.

The power sector isn’t the whole problem, butit is the largest single contributor to globalgreenhouse gas emissions – about 40% ofenergy related CO emissions, and about 25%

of overall greenhouse gas emissions. If we wantto make a difference in that sector in the next5-10 years, then we don’t have a lot of options.

First and foremost, we need massive and rapidimplementation of existing energy efficiency andenergy saving technologies and practices, whichwill yield the greatest benefit in the shortestperiod of time. Secondly, no new coal plantsshould be built, and fuel-switching from coal togas should be implemented wherever possible.And finally, continue and accelerate the dramaticgrowth of renewable generation technologies

– and although solar makes a significantcontribution in the period after 2020, and maybe the largest energy source of all by 2050, inthe next 5 to 10 years the big contribution toemission reductions will come from hydro andwind. That’s what we should focus on.

“ T H E L O N G E R W E W A I T

T H E M O R E E X P E N S I V E

I T W I L L B E …


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1MOMENTUM FOR CHANGE?

This edition of the Global Wind Energy Outlookshows what could be done with the rightpolitical support in the period out to 2020,and subsequently to 2030. On our currenttrajectory we will very likely displace about1 billion tonnes of CO per year by 2020, andit could be as much as 1.2 billion tonnes/yearwith the right support; and for the periodbetween 2020 and 2030, we’ll probably get totwo billion tonnes or so per year muddling alongas we have been, but that could be three billion

tonnes or more per year by that time. New andrefurbished hydro can deliver reductions ona similar scale, and solar will begin to make alarger difference in the period after 2020. But

with unequivocal political will to transform ourenergy system which is required to meet theclimate challenge, it could be even more.

As an old friend of mine from Citibank is fondof saying, “We’re in the middle of a 100-yeartransition away from fossil fuels and towardsrenewables – and we’re winning, at least inthe marketplace”. Yes, we’re winning, but arewe winning fast enough to save the planet?Actually, not the planet – the planet will befine – the question is whether we will win fastenough to save human civilization. Some saythe planet would be better off if we weren’taround to pollute the air, water and land. ButI prefer to think of it as a golden opportunityto demonstrate the capability of our species toevolve to the next stage.

As Morgan Freeman said in a recent film henarrated for the New York Summit:

“One day very soon we’ll be asked, ‘what didwe do?’…and we’ll say,’ We did everything wecould.’ We have to. Because if we don’t, therewon’t be anyone left to ask.”

… B E C A U S E I F W E D O N ’ T ,

T H E R E W O N ’ T B E A N Y O N E L E F T

T O A S K ”

Wild Horse Renewable Energy Center © Puget Sound Energy


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C H A P T ER T I T LE12 T H E GLO B A L W I N D EN ER GY O U T LO O K S C EN A R I O S

2 THE GL OBAL WIND ENERGYO U T L O O K S C E N A R I O S


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2T H E GLO B A L W I N D EN ER GY O U T LO O K S C EN A R I O S

› Broader range ofgovernments willhave to begin torespond to theincreasing imperativefor the energysecurity and pricestability offered bywind energy.

‹

THREE VISIONS OF THE FUTURE

The Global Wind Energy Outlook exploresthe future of the wind energy industryout to 2020, 2030 and up to 2050. With theInternational Energy Agency’s New Policiesscenario from the World Energy Outlook asa baseline, we have developed two scenariosespecially for this publication: the GWEOModerate scenario and the GWEO Advancedscenario.

The GWEO Moderate and Advanced scenarioshave evolved over the years as a collaborationbetween the Global Wind Energy Council,Greenpeace International and the GermanAerospace Centre (Deutsches Zentrum furLuft-und-Raumfahrt – DLR). These scenariosfor the future of the wind industry havecontributed to an ongoing series of broaderstudies on global sustainable energy pathwaysup to 2050 conducted by DLR and Greenpeacein collaboration with a number of industryassociations including GWEC. The ‘Energy

[R]evolution’ scenario’, or ‘2° Scenario’, hasbecome one of the benchmarks in internationalenergy scenario discussions, utilized by theIPCC, IEA and others.1

The upheaval in electricity markets around theglobe, the wild swings in policy both in favorof and against renewable energy deploymentand the uncertain future of the global climateregime make predictions about the future ofthis or any other industry even more difficultthan usual. However, it is also the case that

as wind power plays a more and more centralrole in our electricity system, that the variousscenarios from industry, the IEA, NGOs andothers all begin to converge. Here we presenteach of the three scenarios for each of the 10IEA-defined regions as well as global totals,looking towards 2020 and 2030 – with longerterm projections out to 2050 in the Annextable. A brief description of the underlyingassumptions and orientation of each scenariois listed below.

IEA NEW POLICIES SCENARIO

Originally, we used the IEA World EnergyOutlook’s ‘Reference’ scenario as the baselinefor this exercise. However, that scenario hasbeen renamed the ‘Current Policies’ scenarioand is no longer the central scenario againstwhich variations are tested within the WEOframework, as it is clear that continuing thestatus quo is unlikely in the extreme.

The ‘New Policies’ scenario is based on anassessment of current directions and intentionsof both national and international energy andclimate policy, even though they may not yethave been incorporated into formal decisionsor enacted into law. Examples of this wouldinclude the emissions reduction targets adoptedin Cancun in 2010, the various commitmentsto renewable energy and efficiency at nationaland regional levels, and commitments bygovernments in such fora as the G-8/G-20 andthe Clean Energy Ministerial. The New Policiesscenario is now at the center of the WEO

analysis; the version which appears in the 2013WEO runs out to 2035 and we have extrapolatedit out to 2050 for comparison purposes.

GWEO MODERATE SCENARIO

The GWEO ‘Moderate’ scenario has many ofthe same characteristics as the IEA New Policiesscenario, taking into account all policy measuresto support renewable energy either alreadyenacted or in the planning stages around the

world, and at the same time assuming that thecommitments for emissions reductions agreedby governments at Cancun will be implemented,although on the modest side. At the sametime it takes into account existing and plannednational and regional targets for the uptake ofrenewable energy in general and wind energy inparticular, and assumes that they are in fact met.

Through the five year period out to 2018, theModerate scenario is very close to our annualfive year market forecast, based on industryorders and planning as well as intelligence fromour global network about new and emergingmarkets.

Rio do Fogo, Brazil © Wind Power Works

1 See http://www.energyblueprint.info


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T H E GLO B A L W I N D EN ER GY O U T LO O K S C EN A R I O S2

As wind powerplays a more andmore central role inour electricity system,the various scenariosfrom industry, the IEA,NGOs and others allbegin to converge.

After 2018 it is difficult to make a preciseforecast given the current set of globaluncertainties, but at that stage we assume thata broader range of governments will have begunto respond to the increasing imperative for theenergy security and price stability offered bywind energy, as the LCOE of wind continuesto come down and the price of conventionalgeneration continues to go up. Further, it isexpected that there will be the beginnings of

some sort of response to whatever is agreed inUNFCCC climate change process which peaksin Paris in December 2015.

GWEO ADVANCED SCENARIO

The ‘Advanced’ scenario is the most ambitious,and outlines the extent to which the windindustry could grow in a best case ‘wind energyvision’, but still well within the capacity ofthe industry as it exists today and is likely togrow in the future. It assumes an unambiguouscommitment to renewable energy in line withindustry recommendations, the political will

to commit to appropriate policies and thepolitical stamina to stick with them.

It also assumes that governments enact clearand effective policies on carbon emissionreductions in line with the now universallyagreed objective of keeping global meantemperature rise below 1.5-2°C above pre-industrial temperatures. Wind power is anabsolutely critical technology to meeting the

first objective in that battle - which is gettingglobal emissions to peak and begin to declinebefore the end of this decade.

GLOBAL SCENARIO RESULTS

The IEA’s New Policies scenario shows theglobal wind market returning to 2012 levelsin 2016 and then gradually decreasing andstabilizing at about the 2010 market level after2020, and only growing very slightly from thatlevel out to 2030.

