Market Opportunity
Clean Edge projects wind power (new installation capital costs) will expand from $30.1 billion in 2007 to $83.4 billion in 2017. Last year's global wind power installations reached a record 20,000 MW, equivalent to 20 large-size 1 GW conventional power plants. (Clean Edge, “Clean Energy Trends 2008”, March 2008)
Climate change worries, growing support from world governments, rising oil prices and ongoing energy security concerns combined to fuel another record-setting year of investment in the renewable energy and energy efficiency industries in 2007, according to "Global Trends in Sustainable Energy Investment 2008" published July 2008 by New Energy Finance for the UN Environment Programme’s (UNEP) Sustainable Energy Finance Initiative. New Energy Finance reports $148 billion in new funding entered the sustainable energy sector globally last year, up 60% from 2006.
Wind is playing a leading role in the growing alternative energy marketplace. RBC Capital Markets analyst Stuart Bush asserts that wind industry is attractive for investors because the price for generating electricity from wind turbines makes it one of the cheapest renewable energies. With the price of coal and natural gas soaring, demand for wind turbines is skyrocketing. "Wind energy is a renewable energy source where you sink the capital upfront and are effectively prepaying for electricity," said Bush. "You don’t pay anything for fuel going forward, so you eliminate the fossil-fuel price increase." (Forbes, “Wind Sees Green”, July 1, 2008)
One in every three countries now generates a portion of its electricity from wind, with 13 countries each exceeding 1,000 megawatts of installed wind electricity-generating capacity. (Earth Policy Institute, “Global Wind Power Capacity Reaches 100,000 Megawatts”, March 2008).
The Global Wind Energy Council (GWEC) reports 2007 marked another banner year for the wind industry, with 20 GW of new installations. The world’s total installations increased by 27% to reach over 94 GW. Europe remains the leading market for wind energy with over 57 GW of wind energy at the end of 2007, representing 61% of the global total. In 2007, European wind capacity grew by 8.5 GW, over 17% compared to the previous year.
The European Wind Energy Association (EWEA) offers a snapshot of Europe’s thriving wind industry in its report “Pure Power” published March 2008.
Summary of the wind energy market in the EU-27 in 2007
• 56 GW installed capacity, including 1.08 GW offshore
• Annual installations of 8.5 GW, including 0.2 GW offshore
• Electricity production of 119 TWh, including 4 TWh offshore
• Meeting 3.7% of total EU electricity demand
• 40.3% of the annual new electricity generating capacity
• 55% of annual net increase in installed electricity generating capacity
• 7.3% of total installed electricity generating capacity
• Providing power equivalent to the needs of 30 million average EU households (15% of EU households)
• Avoiding 91 Mt of CO2 – equivalent to taking 46 million cars off the road (21% of the EU car fleet) and equal to 26% of the EU-15’s Kyoto obligation
• Annual avoided fuel cost of €3.9 billion
• Annual avoided CO2 costs of approximately €2 billion
• Annual investments in wind turbines of €11.3 bn
• Total life-time avoided fuel costs of wind power capacity installed in 2007 of €16 billion (assuming fuel prices equivalent to $90 a barrel of oil)
• Total life-time avoided CO2 cost of wind power capacity installed in 2007 of €6.6 billion (assuming CO2 price of €25/t)
• European manufacturers have a 75% share of the global market for wind turbines (2006)
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