Global Wind Energy
Today's Wind Energy Industry
In the last 20 years, wind energy has gone from an emerging source of fuel to a significant energy resource in many countries. Generation costs have fallen by 50% over the last 15 years, moving progressively towards the cost of conventional energy sources in many markets. Wind energy continues to become more price competitive, as traditional fuel prices escalate and further technical efficiencies are achieved.
Cumulative wind power capacity worldwide grew from 4,500MW to just over 120,800MW between 1995 and 2008, according to statistics released by the Global Wind Energy Council, with 27,100MW installed in 2008 alone.
Wind power is now established as an energy source in over 50 countries worldwide, and generates an increasing amount towards the world's overall electricity supply. Emerging Energy Research forecasts that wind energy will acount for approximately 3% of global electricity generation by 2015.
As at the end of 2008, the top five global wind energy markets accounted for almost three quarters of the world's total installed capacity. The US has overtaken Germany as the world's dominant wind energy producer, installing a record 8,358MW in 2008 alone. China's total capacity doubled in 2008 for the fourth year in a row, taking its installed capacity to 12,210MW and moving it to number four in the global rankings.
Europe also continues to be one of the world's leading wind energy regions, with Germany and Spain ranked the second and third largest wind markets in the world with total installed capacities of 23,903MW and 16,754MW respectively, as at December 2008.
Australia currently has 1,306MW of installed wind energy capacity, equivalent to around 1% of the global market.
Key factors driving the rapid development of wind energy
There are three key factors driving the growth of renewable energy and wind energy in particular:
- recognition of the desire to address human-induced climate change through a reduction of greenhouse gas emissions
- need to reduce the dependence on, and depletion, of non-renewable resources
- desire by many countries to diversify the sources of their energy supply
Concern for environment and climate change
Concerns about the environment and the threat of global warming continue to play an increasingly important role in global politics. Many governments around the world have committed to the promotion of renewable energy, in many cases, via legislated incentive schemes. These incentives typically provide wind farms with priority access to the electricity grid and/or some form of economic benefit such as a price premium.
An overview of these incentive schemes is described below and in the Regulatory Overview Section.
A renewable resource
The benefits of wind as a source of energy include:
- safety
- inexhaustability
- cleanliness
- local availability
especially when compared with often held concerns regarding the depletion of, and dependence on traditional non-renewable fuel sources.
Security of energy supply
Security of energy supply is becoming an increasingly significant issue for many countries, particularly with the level and volatility of fossil fuel prices having increased considerably in recent years. With expectations that the long term global demand for energy will outstrip supply, countries which rely significantly on imported sources of energy (e.g. Spain) view the contribution of wind energy generated on home ground to be of national strategic importance.
For many countries, when compared to traditional energy fuels (such as coal or gas), wind energy could be one of the largest energy resources available in their own territory. For example, in Europe, the exploitable onshore wind resources available for the EU-25 (European Union comprising 25 member countries, prior to accession of 10 countries in 2004) is conservatively estimated at 600,000 GWh and the offshore wind resource at up to 3,000,000 GWh which in aggregate is estimated to exceed the entire electricity consumption for the EU-15 (European Union comprising 15 member countries, prior to accession of 10 countries in 2004).
Wind energy as a solution
Wind energy is recognised as a cost competitive and large scale renewable energy source in many countries.
Technological improvements and economies of scale resulting from a growth in the volumes of wind turbines being produced, has reduced the cost of producing one kilowatt hour of electricity from wind by 80% over the last 25 years. Cost reductions are expected to continue at an average rate of 3% to 5% per annum.
In response, many countries have introduced legislated programmes to encourage and promote renewable energy.
Legislated incentive schemes for wind energy
Many governments around the world are committed to reducing greenhouse gas emissions in order to address their potential impact on climate change. To facilitate this, many governments have implemented legislation to provide renewable energy generators, such as wind farms, with the mechanisms necessary to ensure the continued development of renewable energy sources.
In general, there are two main types of legislated mechanisms. A third important scheme, which is a variant of the fixed quantity system, is the Production Tax Credit:
- Fixed price system - adopted in countries such as Denmark, Germany, Spain and France
- Fixed quantity system - adopted in countries such as the United Kingdom and Australia
- Production Tax Credit - adopted in the United States of America at a federal level
Fixed price system
Under a fixed price system, wind farms are paid a fixed price (or a fixed premium to the electricity pool price) for every unit of electricity produced, with the extra cost borne by electricity consumers or taxpayers.
Fixed quantity system
Fixed quantity systems typically involve a decision by governments on the targeted level of renewable electricity to be produced during a certain period, while market forces are left to establish the technology (eg. wind, solar, biomass) and the price. In the UK, for example, the target level of renewable electricity is set at 10.4% of total electricity sourced by suppliers in the UK for 2010/11).
Production Tax Credit
The Production Tax Credit ("PTC") system is unique to the US and can be viewed as a variant of the fixed price system. It offers tax credits to wind farm owners which are worth approximately US$19 per MWh (CPI adjusted) and are available for the first 10 years of operations.
Wind turbine technology has improved considerably over recent years with significant increases in wind turbine generation capacity and improved efficiency in capturing energy as a result of taller turbines in better locations with enhanced mechanical components. Multiple types and sizes of turbines are now available to suit a wide range of wind resource characteristics and landscapes.
Harnessing wind energy and turning it into electricity
Wind energy is captured and turned into electricity by a wind turbine. The rotors (or blades) of a modern wind turbine typically consist of three blades. The energy captured by the blades steadily rotating is transferred to an electrical generator. The generator, together with a gearbox, transformer and other control equipment, is housed in what is known as the 'nacelle' of the turbine, as shown in the chart below. In current day turbines, mechanical noise has been practically eliminated and aerodynamic noise has been vastly reduced.
Although a wind turbine is designed to operate continuously across a range of wind speeds, it does not always generate electricity at its rated capacity (e.g. a 1.65 MW turbine has a rated capacity of 1.65MW while its actual generation of electricity at any given time may be less than 1.65MW). A wind turbine normally does not generate electricity if the wind speed is below a certain level, the "cut-in speed". As wind speed increases, the wind turbine will gradually increase its electricity output until it reaches its rated capacity. When the wind speed rises to a certain threshold, the "cut-out speed", the wind turbine will shut down in order to protect itself from the forces exerted by high wind conditions. This output characteristic is diagrammatically illustrated in below and is called the "Power Curve".
A modern wind turbine is designed to generate high quality, network compatible electricity for more than 20 years, with remote monitoring and relatively low maintenance.
There have been three major trends in the development of wind turbines in recent years:
- Larger capacity and taller turbines
- Increased efficiency
- Decreased investment costs
Design efforts are currently focused on addressing grid compatibility, further improvements to acoustic performance and the emerging offshore market.