G L O B A L C U M U L A T I V E W I N D P O W E R C A P AC I T Y

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000Advanced scenarioModerate scenarioNew Policies scenario

MW

2013 2015 2020 2030 2040 2050

New Policies scenario

MW 318,128 396,311 610,979 964,465 1,324,814 1,684,074

TWh/a 620 972 1,499 2,535 3,482 4,426

Moderate scenario

MW 318,128 413,039 712,081 1,479,767 2,089,261 2,672,231

TWh/a 620 1,013 1,747 3,889 5,491 7,023

Advanced scenario

MW 318,128 420,363 800,615 1,933,989 3,024,473 4,042,475

TWh/a 620 1,031 1,964 5,083 7,948 10,624


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› Under theAdvanced scenario,wind power couldreach nearly2,000 GW by 2030,supply between16.7-18.8% ofglobal electricityand help save over3 billion tons ofCO emissions

annually.

‹

The GWEO scenarios paint a picture of twodifferent futures:

The Moderate scenario reflects a worldwhich carries on more or less the way ithas for the past decade, with wind powercontinuing to gain ground but still strugglingagainst heavily subsidized incumbents;without a comprehensive or cohesive carbonmarket, and with those that exist at verylow prices. Policy instability decreases, but

is still a factor, although the competition inOECD markets for a larger share of a stableor dwindling pie is intense.

The Advanced scenario shows the potentialof wind power to produce 25-30% of globalelectricity demand by the end of the scenarioperiod, where there is a strong internationalpolitical commitment towards meetingclimate goals and national energy policyis driven by the need for enhanced energysecurity, price stability, job creation and theneed to conserve our precious fresh water

resources. Which future shall it be?

CAPACITY GROWTH

ASSUMPTIONS ON GROWTH RATES

Growth rates in the GWEO scenariosare based on a combination of historicaltrends, current and planned policies, newand emerging markets for wind power, andassumptions on the direction of overall

climate and energy policy. While the double-digit growth rates assumed in both theModerate and Advanced scenarios out to2020 may seem high for a manufacturingindustry, actual wind industry cumulativegrowth rates have averaged about 26% forthe past eighteen years. Interestingly, annualmarket growth rates over that same periodare only a bit less, about 23%, although theinter-annual variability is much higher due tothe vicissitudes of the marketplace and thestate of the global economy. The cumulativemarket growth figures are a more useful wayto look at the industry over the longer term.

The Moderate scenario starts with about14% growth in 2014, tapering off graduallyto 10% by 2020 and then also to 6% by2030, while the IEA New Policies scenariostarts at 12% in 2014, sinking to 7% by 2020and then to 4% by 2030.

In the Advanced scenario, cumulative growthrates start off well below the historicalaverage at 15%, remain steady in the middleof this decade and then taper off to 13% by

the end of the decade, dropping to 6% by2030.

It should be borne in mind that cumulativemarket growth figures will inevitably dropover time in almost any scenario as the sizeof the cumulative market grows; althougheven small percentage increases a decade outfrom now will mean a large actual increase inthe quantity of wind power deployed.

Middelgrunden wind farm, Denmark© Wind Power Works


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SCENARIO RESULTS

The IEA New Policies scenario projects thatannual wind energy markets will increasegradually until 2016, and then shrink to justunder 40 GW/year by the end of the decade.

It then projects a gradual decrease in theannual market towards 33 GW/year by 2030and remains essentially flat for the rest of theperiod out to 2050 in net terms, although newinstallations would increase because of theincreasing opportunity/demand for repoweringas machines reach the end of their workinglife. On the basis of this, cumulative installedcapacity would still reach 611 GW by 2020, and964 GW by 2030, the latter of which is about50 GW higher than that projected by the NewPolicies scenario two years ago.

The GWEO Moderate scenario follows thelines of our short term market productions

produced for our annual market update out to20182, with annual market size topping 65 GW/ year by 2020 for a total installed capacity of712 GW by that time. This is just under 50 GWless than we projected for the moderatescenario just over two years ago, which shows

the longer term impact of the effective lackof annual market growth over the last several

years. However, we expect robust growth inthe period after 2020, with annual marketsexceeding 85 GW by 2030 and bringing totalinstalled capacity up to nearly 1500 GW by theend of that decade.

The GWEO Advanced scenario maintainsambitious growth rates throughout this decade,assuming that current market difficulties areovercome in the near future and that a broad,clear commitment to the decarbonisation of

Offshore wind turbine,North Sea© Holger Weitzel

2 http://www.gwec.net/publications/global-wind-report-2/

R E G I O N A L B R E A K D O W N : N E W P O L I C I E S S C E N A R I O

OECD Asia Pacific 5%

China32%

Non-OECD Asia 2%

India 9%

Eastern Europe / Eurasia1%

Middle East 1%

Africa 1%

OECD Europe27%

Latin America3%

OECD North America 19%

2 0 3 0

2 0 2 0

3%

34%

1%8%

19%

3%

30%

1%


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› Global totalinstalled capacitycould reach nearly2000 GW by 2030,if a robust climateregime was in place

along with politicalwill to tackle theclimate challengeacross most of theglobe which has beenmissing to date.‹

the electricity sector emerges rather quickerthan seems likely at present. Annual marketsize would top 90 GW by the end of thedecade, bringing total installed capacity to justover 800 GW by 2020, and nearly 2000 GWby 2030, which could only occur with a robust

climate regime in place and the kind of politicalwill to tackle the climate challenge across mostof the globe which has been missing to date.

PRODUCTION AND SHARE OFELECTRICITY SUPPLY

ASSUMPTIONS ON TURBINE CAPACITY

The rated output, rotor diameter and averageheight of wind turbines have steadily increasedover the years. While the average size of turbinesvaries substantially by country and region, the

average turbine installed in 2013 was 1.93 MW,against an average of 1.34 MW for all currentlyoperating turbines worldwide, continuing thesteady increase since the industry began. Thistrend is expected to continue as larger andlarger machines are developed for the offshore

industry, and larger and more efficient turbinesare developed to extract the most energyfrom new sites as well as for repowering oldsites, many of whose turbines are nearingtheir design lifetimes of 20 years. The need forsubstantial and increased repowering has beenbuilt into the GWEO scenarios. It also shouldbe noted, however, that there is a trend toinstall smaller rated machines on taller towerswith longer blades in lower wind speed areascloser to demand centers, which opens up newareas for commercial wind development, oftenin areas close to load centers where the poweris needed most.

R E G I O N A L B R E A K D O W N : M O D E R A T E S C E N A R I O

OECD Asia Pacific 3%

China28%

Non-OECDAsia 2%

India8%

Eastern Europe / Eurasia4%

Middle East 1% Africa 5%

OECD Europe 23%

LatinAmerica

6%

OECD North America 20%

2 0 3 0

2 0 2 0

2%

30%

1%

7%

22%

4%

29%

3%


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ASSUMPTIONS ON CAPACITY FACTORS

The ‘capacity factor’ of a wind turbine or a windfarm refers to the percentage of the nameplatecapacity that a turbine will deliver in terms ofelectricity generation over the course of a year.This is primarily governed by the wind resourcesin the particular location, but is also affectedby the efficiency of the turbine, its suitabilityfor the particular location, the reliability ofthe turbine, how well the wind project ismanaged, and whether or not it is subjected tocurtailment by the grid operator. For example,a 1 MW turbine operating at a 25% capacity

factor will deliver 2190 MWh during a year;a 2 MW turbine operating at a 35% capacityfactor will deliver 6132 MWh during a year, etc.

