Page 6 - AfrElec Week 12

AfrElec COMMENTARY AfrElec
Global wind growth hit by COVID-19
The wind sector’s expansion in 2019 makes it well placed to take advantage of any post-crisis bounce in renewables investment, writes Richard Lockhart
GLOBAL
WHAT:
The global wind sector added 60.4GW of new capacity in 2019
WHY:
Wind finally proved its competitiveness on pricing terms
WHAT NEXT:
Offshore posted the fastest growth, while wind is well placed to receive potential post-crisis green investment
THE global wind sector added 60.4 GW of new capacity in 2019, 19% more than 2018 installa- tions, with 6.1 GW added offshore.
This was the second-largest expansion in history, with wind now having “unequivocally established itself as a cost-competitive energy source worldwide,” according to a report from the Global Wind Energy Council (GWEC).
China and US remained the world’s largest onshore markets, accounting for 60% of the 54.3 GW of new onshore capacity.
Offshore posted the fastest growth at 26%, raising its market share over 10% for the first time.
However, this growth could be in danger because of coronavirus (COVID-19), with a potential 4.9 GW of new capacity delayed because of the current market disruption, Wood Mackenzie said in a note.
The wind power industry is facing “a crisis unlike anything it’s ever seen,” with many new auctions and tenders set to be cancelled in 2020.
Growth drivers
The GWEC report found that market-based mechanisms were the main driver of growth in 2019, with 40 GW of wind capacity auctioned off. This accounted for two-thirds of total new capacity and was twice the capacity auctioned off in 2018.
“In 2019, we continued to see more and more countries transitioning away from feed-in tariffs (FiTs) to market-based mechanisms, as well as continued growth in the corporate PPA market,” said GWEC strategy director Feng Zhao.
The report found that the five largest growth markets – China, the US, the UK, India and Spain – had accounted for 70% of new additions.
In terms of cumulative installations, China, US, Germany, India and Spain collectively made up 73% of current global capacity of 651 GW.
“The wind energy sector is continuing to see consistent growth, after having unequivocally established itself as a cost-competitive energy source worldwide. Established market players such as China and the US accounted for nearly 60%; however, we see emerging markets in regions such as Southeast Asia, Latin America and Africa playing an increasingly important
role in the years to come, while offshore wind is also becoming a significant growth driver,” said GWEC CEO Ben Backwell.
Regions
On a regional basis, Asia-Pacific was the global leader for new wind installations in 2019, add- ing 28.1 GW of new onshore capacity, more than half of the global additions, and 2.5 GW offshore. China added 26.2 GW onshore and India 2.4 GW.
Southeast Asia could be a major growth centre in the coming years, with Thailand and Vietnam set to grow, if the right market frame- works and government policies are in place, the report said.
Although Germany saw growth stall, expan- sion in Spain, Sweden and Greece drove a 30% rise in European onshore installations.
Emerging onshore markets in Africa, the Middle East, Latin America and Southeast Asia showed moderate growth in 2019, adding a combined 4.5 GW.
One disappointing region was Africa and the Middle East, which saw new installations fall by 2.6% year on year to 944 MW.
However, current total capacity of 6 GW is
set to expand by 10.9 GW by 2024, driven by China, US,
installations in South Africa (3.5 GW), Egypt (1.8 GW), Morocco (1.2 GW) and Saudi Arabia (1.2 GW).
Germany, India and Spain collectively
Offshore, 2019 was the sector’s best ever year,
with 6.1 GW added globally, representing 26%
growth on 2018’s total capacity of 23 GW. Off-
shore with 29.1 GW now represents 10% of the make up 73% total global market.
China was the offshore leader with 2.3 GW of new wind farms, although the UK is still the largest cumulative market, with 9.7 GW.
The future
Looking ahead, the GWEC forecasts that 355 GW of wind capacity will be added by 2024, 50 GW offshore, an average of 71 GW per year. Off- shore is set to expand its market share to 20% from 10% in 2019.
The trade body said this could be done by governments and regulators looking beyond simple metrics such as LCOE, and to foster
of current global capacity of 651GW
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w w w . N E W S B A S E . c o m Week 12 26•March•2020