BWE Industry Report - Wind Industry in Germany 2018

WIND ENERGY AROUND THE

WIND ENERGY AROUND THE WORLD Record growth in Europe stabilises world market High figures in the USA and China, record installations in Europe. Almost as many wind turbines were built around the world in 2017 as in the previous year. In Europe, wind energy has grown more quickly than ever before, replacing coal as the third largest source of electricity. The average cost of wind power is falling rapidly and is now almost on the same level as fossil fuels. A ccording to the global wind energy agency GWEC, the onshore and offshore wind turbines newly installed worldwide last year reached a combined total rated capacity of around 52,500 MW. This is only 2,000 MW less than the previous year, although significantly less than the record year in 2015, which saw a new capacity of almost 64,000 MW. However, 2015 benefited from an unusually large expansion in China – just under 33,000 MW – which has remained a one-off positive outlier even for China. The installation volume in the People’s Republic in 2017 came to a good 19,500 MW. The US, with 7,017 MW, came slightly below the figures of previous years. Both countries are therefore characterised by a high level of consistency when it comes to installations, which is an important signal after the turbulences of the past. World market of wind energy 2017 Rest of world 11 % India 10 % Brazil 4 % 53 GW worldwide China 36 % USA 13 % Happy faces at AJOS wind farm, Kemi. Europe and Turkey 26 % 12 Wind Industry in Germany

Economic report | WIND ENERGY AROUND THE WORLD The fact that the global market dropped only slightly in 2017 was helped by Europe, especially Germany and the United Kingdom, India, and the offshore sector. All of these grew more strongly in 2017 than ever before. In Europe, wind energy accounted for 11.2 percent of electricity generation, overtaking coal as the third largest form of production, as determined by the Agora Energiewende foundation. This makes renewables as a whole the largest source of electricity for the first time, even above coal. Almost all of the power plants newly installed in Europe in 2017 use renewable energy sources – more than half of them are wind turbines, followed by solar power stations. By contrast, the balance of construction and dismantling is negative for all fossil fuels except gas-fired power plants. EU 2020 goals are driving installations According to the World Wind Energy Association (WWEA), however, the record year in Germany and the significant growth in other European countries are partly due to pre-emptive effects. Under pressure from the EU, state governments are converting their subsidy systems from fixed feed-in tariffs to tenders. This leads to high expansion still under the familiar, safe conditions of the fixed feed-in tariffs. Thanks to significant cost reductions, renewable energies, in particular onshore wind energy, are priced at a level that can mostly compete with new fossil fuel plants. On a worldwide weighted average, one kilowatt hour of electricity from onshore wind energy today costs about 5 euro cents (6 US cents), as calculated by the IRENA agency, based on data from thousands of power plant projects. Good locations may even produce significantly better values. Onshore wind thus represents the second most cost-effective green energy behind hydroelectric power (5 US cents), ahead of bioenergy and geothermal energy (7 US cents each). According to IRENA, current auction results show that in 2020, onshore wind power will be available for 3 US cents per kilowatt hour on average. Electricity from fossil fuels already costs 5 US cents on average – and this figure is rising. This does not even include external costs such as damage incurred by CO 2 emissions. Wind farm in Andalusia. For 2018, GWEC expects a significantly higher global expansion of around 61,000 MW. By 2021, the annual installation volume is expected to increase to 75,000 MW. The figures from Make Consult, quoted by major manufacturers like Siemens Gamesa, are a little more modest: the experts from Denmark expect 62,000 MW in 2020. It should also be noted that some countries, particularly in Eastern and Southern Europe, are failing to keep pace. The fewest new installations in 2017 were recorded in Spain, with just 96 MW. According to the EWEA, however, this is set to change before long: in 2017, “final investment decisions” were made in Spain for wind farms amounting to 1 billion euros in cost, corresponding to around 1,200 MW of onshore wind power. World wide wind energy installations (in GW/year) Total on- and offshore in GW 70 60 50 40 30 20 10 0 7 2001 7 2002 8 2003 8 2004 12 2005 15 2006 20 2007 27 2008 38 2009 39 2010 41 2011 GWEC/WWEA 2018 figures Source: WWEA 2018; GWEC 2018, Make Consult 2018 quoted by Siemens Gamesa; diagram by Ahnen&Enkel 45 2012 36 2013 52 2014 64 2015 55 2016 53 2017 2018 2019 75 62 Forecast Make Consult/ GWEC 2020 Wind Industry in Germany 13