Average capacity factors globally today areabout 28%, but vary widely from region toregion, and are generally increasing with rapidnew developments in very windy locationsin Brazil, Mexico, offshore and elsewhere. Asmentioned above, there is also an increasedemphasis on developing new turbines for newlocations with lesser wind resources but whichmay be closer to load centers. These ‘low windspeed’ turbines generally are on taller towers

W I ND P OW ER S HA R E OF G LOBA L E LEC T R IC I T Y DE M A ND

%

0

5

10

15

20

25

30

35 Advanced scenario – Energy efficiency demand projectionAdvanced scenario – IEA demand projection

Moderate scenario – Energy efficiency demand projectionModerate scenario – IEA demand projection

New Policies scenario – Energy efficiency demand projectionNew Policies scenario – IEA demand projection

2013 2015 2020 2030 2040 2050


IEA demand projection 3% 5% 6% 8% 10% 11%

Energy Efficiency demand projection 3% 5% 7% 9% 11% 13%

Moderate scenario



Advanced scenario



SPECIFIC COSTS PER KILOWATT INSTALLED

1,050

1,100

1,150

1,200

1,250

1,300 Advanced scenarioModerate scenarioNew Policies scenario

205020402030202020152013


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using the same assumptions for populationand GDP growth over the period as the IEA,and assuming no structural economic changes

beyond those in the IEA scenario. The uptakeof e-mobility after 2020 is also included inthe study. It does not foresee lifestyle changesor loss in comfort levels, nor does it foresee‘stranded’ assets, i.e., the early retirementof inefficient installations in favour of moreefficient ones – which is a very conservativeassumption given that such ‘early retirement’is already beginning to occur and seems likelyto increase substantially.

This ‘Energy Efficiency’ demand projection,then, only taps a portion of the potential forenergy savings and increased efficiency whichare available to us now, and which will likely be

available in the near future. However, it is anindicator of what can be done at very low or nocost if we are to be serious about achieving our

climate and energy security objectives.

SCENARIO RESULTS

In the IEA New Policies scenario, wind powercontributes just under 1,500 TWh of electricityto the global energy mix in 2020, more thantwice the ~620 TWh produced by wind powerin 2013.

Measured against the two different demandscenarios, this would count for 6.2 to 6.7%of total global electricity demand. By 2030,this number rises to 2,535 TWh, accountingfor between 8.4 and 9.4% of global demand

Horns Rev, Denmark © GWEC


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› Continuousdesign refinementsand experience withmass producing anincreasing numberof turbines havedecreased the costof the technology. ‹

– a respectable number, but far less than windpower’s potential contribution.

The GWEO Moderate scenario envisages asubstantially larger contribution from wind,which would generate nearly 1,750 TWh in 2020,rising to almost 3,900 TWh in 2030. This wouldmean that wind power would meet between7.2% and 7.8% of global electrical demand in2020, and between 12.9% and 14.5% in 2030;quite a substantial contribution, but probablynot in line with what would be required to meetagreed climate protection goals.

The GWEO Advanced scenario shows thatwind power could generate over 1950 TWhof electricity by 2020, meeting between 8.1%and 8.8% of global electricity demand, in

line with the industry’s long term objectivesand consistent with the idea of having globalemissions peak before 2020. These numberscontinue to rise steeply in the subsequentdecade, with wind power contributing morethan 5,000 TWh in 2030, meeting between16.8% and 18.9% of total electricity demand.

INVESTMENT

The capital cost of turbines has been decreasing,

precipitously in some markets over the pastseveral years, both in adjusted and in absoluteterms. Of late, this has been largely theresult of market forces, but at the same time,continuous design refinements and experiencewith mass producing an increasing number ofthe same or similar turbines have decreased thecost of the technology itself. The other majorfactor, commodity prices, has contributed tothe decrease in prices, although the industryis susceptible to price spikes, particularly forsteel and copper. There are also significantregional variations, as both competition and

other underlying market factors affect the finalcosts, and there will be inter-annual variationsbeyond the scope of these scenarios as a resultof market forces, commodity prices and therate of inflation.

Regardless, the growth of the wind powerindustry is attracting increased investment,averaging about €50 billion in new wind powerequipment annually over the past 4 years.

The development of turbine costs in the GWEO

scenarios assumes gradually decreasing costsin absolute terms, reflecting the projectedgrowth of the industry. In the IEA New Policiesscenarios the costs remain roughly static overthe period out to 2030. Capital costs perkilowatt of installed capacity were consideredto have averaged €1,252 in 2013. For theNew Policies scenario they don’t changesignificantly over the scenario period, endingup at €1,241/kW in 2030. In the Moderatescenario prices drop to about €1,214/kW in2020 and to €1,203/kW by 2030; and in theAdvanced scenario, with rapid scale up, costsdrop more rapidly, down to €1,137 by 2020 andto €1,100 by 2030.


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› The wind industrycreates a large numberof skilled, semi-skilledand unskilled jobs,and this has taken on

an increasing politicaland economicimportance.‹

Annual investments in wind power equipmentin 2013 were at €44 billion. In the Referencescenario, this goes up to €50 billion per year by2020, and decreases to €41 billion in 2030.

In the Moderate scenario, annual investmentincreases to €80 billion by 2020 and to€102 billion per year by 2030. Finally, in theAdvanced scenario, annual investments rise to€104 billion by 2020, and then to €141 billionby 2030.

These figures are indeed large, but they shouldbe seen in the context of total power sectorinvestments, which will, according to the IEA,need to be over €570 billion annually for thenext two decades in the context of the NewPolicies scenario.

EMPLOYMENT

As governments continue struggle with highunemployment rates in many parts of theworld, both the current reality and future

potential for employment in the wind industryhas become increasingly significant. Theindustry creates a large number of skilled,semi-skilled and unskilled jobs, and this hastaken on an increasing political as well aseconomic importance of late. The macro-economic effects of the development of thewind power sector as well as the renewableenergy sector as a whole is increasingly a factorin political decision making about our futureenergy choices. This is especially the case inview of the fact that much of the investmentand many of the jobs created is in rural areas,which can help stem the demographic floodtowards the cities.

INVESTMENT AND EMPLOYMENT ANNUAL INSTALLATION MW

0

50000

100000

150000

00000

50000 Advanced scenarioModerate scenarioNew Policies scenarioMW

2013 2015 2020 2030 2040 2050


Annual Installation MW 35,467 39,989 39,978 32,948 39,679 35,455

Cost € / kW 1,252 1,242 1,240 1,241 1,231 1,231

Investment € billion /year 44 50 50 41 49 44

Employment Job / year 601,519 690,627 721,340 713,645 913,332 945,755

Moderate scenario


Cost € / kW 1,252 1,234 1,214 1,203 1,190 1,186


Employment Job / year 601,519 824,141 1,090,378 1,504,698 2,272,047 2,602,167

Advanced scenario


Cost € / kW 1,252 1,214 1,137 1,100 1,094 1,084


Employment Job / year 601,519 900,324 1,450,753 2,171,804 3,311,064 3,861,712


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A number of national and regional assessmentsof employment in the wind industry havebeen carried out around the world in recent

years, although there is no comprehensiveauthoritative ‘ground-up’ assessment. Theassumption we have made and continueto make, which is verified by such studiesas do exist, is that for every new megawatt

of capacity installed in a country in a given year, 14 person/years of employment iscreated through manufacturing, componentsupply, wind farm development, construction,transportation, etc. While there is quitesubstantial regional variation, this seemsto work as a global average. As productionprocesses are optimised, we project thatthis level will decrease to 13 person/years ofemployment per new megawatt installed by2020, and to 12 person/years of employmentby 2030.

In addition, 0.33 person/years of employmentper MW of installed capacity are judged to be

needed for operations and maintenance workat existing wind farms. Again, there will besubstantial regional variations, but this alsoworks as a global number.

Under these assumptions, and on the basisof existing studies, the industry currentlyemploys about 600,000 people, as of the end

of 2013. Under the IEA New Policies scenario,this number would peak at 780,000 jobs in2016, and drop slowly towards 700,000 jobsby 2030.

In the GWEO Moderate scenario, a verydifferent picture emerges, with employmentlevels rising to over 824,000 by 2015, 1.1 millionby 2020, and to 1.5 million by 2030.

In the GWEO Advanced scenario, employmentwould rise to about 900,000 by 2015, endingthe decade with 1.45 million jobs, and reachnearly 2.2 million by 2030.

Service team at work,Hamburg, Germany© Joerg Boethling


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2 T H E GLO B A L W I N D EN ER GY O U T LO O K S C EN A R I O S

›Wind power’s

scalability and itsspeed of deploymentmakes it an idealtechnology to bringabout the earlyemissions reductionswhich are required ifwe are to keep thewindow open forkeeping global meantemperature rise to2°C or less abovepre-industriallevels. ‹

CARBON DIOXIDE SAVINGS

Wind power has many environmentalbenefits, including the elimination of local airpollution and nearly zero water consumption.However, the greatest benefit is wind power’scontribution to reduction of carbon dioxideemissions from the power sector, which is thesingle largest anthropogenic contributor to the

global climate change problem.

