Wind continues to blow faster in China and India than the rest of the world as a new report detailing the growth of wind energy across the globe in 2015 suggests that the days of West’s dominance in the industry are now over, thus diverting all attention to the two promising Asian markets.
Before delving deep into “why and how,” let’s take a look at the statistics of wind capacity additions in 2015, which was yet another stellar year for the industry’s growth. The story is pretty simple, according to the Global Wind Energy Council, which says that 2015 was an unprecedented year for the wind energy industry as annual installations crossed the 60 GW mark for the first time in history. The last record was set in 2014 when over 51.7 GW of new capacity was installed globally.
Further, GWEC says, total investments in the clean energy sector in 2015 reached a record $329 billion, up 4% from 2014’s investment of $316 billion and beating the previous record set in 2011 by 3%. The new global total for wind power capacity at the end of 2015 was 432.9 GW, representing cumulative market growth of more than 17%.
Let’s now discuss the “why,” or the driver behind this unprecedented growth. Money, as we all know, does matter in every sphere of life, and so is the case with wind energy. The world now has record, low prices for wind energy, in the vicinity of €40/MWh or below outside the U.S. in some cases, and, reluctantly, countries across the world, including those in the dark continent, are flocking to install wind turbines. This positive development is augmented by the growing mantra around climate change, and, 186 countries in December 2015 struck the landmark Paris agreement on climate change, setting some ambitious targets like having a 100% emissions free power sector by 2050 at the latest.
The last major driver, according to GWEC, is the new policy stability in the U.S., which has signed into law a long-term extension and phase out of the production tax credit, the primary federal policy support for wind energy in the U.S. The start of the longest-ever period of policy stability for the U.S. wind energy, and the potential implications of this go far beyond the U.S. market in terms of company strategies, manufacturing location choices and development of the supply chain.
Seen from another angle, the picture looks totally different though.
The tremendous growth of wind energy in Asia, especially China, is something that experts cannot ignore. The GWEC report puts it in this way: “For the seventh year in a row, Asia was the world’s largest regional market for new wind power development, with capacity additions totaling nearly 33.9 GW. In terms of annual installations China maintained its leadership position. China added 30.8 GW of new capacity in 2015, once again the highest annual number for any country ever. This is almost twice the 2013 figure, when China installed 16 GW of new capacity.”
The Chinese wind market, according to the GWEC report, almost doubled its capacity from 75 GW in 2012 to reach 145 GW by the end of 2015, reinforcing China’s lead in terms of cumulative installed wind power capacity. All observers continue to be surprised by the astonishing track record for growth of the wind sector in China over the last decade. The current pace of growth in the Chinese wind power market may see a slowdown in 2017.
GWEC itself has “often been positively surprised when time and again China’s installation figures surpass expectations.”
At the end of the day, it is Asia again that “will continue to dominate the period from 2016- 2020, capturing at least 50% of the global market, although its dominance may be tempered slightly towards the end of the decade,” according to the report. Other regions may not see such rosy days in terms of wind energy growth though.