Energize Weekly, March 27, 2019
Global wind power generation grew by 50.2 gigawatts (GW) in 2018, a 4 percent increase over 2017, according to energy consultant Wood Mackenzie’s Global Wind Power Market Outlook Update: Q1 2019 report.
It was the third biggest year for wind installations, and the pace was set by China, with a 37 percent year-on-year increase, as European projects waned with the expiration of legacy subsidy programs.
“This significant level of investment seen last year was largely driven by a resurgence in China,” Luke Lewandowski, Wood Mackenzie Power & Renewables research director, said in a statement. “The lifting of red warnings in key Northern provinces in China unlocked development.” The red alert system was set up to limit wind development in areas with inadequate transmission infrastructure.
Europe saw declines in activity across the board as subsidy programs were phased out. Northern Europe posted a 26 percent decline compared with 2017, and Western Europe was down 36 percent. The hardest hit countries were the United Kingdom, Finland and Germany.
Latin America is also looking at “a challenging start” for 2019 as development stalled in Mexico, and in Columbia’s first wind auction, no contracts were awarded. Still, the region has a 10-year compounded growth rate of better than 10 percent, Wood Mackenzie said.
“The cancellation of Mexico’s long-term auction and a critical HVDC [transmission] line stymie growth potential puts a greater emphasis on the maturation of developing markets, several of which lack a schedule for the next round of auctions,” Lewandowski said.
The United States is set to see a surge in activity as developers move to get projects into the pipeline before the federal wind Production Tax Credit (PTC) is phased out. The value of the credit is being progressively stepped down and will end in 2024.
Wood Mackenzie said it expects the U.S. wind industry to “shift fully into execution mode” from 2019 to 2021, and that 48 percent of the capacity the consultant projects in its 10-year outlook will come online during that four-year period.
Looking forward, the combination of India’s aggressive renewable energy targets and robust growth in the offshore sector are set to drive a 10-year compounded growth rate of 12 percent a year in the Asia Pacific region, excluding China.
“Cumulative offshore capacity in the region will reach almost 19 GW from just 111 MW (megawatts) at the end of 2018, led by growth in Japan, Taiwan and South Korea,” Lewandowski said. “China’s market recovery will continue, as additional provinces in the north work to lift red warnings, supporting 250 GW of capacity through to 2028.”
“The annual share of offshore wind in China will average 18 percent of annual capacity from 2022 to 2028, as a result of onshore grid constraints and saturation,” added Lewandowski.
As Europe transitions to auction markets, the region is projected to average 20 GW of capacity annually, with 25 percent offshore, as commercial and industrial companies become important buyers.