Modern wind energy technology has anextremely good energy balance. All of theCO emissions related to the manufacturing,installation, servicing and decommissioningof a turbine are generally ‘paid back’ afterthe first 3 to 9 months of operation. For therest of its 20 year design lifetime, the turbineoperates without producing any of the harmfulgreenhouse gases which are already disruptinglife on earth.

The benefit obtained from wind power inrelation to CO emissions depends entirely

on what sort of power plant it displaces. If itdisplaces hydro or nuclear power, the benefitis small; but if it replaces coal or gas, then thebenefit is enormous. Emissions from fossil fuelplants range from around 500g CO/kWh up

to 1200g CO/kWh or more for the dirtiestfuels. On the basis of the current electricitydistribution, we have calculated that 600g CO/kWh is a good average number to characterizethe savings generated by wind power, althoughthe regional variations will be significant. Whilethe majority of the existing plant is in regionswhich may be slightly lower than that number,the majority of new installations are in regionswhere what is displaced has significantly higherthan average emissons.

Annual reductions in CO from existing windpower plants were about 372 million tonnesin 2013. Under the IEA New Policies scenario,this is expected to rise to 899 million tonnesannually by 2020 and up to 1,521 tonnes per

year by 2030.

The GWEO Moderate scenario implies savingsof over 1 billion tonnes of CO/annum by 2020and more than 2.3 billion tonnes by 2030;while the GWEO Advanced scenario wouldresult in savings of nearly 1.2 billion tonnes ofCO per year by 2020, and 3.1 billion tonnes/

annum by 2030.

In cumulative terms, the IEA New Policiesscenario has wind power saving 7 billiontonnes by 2020, and over 19 tonnes by 2030.The GWEO Moderate scenario results in over7.5 billion tonnes in cumulative savings by2020, and 24.1 billion tonnes of CO savingsby 2030. The GWEO Advanced scenario yieldscumulative CO savings of nearly 7.9 billiontonnes by 2020, and 28.6 billion tonnes by2030.

These are significant reductions in all cases,but the critical issue here is not just the totalvolume of reductions, but the speed at whichthese savings are achieved, as these are long-lived cases, and the imperative is for early COemissions reductions to achieve the greatestbenefit for the atmosphere. Wind power’sscalability and its speed of deployment makesit an ideal technology to bring about the earlyemissions reductions which are required if weare to keep the window open for keeping globalmean temperature rise to 2°C or less abovepre-industrial levels.

United Nations SecretaryGeneral Ban Ki-moon at theUN Climate March in New York© United Nations Photo


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C U M U L A T I V E C O E M I S S I O N S R E D U C T I O N S

mio tons CO

0

30,000

60,000

90,000

120,000


2013 2015 2020 2030 2040 2050

A NNUA L CO E MI SSIONS R ED UC T ION S

mio tons CO

0

1,000

2,000

3,000

4,000

5,000

6,000


2013 2015 2020 2030 2040 2050

A NNUA L A ND CUM UL AT IV E CO E MI SSION S R E DU CT IO N S mi o ton s CO

2013 2015 2020 2030 2040 2050


Annual CO savings 372 583 899 1,521 2,089 2,655

Cumulative CO savings 2,056 3,164 7,045 19,083 37,315 61,354

Moderate scenario

Annual CO savings 372 608 1,048 2,333 3,294 4,214


Advanced scenario

Annual CO savings 372 619 1,178 3,050 4,769 6,374



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2 T H E GLO B A L W I N D EN ER GY O U T LO O K S C EN A R I O S

RESEARCH BACKGROUND

THE GERMAN AEROSPACE CENTER

The German Aerospace Center (DeutschesZentrum für Luft- und Raumfahrt – DLR) is thelargest engineering research organisation inGermany. It specialises, among other things,in the development of solar thermal powerstation technologies, the utilisation of low andhigh temperature fuel cells, particularly for

electricity generation, and research into thedevelopment of high efficiency gas and steamturbine power plants.

The Institute of Technical Thermodynamics atDLR (DLR-ITT) is active in the field of renewableenergy research and technology developmentfor efficient and low emission energy conversionand utilisation. Working in co-opoeration withother DLR institutes, industry and universities,its research focuses on solving key problemsin electrochemical energy technology andsolar energy conversion. This encompasses

application-oriented research, developmentof laboratory and prototype models as wasdesign and operation of demonstration plants.System analysis and technology assessmentsupports the preparation of strategic decisionsin the field of research and energy policy.

Within DLR-ITT, the System Analysis andTechnology Assessment Division has long termexperience in the assessment of renewableenergy technologies. Its main researchactivities are in the field of techno-economic

utilisation and system analysis, leadingto the development of strategies for themarket introduction and dissemination ofnew technologies, mainly in the energy andtransport sectors.

SCENARIO BACKGROUND

DLR was commissioned by the EuropeanRenewable Energy Council and Greenpeaceinternational to conduct the study ‘Energy [R]evolution: A sustainable global energy outlook’,developing global sustainable energy pathwaysup to 2050.1 This study was first published in

January 2007 and has been updated several

times since then2, most recently in 2012. Itlays out energy scenarios that are significantlylower than current levels, and within the rangeof scenarios consistent with a 2°C target.

Integral to the analsyis was an examinationof the future potential for renewable energysources, including wind energy. In collaborationwith the wind industry, the study looks atregional projections for wind power around the

world, and it is this work which forms the basisfor the Global Wind Energy Outlook scenarios.

The energy supply scenarios used in this report,which both extend beyond and enhanceprojections by the International Energy Agency,have been calculated using the MESAP/PlaNetsimulation model by DLR covering all 10 worldregions as delineated by the IEA. This modelhas then been developed in cooperation with

1 Krewitt W, Simon S, Graus W, Teske S, Zervos A, Schaefer , ‘The 2 degreesC scenario – A sus tainable world energy perspective’; Energy Policy, Vol

35, No. 10, 4969-4980, 2007; and Teske S, Pregger R, Simon S, Naegler T,Graus W, Lins C, “Energy [R]evolution 2010—a sustainable world energyoutlook”, Energy Efficiency, DOI 10.1007/s12053-010-9098-y

2 See http://www.energyblueprint.info


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an energy efficiency study originally developedby the Ecofys consultancy to take into accountthe future potential for energy efficiencymeasures, beyond those envisaged in theWorld Energy Outlook.

ENERGY EFFICIENCY STUDY

The aim of the original Ecofys energy efficiencystudy3 developed for the Energy [R]evolution

scenario was to develop low energy demandscenarios for the period from 2007 to 2050on a sectoral basis for the IEA regions asdefined in the World Energy Outlook series.Energy demand was divided into electricityand fuels. The sectors which were examinedwere industry, transport and other consumers,including households and services.

This study has now been updated by researchersat the University of Utrecht4, maintaining the

same parameters as the first study. The studyincludes the implementation of best practiceexisting technologies and a certain share of newefficiency technologies, while using the sameassumptions for population and GDP growthover the period as the IEA, and assuming nostructural economic changes beyond those inthe IEA scenario. The uptake of e-mobility after2020 is also included in the study.

While maintaining the same level of comfortand standard of living, and without ‘stranding’assets, i.e., not including retiring inefficientassets before the end of their economic life,the study concludes that savings of up to 36%can be made in electricity use, and up to 28%in fuel consumption. While nowhere near thetechnical potential for energy efficiency andenergy savings, the study shows the enormouspotential for emissions reductions offered bysuch measures, which would be an essentialpart of any serious efforts to tackle climatechange.

