The development of the international wind energy market in the coming years is viewed as very positive by the industry - this is the most important result of the WindEnergy Study 2006, commissioned by the Hamburg Messe und Congress GmbH in the run-up to WindEnergy 2006 – International Trade Fair. For the year 2010, for example, the globally installed power is expected to reach 132,000 MW (at present: 59,000 MW). These figures are complemented by a scenario of the German wind market up to the year 2030. The scenario is based on a survey carried out in December 2005 by the German Wind Energy Institute (DEWI), commissioned with the study, among companies involved in the international wind energy business, asking them for their assessment of the medium-term development of the market and evaluating their answers. The result of the survey signals a more positive long-term assessment than two years ago. The growth forecast up to 2010 published in the WindEnergy Study 2004 can be revised upwards to up to 12%. Based on these figures the global installation by the year 2014 would be around 210,000 MW (Fig. 1).
"The results of the WindEnergy Study are an important source of information for the industry in their further planning", says Dietmar Aulich, Managing Director of the Hamburg Messe und Congress. "We are the only trade fair providing the wind energy industry with data about the development of the global wind energy market in the coming years. Right from the start, the WindEnergy Study has served the companies as a reliable market barometer and has attracted great attention with the media." The results of this 3rd study were now presented in Hamburg in the run-up to the WindEnergy 2006 - International Trade Fair. The leading trade fair for the wind energy industry takes place from 16 to 19 May 2006 in the North German metropolis. More than 400 exhibitors from all over the world are expected.
Market development in the year 2005
With more than 11,000 MW* in newly installed wind turbines world-wide, the annually installed power in 2005 increased by over 35 per cent compared to the year 2004. Remarkable in this context is the market growth outside Europe, which is about 73%, almost five times more than in Europe where an increase of 16% could be noted.
* Due to differences in methodology the end-2005 figures presented in this assessment differ from the global statistics according to GWEC method
This means that world-wide, the installed power increased by an impressive 23% from 47,912 MW in 2004 to 58,934 MW in 2005 (Fig. 1). A large part of the additional growth was contributed by the U.S. market which after several ups and downs soared from 389 MW in 2004 to 2,431 MW in the year 2005 (625 per cent). Because of the U.S. tax credits for wind energy which for once were prolonged in good time, the companies predicted up to 3300 MW newly installed power per year in the USA for the period from 2006 to 2007. The European market will therefore lose some of its dominance over the next few years. In the year 2010 already 41% of the wind turbine capacity installed will be outside Europe, whereas in 2005 this was only 31%.
The European wind market, too, has picked up speed in 2005. With newly installed 6,316 MW the previous record year 2002 in Europe could even be just exceeded. Despite a gradual consolidation of the national onshore market, Germany with 1,808 MW installed power remained the largest market on the continent, followed by Spain with around 1,700 MW. The 4,507 MW of newly installed wind turbines in Europe (without Germany) mean a growth in market volume of about 32% as against the year 2004 (Fig. 2).
Market Development in Germany: Onshore continues to grow, Offshore is delayed
Working on the assumption that today's generally favourable political and economic conditions for the generation of electricity from wind power will not be changed radically, the figures expected for Germany until the year 2010 are approx. 23,700 MW power installed onshore and 1,300 MW offshore (by comparison: at present 18,428 MW onshore and 0 MW offshore). For 2014 the figures are 25,200 MW onshore and 5,600 MW in the areas of the North Sea and Baltic Sea. Based on this forecast, the original aim of the German Federal Government to install 2,000 to 3,000 MW in offshore wind farms by the year 2010 can no longer be realised, because the start of offshore installations will be delayed by at least two years to 2008. The onshore development, on the other hand, is now estimated to be about 8% to 9% higher in the medium term than predicted two years ago (Fig. 3, 4).
One of the results of the survey is a much more conservative estimate of the offshore development in Germany. According to the survey, the development of wind farms at the far-offshore sites typical for Germany will be delayed by at least two years and probably start in the year 2008. The reasons for this delay are technical and administrative problems, but also the fact that due to the booming global market the wind turbine manufacturers are already working at full capacity.
