The Evolution and Economics of Wind Power

The Evolution and Economics of Wind Power
The Evolution and Economics of Wind Power
The growth in globally installed wind turbine capacity is shown in Figure 5. The most recent annual figures show that at the end of 2013 the total global wind generating capacity was 318,105MW and that during 2013, 35,289MW of new end capacity was added. This represented a fall in the annual rate of growth compared to the preceding four years and the first year in the table that capacity additions had actually fallen, year upon year. As is discussed in the report, much of this fall can be attributed to the US market..
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Chapter 1 - The wind resource and global wind generating capacity

Wind is the movement of air generated by the earth’s rotation and by the heating of the atmosphere by the sun. The wind resulting is both intermittent and unpredictable. The amount of wind energy available varies with position on the globe and some regions have much better resources than others. Wind atlases can help reveal the best resource regions but site measurements are usually necessary to evaluate a particular wind project. Global wind capacity has been growing steadily since the beginning of the century. Early growth was driven by expansion in Europe but towards the end of the first decade of the century the centre of gravity moved away from Europe with growth in both the USA and China growing rapidly. Europe still has the largest wind capacity but this will soon be overtaken by Asia. Offshore wind, however, remains a European phenomenon with virtually all the global capacity still located in European waters.

Chapter 2 - Wind technology and market trends

Modern large wind turbines follow a standard design with a horizontal axis carrying a rotor fixed to the top of a tall tower. This standardization has allowed manufacturers to concentrate on development of key turbine components. A major trend has been a continued increase in turbine size with larger turbines generally more economical than smaller units. This has been accompanied by developments to allow manufacture of longer and lighter blades. Blades and towers are being designed in segments so that they can be more easily transported to difficult sites. There have also been developments in the drive train, particularly the introduction of direct drive and permanent magnet generators that offer greater efficiency of operation. Other important developments have focused on measures to improve the integration of large volumes of wind power into grid systems. All these developments are making higher and higher penetration levels possible. The market, meanwhile, remains largely regional so that locally-based manufacturers often take the major share of each market.

Chapter 3 - The economics of wind power

Wind power is capital intensive with most of the investment required upfront. The largest capital cost component is the turbine itself which can account for between 40% and 80% of the total capital cost of an onshore wind installation. Costs offshore are higher because of the more expensive operating environment and the greater difficulty establishing a foundation so the proportion of capital cost taken by the turbine is generally lower than onshore. Turbine cost fell from 1980 until 2002 when prices started to rise again, peaking in 2009 before falling further. Technological advances and greater overall efficiency are continuing to bring costs down. This is feeding into capital cost trends which are following turbine prices by falling. There are regional variations in capital costs, with costs lower in India and China than in Europe or the USA but regional differences are narrowing as the market becomes more global. With capital cost the dominant component of the cost of energy, the levelized cost of electricity from wind plants is falling too and onshore wind is beginning to compete with other technologies, particularly new coal. There is a growing consensus that onshore wind will reach parity in many parts of the world by the end of the decade, if not before. Offshore wind will take longer but could be competing with the main conventional sources of power by the middle or end of the third decade of the century.

Chapter 4 - Wind prospects

The cost of wind power has continued to fall compared to many other technologies over the past five years and is now approaching the level at which it can compete with conventional technologies. Power from natural gas and coal remains cheaper (without carbon capture and storage) but the steady growth in renewable penetration from both wind and wind power is leading to coal and gas-fired plants operating for less of the time, a factor which adversely affects their economics. On the other hand the low cost of wind power is leading governments to reduce subsidies to wind. By the end of the decade wind power could be the second cheapest source of electricity after natural gas in many markets. Growth of wind power is expected to continue strongly in the major markets of Europe, Asia and North America. Markets in Latin America are advancing more slowly and wind power in Africa remains a rarity.

Key Features/Benefits/Findings/Answered Questions

Key Features of This Report

  • Analysis of wind power generation technology costs, concepts, drivers and components.
  • Assessment of electricity costs for different technologies in terms of the two fundamental yardsticks used for cost comparison, capital cost and the levelized cost of electricity.
  • Insight relating to the most innovative technologies and potential areas of opportunity for manufacturers.
  • Examination of the key wind power generation technologies costs.
  • Identification of the key trends shaping the market, as well as an evaluation of emerging trends that will drive innovation moving forward.

Key Benefits From Reading This Report

  • Realize up to date competitive intelligence through a comprehensive power cost analysis in wind power generation markets.
  • Assess wind power generation costs and analysis – including capital costs and levelized costs.
  • Identify which key trends will offer the greatest growth potential and learn which technology trends are likely to allow greater market impact.
  • Quantify capital and levelized cost trends and how these vary regionally.

Key Findings of This Report

  1. The economically competitive onshore potential in Europe was put at 9,600TWh in 2020 and 27,000TWh in 2030.
  2. China could profitably generate 6,960TWh of wind energy at $75/MWh.
  3. The second largest capacity at the end of 2013 was in the USA where total capacity was 61,091MW but annual additions only amounted to 1,084MW.
  4. Denmark has 12 wind farms and 1,271MW of generating capacity offshore while Germany has 13 wind farms and 520MW.
  5. Vestas which after a difficult two-year period has now consolidated its position as the world’s leading supplier of wind turbines.

Key Questions Answered by this Report

  1. What are the drivers shaping and influencing power plant development in the electricity industry?
  2. What is wind power generation going to cost?
  3. Which wind power generation technology types will be the winners and which the losers in terms of power generated, cost and viability?
  4. Which wind power generation types are likely to find favour with manufacturers moving forward?
  5. Which emerging technologies are gaining in popularity and why?

Who This Report is For

This report is valuable for:

Power utility strategists, energy analysts, research managers, power sector manufacturers, wind power developers, investors in renewables systems and infrastructure, renewable energy developers, energy/power planning managers, energy/power development managers, governmental organisations, system operators, companies investing in renewable power infrastructure and generation, investment banks, infrastructure developers and investors, intergovernmental lenders, energy security analysts

Reasons to buy

  • To utilise in-depth assessment and analysis of the current and future technological and market state of wind power, carried out by an industry expert with 30 years in the power generation industry.
  • Use cutting edge information and data.
  • Use the highest level of research carried out. expert analysis to say what is happening in the market and what will happen next.
  • Have the 'what if' questions answered about new wind technologies.
  • Save time and money by having top quality research done for you at a low cost.

Date / Format / Pages

June, 2014 / PDF / 81