3 www.energyblueprint.info/1211.0.html4 http://www.energyblueprint.info/fileadmin/media/documents/2012/

UU_Demand_projections_for_energy_revolution_2012_30-3-12.pdf

Daman, India © Suzlon


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C H A P T ER T I T LE1REGIONAL BREAKDOWN OF CUMULATIVE CAPACITY UP TO 2030

OECD Europe Germany, Greece, Hungary, Iceland, Ireland, Italy, Luxembourg,the Netherlands, Norway, Poland, Portugal, Slovak Republic,Spain, Sweden, Switzerland, Turkey, United Kingdom

EU 28 Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic,Denmark, Estonia, Finland, France, Germany, Greece, Hungary,Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta,Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia,Spain, Sweden, United Kingdom

Eastern Europe/Eurasia Albania, Armenia, Azerbaijan, Belarus, Bosnia-Herzegovina,Bulgaria, Croatia, Estonia, Serbia and Montenegro,the former Republic of Macedonia, Georgia, Kazakhstan,

Kyrgyzstan, Latvia, Lithuania, Moldova, Romania, Russia,Slovenia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan,Cyprus, Malta

OECD North America Canada, Mexico, United States

OECD Asia Pacific Australia, Japan, Korea (South), New Zealand

India India

Latin America Antigua and Barbuda, Aruba, Argentina, Bahamas, Barbados,Belize, Bermuda, Bolivia, Brazil, the British Virgin Islands,the Cayman Islands, Chile, Colombia, Costa Rica, Cuba,Dominica, the Dominican Republic, Ecuador, El, Salvador,the Falkland Islands, French Guyana, Grenada, Guadeloupe,Guatemala, Guyana, Haiti, Honduras, Jamaica, Martinique,Montserrat, Netherlands Antilles, Nicaragua, Panama,Paraguay, Peru, St. Kitts and Nevis, Saint Lucia,Saint Pierre et Miquelon, St. Vincent and the Grenadines,Suriname, Trinidad and Tobago, the Turks and Caico s Islands,Uruguay and Venezuela

Middle East Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman,Qatar, Saudi Arabia, Syria, United Arab Emirates, Yemen

Non-OECD Asia Afghanistan, Bangladesh, Bhutan, Brunei, Cambodia, Chinese,Taipei, Cook Islands, East Timor, Fiji, French Polynesia,Indonesia, Kiribati, Democratic People’s Republic of Korea,Laos, Macao, Malaysia, Maldives, Mongolia, Myanmar, Nepal,New Caledonia, Pakistan, Papua New Guinea, Philippines,Samoa, Singapore, Solomon Islands, Sri Lanka, Thailand,Tonga, Vietnam, Vanuatu

Africa Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi,Cameroon, Cape Verde, Central African Republic, Chad,Comoros, Congo, Democratic Republic of Congo, Cote d’Ivoire,Djibouti, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gabon,Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho,Liberia, Libya, Madagascar, Malawi, Mali, Mauritania,Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria,Reunion, Rwanda, Sao Tome and Principe, Senegal, Seychelles,Sierra Leone, Somalia, South Africa, Sudan, Swaziland,United Republic of Tanzania, Togo, Tunisia, Uganda, Zambia,Zimbabwe

China People’s Republic of China including Hong Kong

O E C D N O R T H A M E R I C A Total Capacity in MW 2013 2014 2015 2020 2030

Ne w Pol ic ies sc ena ri o 70,885 74,191 77,497 118,108 181,398

Mo derate sc ena ri o 70,885 80,802 92,207 156, 366 295, 823

Ad va nce d sc ena rio 70,885 81,298 92,752 173, 684 399,912

L A T I N A M E R I C A Total Capacity in MW 2013 2014 2015 2020 2030

New Policies scenario 4,708 7,777 9,771 15,211 24,945

Moderate scenario 4,708 7,777 9,787 28,144 82,242

Advanced scenario 4,708 7,777 10,845 32,680 104,103

A F R IC A Total Capacity in MW 2013 2014 2015 2020 2030




OECD EUROPETotal Capacity in MW 2013 2014 2015 2020 2030

N ew Po li ci es s ce na ri o 1 17 ,00 6 1 28 ,3 15 1 40 ,75 4 1 84, 539 2 62 ,7 81

M od er at e s ce na ri o 1 17 ,00 6 1 28 ,6 47 1 40 ,5 21 2 03, 419 3 37 ,23 4

Ad va nc ed s ce na ri o 1 17 ,00 6 1 29 ,2 01 1 42 ,61 6 2 25 ,5 77 38 6, 01 7

EU 28Total Capacity in MW 2013 2014 2015 2020 2030

N ew Po li ci es s ce na ri o 1 17, 289 1 28 ,6 72 14 0, 62 3 1 82, 206 25 3, 84 7

M od er at e s ce na ri o 1 17, 289 1 28 ,4 48 1 39, 496 1 92, 664 3 00 ,9 58

Ad va nc ed s ce na ri o 1 17, 289 1 29, 56 4 14 3, 06 7 2 26, 154 3 89 ,2 02


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1C H A P T ER T I T LE

M I D D L E E A S TTotal Capacity in MW 2013 2014 2015 2020 2030

New Policies scenario 99 108 163 1,031 10,982

Moderate scenario 99 108 208 1,333 11,990

Advanced scenario 99 108 208 1,333 14,165

GLOBAL TOTALTotal Capacity in MW 2013 2014 2015 2020 2030

N ew Po li ci es s ce na ri o 3 18, 128 3 56, 322 3 96 ,3 11 61 0, 97 9 9 64, 46 5

M oderat e s cenario 3 18 ,1 28 3 63 ,9 08 4 13 ,0 39 7 12 ,0 81 1 ,4 79 ,7 67

A dvan ced s cenario 3 18 ,1 28 3 65 ,9 62 4 20 ,3 63 8 00 ,6 15 1 ,9 33 ,9 89

INDIA Total Capacity in MW 2013 2014 2015 2020 2030

Ne w Po lic ies sce nar io 20,150 22,138 25,121 47,896 83,188

Mo derate s cen ar io 20,150 22,138 25,121 49,111 125,382

Ad va nce d sc ena rio 20,150 22,268 25,445 55,872 154,207

OECD ASIA PACIFICTotal Capacity in MW 2013 2014 2015 2020 2030

New Policies scenario 7,096 8,075 9,299 18,953 43,148Moderate scenario 7,096 8,075 9,299 17,518 44,623


N O N O E C D A S I A Total Capacity in MW 2013 2014 2015 2020 2030

New Policies scenario 529 812 1,309 5,855 23,005

Moderate scenario 529 812 1,309 6,261 30,730

Advanced scenario 529 869 1,499 16,033 137,231

CHINA Total Capacity in MW 2013 2014 2015 2020 2030

N ew Po li ci es s ce na ri o 9 1, 424 1 08 ,5 04 1 25 ,3 00 2 08 ,38 7 3 10 ,1 95

Mo de ra te s ce na ri o 9 1, 42 4 1 08 ,5 85 1 25 ,5 46 2 16 ,6 46 4 14 ,4 06

A dv an ce d s ce na ri o 9 1, 42 4 1 08 ,9 89 1 26 ,78 7 23 0, 04 8 4 97 ,5 05

E A S T E R N E U R O P E / E U R A S I A Total Capacity in MW 2013 2014 2015 2020 2030


Moderate scenario 4,460 5,491 6,626 14,244 62,051Advanced scenario 4,460 5,866 8,327 24,748 75,669


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3 THE REGIONA LS C E N A R I O R E S U LT S


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3THE REGIONAL SCENARIO RESULTS

AFRICA

More than 95% of the people without

access to modern energy servicesare living either in Sub-Saharan Africa orNon-OECD Asia1. This problem is especiallyacute in peri-urban and rural areas in Sub-Saharan Africa. In many African countries,the electricity that is available is likely to begenerated by means of diesel generators orother small-scale plant, often using expensiveimported fuel. More small generatorskeep individual businesses, hospitals andhouseholds running. The high cost of relyingon imported fuels has a great impact on

some African countries’ economies, andmany of them spend a considerable shareof their scarce foreign exchange reserves onenergy imports.

Local, national or regional grids – where they doexist – are challenged by the increasing demandfor electricity from consumer equipment suchas refrigerators, lighting, mobile phones, TVsand computers; and outages are frequent.Large-scale power production in much ofAfrica is likely to mean large hydro (as found

in Egypt) or the coal-based generation that has

characterized South Africa’s power system.