German offshore test site predominantly considered to be very important
In the year 2005 the Offshore Wind Energy Foundation was established in Germany, with the aim, among other things, to operate a test site for multi-megawatt wind turbines in the area of Borkum West. One of the questions in the survey was how important this offshore test site would be for the development of wind energy at sea. Half the companies polled considered the test site as "very important", because it would allow to gather operational experience for the offshore application, 28.9% assessed the test site as "not so important", because it was too late. "Unimportant", because it would not have any influence on the offshore development say 7.9% of those polled, and 13.2% think that the test site could even have a slowing-down effect because developers might wait until experience from the test site was available (Fig. 5).
In 2030, 30 % of German power consumption could be covered by wind energy
The future wind energy market in Germany will consist of the segments development of new onshore areas, replacement of old wind turbines by more modern and larger turbines (repowering) and offshore wind energy use. The consolidation of new installations in Germany taking place since 2003 has developed as expected by the companies and with the cumulated 18,428 MW in 2005 was only 0.7% below the forecast published two years ago. For the years to come, however, the forecasts made by the respondents are more optimistic than previously, which increases the long-term development forecast. Fig. 3, 4 show the development expected until the year 2030. By the end of the period shown, the installed capacity could reach approx. 27,900 MW onshore, which would be about 3,600 MW more than 2004. For the offshore development with expected 30,000 MW by the year 2030, there is only a marginal reduction by 500 MW, due to the delay mentioned before. It is remarkable that because of the delay in the offshore development a market peak could occur in the years 2020 to 2023 (Fig. 3), because it is assumed that in this period also a large portion of the wind turbines onshore from the record years 2001 to 2003 could be replaced (after 20 years' operating time).
Offshore application world-wide
Asked which application of wind energy would be important for their own company and when, the companies' answers concerning the offshore segment showed a tendency over the three WindEnergy studies carried out. In the year 2002, 52.2% stated that Offshore was already important for their company after 2004. In 2004, 44.4% of the respondents still considered Offshore to be important in the present, whereas now only 34.1% are of the same opinion (Fig. 6). A similarly declining importance in the result of the three studies is attached to the offshore market after 2007/2008. A growing importance is seen by the respondents only for the time after 2010. Although in absolute figures the offshore market today is considered to be fairly important, the decline in the assessments of the last few years shows that the booming international market provides a new business segment which today is favoured by the industry.
International market development: new future markets
The companies polled in the survey mentioned altogether 38 different countries interesting as future markets. The companies were asked to list the five most important countries. Then the countries were weighted according to these listings. Fig. 7 shows the resulting 13 most important future markets. As a result, apparently the importance of the markets Germany, Spain, France and Italy will rather decrease in future, whereas a number of new countries are mentioned, which are considered to become important over the next few years (USA, Canada, China, Poland, Portugal, India) (Fig. 7). Among these are countries which were mentioned as interesting in previous surveys, then disappeared completely from the scene and are now re-appearing as interesting markets (such as Canada, Poland, Turkey).
210 000 MW predicted by the year 2014
With predicted market volumes constantly rising each year from 12,800 MW (2006) to up to 22,000 MW (2014), the wind energy industry has excellent and stable development prospects (Fig. 2). If this scenario can be realised as expected, the global capacity installed in wind turbines will reach 210,000 MW by the year 2014 (today 59,000 MW) (Fig. 1). The increasing importance of non-European countries is also reflected in Fig. 8. For Europe a more or less constant market volume is expected in the years 2008 to 2012, whereas in non-European countries a continuous increase of the wind power installed per year is expected in the long run. The expected strong global growth in the years 2005 to 2007 must be attributed to the US market, which with 2,400 to 3,300 MW per year is considered to be very large. For the year 2008, however, the respondents differ in their opinion whether the tax credits in the USA valid until 2007 will be renewed in time to avoid a market slump, as has already happened before. Therefore the assessment for this period is rather cautious.
Opening up new markets: Joint Venture preferred
In the survey, the companies were also asked to answer questions concerning the best way to open up new markets and concerning the main obstacles. As in the survey of 2004, the vast majority of respondents still prefers to open up a foreign market by a joint venture. In the 2006 survey, however, only 59% - compared to 67% in 2004 - are preferring a joint venture for entering foreign markets. 31% would now prefer to establish a foreign subsidiary, compared to 24% two years ago. The opinion that a foreign market could best be served exclusively by exporting is shared by about 9.5% of the respondents, unchanged as against the last survey. Manufacturers and project developers / service providers hardly differ in their answers to all three possibilities (Fig. 9).
