12 october 2016

Global wind capacity set to hit 500GW by year end

Madeleine Cuff, businessGreen, 12 October 2016

New figures show installation rate continues to grow at same pace as 2015, with Germany, India and Brazil leading the way

Global wind capacity is set to hit 500GW by the end of 2016, accounting for around five per cent of global power demand, according to new data released this week by the World Wind Energy Association (WWEA).

Capacity had reached 454GW in June 2016, with 21GW added in the first six months of 2016 – the same installation rate as the first half of 2015, WWEA said. A further 40GW is expected to become operational over the final six months of the year, taking total installed capacity past the 500GW milestone by year end.

Stefan Gsänger, secretary general of the WWEA, said wind power is showing "robust" growth in 2016, but warned that the increased use of energy auctions by governments is squeezing smaller players out of the market.

"With the expected 500GW installed wind capacity by end of this year, wind power will contribute five per cent to the global power supply," he said in a statement. "A major reason of concern is, however, the global trend towards auctions which is endangering the driving role of small and medium-sized players. It has already slowed down most of the European markets, so that Europe has already lost its long-term leadership to Asia."

Advocates of energy or capacity auctions argue that they foster competition between developers, helping to push down the cost of clean energy. But critics argue that they favour large companies with significant balance sheets which can take on the risk associated with auctions.

Germany, India, Brazil, China, Spain and the US remain the major players in the global wind industry, accounting for 67 per cent of global capacity, according to WWEA. Germany, India, Brazil and China all installed more than 1GW of new capacity in the first half of 2016, with China streaking ahead with 10GW of new installations.

The news comes amid fears that installation rates could slow if a recent slump in renewables investment does not pick up. A report released this week by Bloomberg New Energy Finance revealed that investment in renewable energy and energy-smart technologies reached $42.4bn between July and September this year – a 43 per cent fall year on year, and the weakest quarterly performance since 2013. The analyst noted that the falling cost of renewables meant developers had to spend less money to get the same amount of capacity, but acknowledged that investment slowdown experienced so far this year was "worrying".

It also comes as news from Germany highlighted some of the challenges the wind industry could face as it supplies a larger part of the energy mix, after leaked documents suggested the government is planning to halve its original target for expanding its wind farms in the north of the country because it is struggling to deliver sufficient grid capacity to transfer the power to population centres in the south.

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