Given Africa’s vast land mass and relativelylow population density, it seems likely that abroad mix of decentralized technologies willhave the flexibility to meet the needs of manyon the continent. Wind power, because of itsscalability, can and is beginning to play a keyrole in both decentralized and centralizedsystems in several countries.

Africa’s wind resource is best around the

coasts and in the eastern highlands, but it isin North Africa that commercial scale windpower has been developed. At the end of2013, over 90% of the continent’s total windinstallations of just over 1,255 MW were to befound across five countries - Egypt (550 MW),Morocco (291 MW), Ethiopia (171 MW), Tunisia(104 MW) and Cape Verde (24 MW). SouthAfrica will likely become the largest singlemarket for wind power in the foreseeablefuture.

A F R IC A TO TA L W IND P OW E R C A PA C I T Y IN M W

MW

0

20,000

40,000

60,000

80,000


2013 2014 2015 2020 2030




Montezuma Hills, California © Anthony Dunn

1 www.sustainableenergyforall.org


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3 THE REGIONAL SCENARIO RESULTS

EGYPT

In February 2008, Egypt’s Supreme Councilof Energy approved a plan to produce 20% ofits electric power from Renewable sources by2020. This target includes a 12% contributionfrom wind energy, which translates into morethan 7 GW of grid-connected wind power.

Egypt’s best-developed wind region so far isthe Zafarana district, with average wind speeds

in the area of 9 m/s. The project consists of aseries of linked wind farms, the first of whichstarted construction in 2001. In 2010, Zafaranawind farm’s total capacity reached 550 MW. Itis owned and operated by the Egyptian New &Renewable Energy Authority. Due to prevailingpolitical conditions, 2011-2013 has seen nonew project development across the country.However once there is increased politicalcertainty perceived by the investor community,the government’s goal of 7 GW of wind powerby 2020 is likely to be reached.

MOROCCO

The Moroccan government, under theintegrated Moroccan Wind Power Plan, hasset a target of installing 2000 MW of windenergy by 20202, a dramatic increase from theexisting 291 MW at the end of 2013. Moroccohas excellent wind resources along nearly itsentire coastline, as well as inland near the AtlasMountains.

Last year, French utility GDF Suez announced

that it would be constructing the 300 MWTarfaya wind farm in Morocco, which would bethe largest single wind project in Africa to date.The wind farm is likely to be fully commissionedby end of 2014.

SOUTH AFRICA

South Africa is ideally suited for wind powerdevelopment, given its abundant windresources, ample suitable sites and modernhigh voltage electrical infrastructure. However

its electricity market continues to facenumerous challenges.

In December of 2011, South Africa announcedthe preferred bidders for the first round underthe ‘ReBid’ Programme. Wind energy garnered634 MW in the first round out of a total of1,450 MW of renewable energy.

By the end of 2013, only 10 MW of capacitywas in operation. However 2014 will be a

milestone for the South African wind powermarket; where up to 1 GW of new capacity islikely to come online, marking the beginningof South Africa’s long-term plan for installing8.4 GW of wind power by 20303.

The South African Wind Energy Association(SAWEA) estimates that with the right policyframework, wind power could provide as muchas 20% of the country’s energy demand by2025, translating into 30,000 MW of installedwind capacity.

EAST AFRICA

After launching sub-Saharan Africa’s first largewind farm in 2012, Ethiopia added 90 MW windpower capacity in 2013 for a total installedcapacity of 171 MW.

The €623 million, 300 MW project (LakeTurkana) is under construction in Kenya.The project is expected to generateapproximately €118 (US$150) million per

year in foreign currency savings to Kenya

through fuel displacement costs. The projectis equivalent to approximately 20% of Kenya’scurrently (as of March 2014) installed capacityand will generate power at €7.52 cents/kWh(Ksh9/kWh4). According to the government,the electricity produced from this project willbe the cheapest source of electricity along withgeo-thermal.

These new wind energy projects will make asubstantial contribution to the total generatingcapacity in each of these countries.

2 http://www.one.org.ma/3 http://www.doe-irp.co.za/content/IRP2010_updatea.pdf4 Lake Turkana Wind Power http://ltwp.co.ke/


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THE GWEO SCENARIOS FOR AFRICA

Given Africa’s vast potential for wind powerdevelopment, in the north, along the coasts,and in South Africa, the GWEO scenariosfor wind power differ markedly from thosepresented by the IEA in its recent World EnergyOutlook.

Under IEA’s New Policies Scenario (NPS), windpower capacity will reach 3.9 GW by 2020, and

this would increase to 11 GW by 2030 on theentire African continent, producing 10 TWh in2020 and close to 28 TWh in 2030. This wouldcreate between 7,900 and 17,600 jobs.

The GWEO 2014 scenarios are more optimistic.Under the Moderate scenario, wind powerwould deliver more than four times as muchpower by 2020 as the IEA’s NPS forecasts, withan installed capacity of 19 GW generating50 TWh every year. This would then grow by4,000 - 6,000 MW every year up to 2030,when just over 75 GW of wind power capacitywould be installed, producing approximately198 TWh of clean electricity for Africa.

The Advanced scenario assumes that evenmore effort will be taken to exploit Africa’swind resources. By 2020, close to 21 GW ofwind power capacity could produce 55 TWhof electricity, growing to 86 GW producing226 TWh of electricity by 2030.

Wind power development could have asubstantial direct economic impact in Africa’swind rich nations. With annual investmentsto the order of €3.4 billion in 2020 and close

to €6 billion in 2030, wind power could growto become a considerable industry in Africa.The development of local manufacturingfacilities would provide thousands of highquality jobs for people across the continent,and the avoided costs of imported fuel wouldhave a very positive effect on these nations’foreign exchange.

Wind power would lead to net savings of over33 million tons of CO every year by 2020and over 136 million tons by 2030, providingeconomic and environmental co-benefits whileincreasing energy security at the same time.

Lake Turkana, Kenya© African Development Bank


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CHINA

In 2013, the new annual installed wind

power capacity in China (excluding HongKong, Macao and Taiwan) was 16.1 GW. Bythe end of 2013, the cumulative installedcapacity nationwide was over 91.4 GW, withChina maintaining its lead globally in termsof installed wind power capacity.

China’s NDRC has stated its target for RESto account for 30% of China’s electricitygeneration by 2020. In 2013 China generated5,322 TWh of electricity, including 3,959 TWhfrom coal power stations (74%); 896 TWh from

hydro power stations, 140 TWh from wind,8.7 TWh from solar PV; 112 TWh from nuclear,and the rest from other sources5. Renewables(including large hydro) accounted for almost20% of the generation last year.

POLICY FRAMEWORK AND OFFICIAL TARGETS

FOR WIND ENERGY

Early in 2011, the National EnergyAdministration (NEA) released the 12th Five-Year plan for renewable energy. This includes a

target of 100 GW of wind by 2015, consisting of

70 GW from the large Wind Base programme,30 GW from smaller projects, and an additional5 GW from offshore wind.

China’s current FIT was introduced in 2009,with an effective date of 1st August 2009.There are four different tariffs for regions withdifferent wind resources: CNY 0.51/kWh, CNY0.54/kWh, CNY 0.58/kWh and CNY 0.61/kWh.

Discussions about lowering China’s feed-in-tariff for wind power have been going on for

at least a year, and there is now a concreteproposal initiated by the Price and TariffDepartment of the National Developmentand Reform Commission (NDRC). It seems tobe driven by lower equipment prices, loweroverall wind system costs and perhaps mostimportantly, a reduction in the price of coal-fired electricity, which will reduce the amountof money available for the Renewable EnergyFund which finances the premium.

According to informed sources and newsreports, the latest draft that is now out forconsultation with stakeholders proposesreducing the existing tariffs by CNY 0.04 for

CHINA TOTAL WIND POWER CAPACITY IN MW

MW

0

100,000

200,000

300,000

400,000

500,000Advanced scenarioModerate scenarioNew Policies scenario

2013 2014 2015 2020 2030




5 http://cleantechnica.com/2014/04/08/chinas-renewable-energy-revolution-global-implications/


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the three lower tariffs and CNY 0.02 for thehighest. This amounts to a 7-8% reduction forthe windier sites, and a 3% reduction in thelowest wind zone.