When differentiating according to activities, 24% of the manufacturers consider financing risks and an uncertain energy policy the main obstacles for an involvement abroad. Of the project developers/service providers even 32% consider an insufficient infrastructure as the biggest problem, followed by a lack of knowledge about the country (25.4%) and the financing risks (23.8%) (Fig. 10). 9.5% of the project developers now consider an insufficient infrastructure as a larger obstacle than two years ago (3.1%) placing it on the same level as an unstable political situation (9.5%). Among manufacturers, poor infrastructure has now advanced in the ranking from the last position to the third place (20%). A possible unstable political situation in the country to be developed seems to have lost in importance. Among manufacturers the importance of this obstacle went down from 23.8% in the year 2004 to 16%, among project developers/service providers from 12.5% to 9.5%.
Other applications: gaining in importance only after 2010
Today, wind energy is used for generating electricity, onshore and offshore, which is fed into the public supply grid. In the medium and long term, however, there are other possibilities, too, such as using wind energy for water desalination, for saving fuel by integrating wind turbines in small diesel-electric grids, or for the production of hydrogen. In our survey, we therefore asked the companies when they would think that these applications could become interesting as additional market elements. In contrast to the earlier surveys, now all three areas of application are not considered to become important until after 2010. The reason for this statement could be the different marked situation today, which does not make it necessary to think about new areas of application because the order books are well-filled (Fig. 11).
Large wind turbines ready for use after 2007
An important factor for the start of a future application of wind energy at sea is the question when the multi-megawatt wind turbines will be really ready for use. The answers to this question revealed that wind turbines with 2 to 3 MW installed capacity are already considered as fully developed. De facto, today's offshore wind farms are equipped with machines of this size category. The category of 3.1 to 4 MW is not considered to be really ready for use until after 2006. Wind turbines with 4.1 to 5 MW are regarded as fit for application after 2007 and those with 5.1 to 6 MW only after 2008. In these size categories there are already prototypes operating today, so that the estimation of the time when the plants will be ready for serial production harmonises with the current state of development. Turbines with more than 6.1 MW installed capacity are assessed by the vast majority of respondents to be fully developed only after the year 2010. Since for the far-offshore sites the use of the 5-MW category is considered to be necessary, the statement about the time this category will be ready for use corresponds with the statement that the development of offshore wind energy is not likely to start seriously before the year 2008 (Fig. 12).
Summary: Prospects remain excellent, also in the long term
The overall result of the WindEnergy Study 2006 is that the use of wind energy is increasingly shifting from Europe as its focus of application towards the global market. Therefore, wind energy offers excellent, long-term development prospects for the industry. This also means that the utilisation of existing capacities is not seen primarily in the offshore application of wind energy, as was the case two years ago. HMC Managing Director Dietmar Aulich: "Due to the continuously increasing share of wind energy in the electricity generation, the use of wind energy will not only contribute increasingly to a sustainable global environment and resource protection, but can also make an important strategic contribution to helping the user countries reduce their dependence on fossil energy and increase their supply security.These excellent prospects underline the importance of a joint and above all independent and specialised international fair where the wind industry can present their capacities and capabilities." The leading trade fair WindEnergy taking place for the third time in Hamburg is the optimum platform for wind turbine manufacturers and component suppliers, planners, financing institutes, measuring and certification organisations and R&D experts to present their products and services to an international expert public in new, attractive halls.
The WindEnergy - International Trade Fair - will be held from Tuesday, 16 May, to Friday, 19 May 2006 at the Hamburg Messe area (daily opening times from 10am to 6pm). Official international partners of WindEnergy are EWEA, VDMA and DEWI. Vattenfall Europe is the principal sponsor. A number of other international wind energy associations also support the leading trade fair: the American Wind Energy Association (AWEA), the Canadian Wind Energy Association (CanWEA), the Chinese Renewable Energy Industries Association (CREIA), the Indian Wind Turbine Manufacturers Association (IWTMA) as well as the Indian Wind Energy Association (InWEA), the Japanese Wind Power Association (JWPA) and the British Wind Energy Association (BWEA).
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