The resistance from the developers is verystrong, as this reduction can make a bigdifference to China’s wind industry that isalready seeing 10-20% of its profits lost tocurtailment, and massive cash flow problemscaused by the long delays in FIT premium

payments since 2011. While both of theseproblems were addressed somewhat last year,they still put much pressure on the industry,and to face another big reduction of this sortcould be devastating.

So, while the original plan was for the tariffsto be set at the end of this year, to take effectas of 30 June next year, it seems that thecontroversy means that it could take somemonths longer. The tariff reduction needs to beseen in the context of the government’s 13thfive year plan, which has large plans for wind

power and a goal for 200 GW by 2020. Theproposed new tariffs will put those targets in

jeopardy.

OFFSHORE WIND DEVELOPMENT

China has an offshore wind development targetof 5 GW by 2015 and 30 GW by 2030. By 2013,the cumulative offshore installed capacity inChina was 428.6 MW, which placed it in thefifth spot behind the U.K., Denmark, Belgiumand Germany.

China’s NEA has been working with the NDRCtariff department for months to determinethe FIT for offshore wind, and the discussionsbetween the two agencies have now beenfinalised: the inter-tidal projects will receivea tariff of CNY 0.75 per kWh while the near-shore tariff was set at CNY 0.85 per kWh.

In the beginning of May 2014, the ShanghaiMunicipal Government announced additionalRE subsidies on top of the FIT given by thecentral government: onshore wind is givenan additional subsidy of CNY 0.1/kWh, whileoffshore wind a boost of CNY 0.2/kWh.

Following this new measure, the ShanghaiOceanic Administration also permitted anew offshore project, the “Shanghai LingamOffshore Project, Phase I-100 MW”. The totalproject capacity will be 200 MW. This is a nearshore project and will be another big projectfor Shanghai after the first two phases of theShanghai Donghai Bridge project.

Currently China has seven offshore projectsunder construction totaling 1,566 MW and

another 3.5 GW that will start construction in2015.

THE GWEO SCENARIOS FOR CHINA

In our previous Outlook, published in 2012, the2020 projections for cumulative capacity were70 GW (Reference), 200 GW (Moderate) and250 GW (Advanced). However – by the endof 2013 China’s total installed capacity hadalready reached 91 GW. 2014 will see Chinacross another milestone; it will have over100 GW of wind power installed by the end

of this year. No single market has seen windpower installations of that scale.

With these developments in mind, thescenarios presented in this report have beenupdated, while the IEA’s New Policy scenarioremains rather pessimistic.

In the New Policies Scenario, the Chinese windenergy market will experience a considerabledecrease in the rate of annual installationsfrom almost 92 GW of new capacity added by

2013 to a total installed capacity of 208 GW by2020, which is just a little over the unofficialconservative Chinese target of 200 GW by2020.

Given the Chinese government’s commitmentto developing its wind resources, the GWEOModerate scenario foresees a realisticcontinuation of wind power growth in China,with annual installations increasing from last

year’s 16 GW to 19 GW by 2020. By 2016, thetotal installed capacity would rise to reach143 GW, and this would grow to 217 GW by2020 and 414 GW by 2030.


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C H A P T ER T I T LE1

As a result, €24 billion would be invested in

Chinese wind development every year by2020. Employment in the sector would growfrom the currently estimated 291,000 jobs toreach close to 319,000 by 2020 and 376,000by 2030.

The GWEO Advanced scenario shows that thewind development in China could go evenfurther. Its most ambitious scenario – theAdvanced Scenario is looking at 145 GW oftotal installed capacity by 2016 and 230 GWby 2020. This would grow to reach almost

500 GW by 2030, with annual markets growingto 33 GW over that period.

This large-scale deployment of wind energywould provide significant economic andenvironmental benefits for one of the fastestindustrializing country with almost 19% of theworld population. By generating 357 TWh ofclean electricity in 2016, wind power wouldstart to make up a significant share of China’soverall power demand, and this would grow to564 TWh by 2020 and as much as 1,307 TWhby 2030.

Such development would also result in close

to €37 billion of investment flowing into theChinese wind sector every year by 2030. Thesector would see the wind sector work forceincrease from the current estimates of 256,000to more than double the jobs at 548,000 by2030.

And, last but not least, exploiting the country’swind resources would significantly improveChina’s carbon emissions balance. By 2015,wind power would help save 173 million tonsof CO every year, and this figure would grow

to 784 million tons by 2030.

However, certain remaining impediments needto be addressed for China’s wind sector to reachits full potential: build-up of grid infrastructureto accommodate ever increasing amountsof wind power in the national electricity grid,which includes building transmission linesfrom the windy but often remote regionsto population and industry centers in thesouth and south-east parts; long-term andstable policy and incentives for wind powerdevelopments; and an end to the delay inpremium payments which has caused cashflow problems for the entire supply chain.

Guangdong wind farm© Greenpeace China


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EASTERN EUROPE/EURASIA

A ccording to the IEA regions, this

group of countries ranges from newEuropean Union members such as the Balticstates, Malta and Cyprus, through Bosniaand Herzegovina, Croatia, Serbia, Slovenia,Romania and Bulgaria and then eastwardsinto Russia and Ukraine, and finally south-eastwards into central Asia, across thecountries that made up the former SovietUnion.

The group covers diverse economies and powersystems. Some countries, such as Turkmenistan

or Azerbaijan, have massive reserves of oil andgas; others, such as Tajikistan and Albaniameet their power needs almost entirely fromhydropower, while some countries have toimport electricity or fuel or both. Howeverthe region’s energy economy is dominated byRussia, which also is the world’s fourth largestpower producer, behind the US, China, and

Japan6.

All these areas have been assessed to someextent for their renewable energy potential,

and much of the vast Eurasian landmass has

excellent wind resources7. To date, the mainwind developments have been in the easternEuropean and Baltic states that becamemembers of the European Union in 20048.These new member states were required toapply the 2001 EU renewables Directive, andtheir accession treaty set national indicativetargets for renewable power production foreach state. They are of course now also boundby the EU’s new legislation for 20% of thebloc’s final energy consumption to come fromrenewable sources, which include a binding

target for each country by 2020.

By 2013 there was significant wind powercapacity installed for example in Romania(2,599.6 MW), Bulgaria (681.1 MW), Croatia(301.8 MW), Cyprus (146.7 MW), Ukraine(371.3 MW) and the Baltic states of Estonia(279.9 MW) and Lithuania (278.4 MW).

Romania, which according to the EU Directivemust meet 24% of its energy demand byrenewables in 2020, had installed 2,599.6 MW

E A S T E R N E U R O P E / E U R A S I A T O T A L W I N D P O W E R C A P A C I T Y I N M W

MW

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000


2013 2014 2015 2020 2030




6 Much of the information in this section is derived from the EBRD’sRenewable Development Initiative (www.ebrdrenewables.com)

7 3-Tier wind map www.3tier.com/en/support/resource-maps/8 Note that some of these countries, such as Poland, are covered in the

OECD Europe section


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of wind power at the end of 2013, up from14 MW in 2009. Romania’s operating windfarms are mainly located in Dobrogea on theBlack Sea coast, which has average wind speedsof 7 m/s at 100m hub heights.

The situation in Bulgaria was consideredpromising through 2013. With a renewableenergy target of 16% under the EU Directive,the country introduced favourable policies topromote renewable energy development, and

wind power installations have been growingconsiderably in recent years, with a total of681 MW operating at the end of 2013. Bulgariaadopted the Law for Energy from RenewableSources in May of 2011, which replaced theformer Law for Renewable and AlternativeEnergy Sources and Biofuels. The new lawstalled the development of the renewableenergy sector. With an amendment introducedin 2012, the FIT term was reduced to 12 years.Further the tariff is fixed for the entire term (12

years) only after construction of the projectis completed; and in September 2012, the

Bulgarian energy regulator SWERC decided tocut tariffs for all existing wind energy projectsby 10%9.

According to the Bulgarian Wind EnergyAssociation, SEWRC has caused a financial andtechnological crisis in the energy sector10. Inlate 2013, to add to the concerns of the windfarm operators and developers new proposalsfrom the Government to impose a 20% fee onincome from wind farms were introduced11. Thefuture of wind power in Bulgaria will depend

on the nature of electricity sector reforms andstable political support.

The Baltic States have also started to developwind power, with 279.9 MW of installedcapacity in Estonia, 278.4 MW in Lithuania and61.9 MW in Latvia at the end of 2013. Underthe new EU Directive, these countries havebinding targets of meeting 25%, 23% and40% respectively of their energy needs with

renewable sources, and they all have significantwind resources, especially along the coastlines,which can go a long way towards achievingtheir goals.

Russia is one of the top producers andconsumers of electric power in the world.Russia’s current electricity generationportfolio is estimated at more than 220 GWinstalled capacity. However renewable energyis not yet at the forefront of Russia’s policy

agenda. Russia produces 68% of its powerfrom thermal power generation and theremaining mostly from large hydro plants andnuclear power.

Russia’s massive reserves of gas, coal and oillead to a low cost of energy, which poses achallenge for the development of renewableenergy sources. However, Russia does havea significant potential for renewable energydevelopment, not least due to its size andgeography. Russia has huge potential forwind power development, according to the

EBRD, with the windiest regions concentratedalong the coastline, in the steppes and in themountains, mainly in the North and West ofthe country. To date, the development of thewind sector has been slow, with only a littleover 15 MW of wind installed.

In January 2009 the government had seta target for renewables to supply 4.5% ofenergy demand by 2020. In a system as largeas Russia’s, this signified an additional 25 GWof new renewable energy based generation.

There were interim targets of 1.5% by 2010,2.5% by 2015 – currently Renewables accountfor less than 1% of the total installed capacity.To add to that almost three years after theannouncement of the 4.5% target, there isstill no functioning regulatory framework atthe national level to make renewable energycommercially viable12.

Ukraine covers a vast landmass, has good windresources and a rapidly developing economy.According to EBRD estimates, over 40% of the

12 RE Policy in Russia: Waking the Green Giant (IFC Russia RE Program, 2011)http://www.ifc.org/wps/wcm/connect/RegProjects_Ext_Content/ifc_external_corporate_site/home-rrep

9 http://www.windpowermonthly.com/news/1150227/Warning-Bulgaria-cuts-wind-farm-tariffs/

10 http://bgwea.org.server14.host.bg/Materials/Save_the_energy_sector/Initiative_Save_the_Energy_Sector_EN.pdf

11 http://bgwea.org.server14.host.bg/Materials/News_Release/RES_Tax_201311/20131213_Open_Letter_BGWEA_EN.pdf


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INDIA

India’s rapidly growing economy and

expanding population make it hungry forelectric power. In spite of significant capacityadditions over the last 20 years, power supplystruggles to keep up with demand. Electricityshortages are common, and a significant partof the population has no access to electricityat all. The EIA projects that India and Chinawill account for about half of global energydemand growth through 2040, with India’senergy demand growing at approximately2.8% per year14.

India’s wind energy installations by July 2014were 21,693 MW out of the total renewablescapacity of 32,424 MW (excluding largehydro). Wind provided almost 67% of thetotal installed capacity of grid-connectedrenewables in the country.

In 2011 the state run National Institute for WindEnergy reassessed India’s wind power potentialas 102,778 MW at 80 metres, up from theearlier estimate of approximate 49,130 MW at50 metres at 2% land availability.

MARKET DEVELOPMENTS

With the reintroduction of the original

Accelerated Depreciation benefit in September2014 (retroactive to 01 April 2014); the Indianmarket is set to see strong installation numbersstarting in 2015.

The other principle support mechanism calledthe Generation Based Incentive (GBI) wasextended up to the end of 12th plan period i.e.31 March 2017. The revised GBI scheme has acap of INR 10 million (approximately €117,000)per MW between the 4th and 10th year of theproject’s operations. Budgetary allocation for

GBI in the current fiscal year (2013-14) was INR8 billion (approximately €94 million).

The Renewable Energy Certificate (REC)scheme (1 REC = 1 MWh) began in February2011. However, due to poor enforcement andmonitoring of the RPO obligation, while thetotal volume of RECs being issued is increasing,the prices have been low, with a majorityof RECs being sold at the floor price. About10.12 million RECs had been issued by theREC Registry as of March 2014. This consistedof 9.9 million non-solar RECs. Wind poweraccounted for over 50% of the total accreditedcapacity of 4,548 MW under the REC Registry15.

INDIA TOTAL WIND POWER CAPACITY IN MW

MW

0

50,000

100,000

150,000


2013 2014 2015 2020 2030




14 http://www.eia.gov/countries/cab.cfm?fips=in15 https://www.recregistryindia.nic.in/index.php/general/publics/

REC_Source_Wise_Breakup


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Annual wind installations fell from over 3 GWin 2011 to 2.3 GW in 2012 to 1.7 GW in 2013.2013 was one of the toughest years for theIndian wind industry since the economicrecession of 2008.

The industry has faced various challengesincluding the withdrawal of accelerateddepreciation benefits, challenges intransmission, scheduling and forecasting,lack of an integrated energy plan among

others which precipitated a significant dropin capacity additions. Though wind poweraccounted for over half of the registeredgeneration capacity under the REC registry,making RECs a widely accepted instrumentand a revenue stream for the project financingcommunity remains a challenge in India,especially with the limited validity of five

years of the REC certificates.

TARGETS

The report of the sub-group for wind power

development appointed by the Ministry ofNew and Renewable Energy to develop theapproach paper for the 12th Plan Period (April2012 to March 2017) has fixed a referencetarget of 15 GW in new capacity additions, andan aspirational target of 25 GW for the nextfive-year period.

However, a National Wind Energy Mission(NWEM) is likely to be announced in 2014. Thiswould introduce long-term plan targets for thewind sector and provide a more stable policy

platform. The approved outlay for 12th plan forNew and Renewable Energy programmes wasINR 33 billion (approximately €387 million),which is almost 3 times that for the 11th five-

year plan period (2007-12).

In addition to streamlining various existingpolicy initiatives, new actions such asthe NWEM are considered essential toaccelerating the pace of deployment ofclean energy technologies. After the recentannouncement of the NWEM, the industryis hopeful of a recovery over 2014-2015. Thestrength of the recovery will be closely linkedto how effectively the NWEM and its contents

can be made operational and how well it isdesigned. If everything goes according toexpectation then during the Indian financial

year 2014-15 wind capacity addition is likelyto cross 2,500 MW.

Finally, over the last two years there has been aplan to look at harvesting India’s large offshorepotential. While not much development isexpected in the near term, after 2020 thiscould add significantly to the Indian wind

market.16

THE GWEO SCENARIOS FOR INDIA

Under the IEA New Policies scenario, India’swind power market would shrink considerablyout to 2020. The result would be a total installedcapacity of 47 GW by 2020 and 83 GW by2030. Wind power would then produce closeto 117 TWh every year by 2020 and 219 TWhby 2030, and help save 70 million tons of COin 2020 and 131 million tons in 2030.

Under the Moderate scenario, the totalinstalled capacity would reach 29 GW by2015, and this would grow to 49 GW by 2020and 125 GW by 2030.The wind industry willsee investments of €6.6 billion per year by2020 and €10.3 billion per year by 2030.Employment in the sector would grow to over86,000 by 2020 and over 145,000 jobs ten

years later.

Nevertheless the GWEO Advanced scenarioshows that the wind development in India

could go much further: by 2020 India couldhave almost 56 GW of wind power in operation,supplying 137 TWh of electricity each year,while employing over 123,000 people in thesector and saving 82 million tonnes of COemissions each year. Investment would reacha level of €8.6 billion per year. By 2030 windpower would generate over 400 TWh per yearand avoid the emission of 243 million tons ofCO each year. Investment would by then havereached a level of €10.5 billion per year.

16 See http://fowind.in


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LATIN AMERICA 17

Latin America has some of the best wind

resources in the world, and wind poweris poised to play a

Global Wind Energy Outlook

Documents

Transcript of Global Wind Energy Outlook