The Renewables Landscape: Wind at the Threshold

Published by: Datamonitor

Published: Apr. 23, 2008 - 21 Pages

Table of Contents

DATAMONITOR VIEW

CATALYST

SUMMARY

SOURCES

ANALYSIS

Historically, large hydro has been the only commercially mature renewable technology; however, today, wind is at the threshold

The renewable energy industry is growing rapidly on the back of technological advancements, political will and subsidies

Wind power has become one of the broadest-based renewables technologies, with installations in more than 70 countries

Global installed wind capacity is experiencing significant growth, with the majority of new capacity now outside Europe

The growth of global wind energy generation has outpaced that of total global energy generation 10-fold

Wind is often considered an unreliable generation technology, yet wind turbine load factors have been very consistent, albeit low

While wind energy may be variable, it need not be unpredictable

In a market that is increasingly characterized by the rise of the portfolio investor, utilities with renewable energy targets are building wind portfolios through acquisitions

Among the major European utilities, the top 25 wind asset owners account for 20% of the total global installed wind capacity

The rise of the portfolio investor: institutional investors and IPPs own a significant percentage of the total installed wind capacity

Booming demand means that the global wind energy industry must now overcome significant challenges

Supply chain shortages have sparked industry restructuring

Policies have had a major impact upon the speed and extent of renewable energy development, despite many design and implementation problems

At present, at least 64 countries have a national target for renewable energy supply, including all 27 EU countries

The RES-E directive sparked the adaptation of legal frameworks in all EU countries, and several countries outside Europe

The EC intends to support the 2020 targets via a harmonized 'target-and-trade' system

Countries with an existing share of final energy supply that meets or exceeds the draft directive's 'interim trajectory' will benefit most

The directive is designed to support renewable power in the EU, but could, instead, undermine existing local support schemes

Utilities have fallen behind the curve on renewable generation and are now tasked with applying successful strategies to tap major global growth opportunities

Utilities have fallen behind the curve on renewable generation and are only now beginning to catch up

Strong global growth will continue on the back of technology maturity, policy incentives and heightened investor appetite

Utilities have rapidly introduced global wind generation strategies by growing wind portfolios, mostly through acquisition

APPENDIX

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Disclaimer

List of Figures

Figure 1: Global renewable electricity capacity reached 207GW in 2006

Figure 2: in 2006, the world's total renewable installed capacity accounted for less than one third of the total large hydro capacity and less than 5% of the world's total power generation capacity

Figure 3: Global installed wind power capacity increased by an estimated 21GW in 2007

Figure 4: Germany led the way in total installed wind energy capacity in 2007

Figure 5: The US led the way in new installed wind energy capacity in 2007

Figure 6: European wind generation accounted for just 3% (98TWh) of the total energy generated in 2007 (3,444TWh)

Figure 7: EU wind energy generation has grown inline with capacity, suggesting consistent wind patterns throughout the EU wind fleet

Figure 8: From 2003 to 2005, load factors across the world's wind fleets remained largely in the 18%−25% range, and never exceeded a 4.5 standard deviation

Figure 9: Despite heightened green credentials, utilities' installed wind capacity remains a modest part of their overall generation mix

Figure 10: A combination of heightened M&A activity and organic new build is keeping European wind energy ownership in a state of flux

Figure 11: The challenges facing the industry are borne from five main causes

Figure 12: The EU's national targets for renewables' share of electricity production typically ranges from 5%-30%, but reaches 3.6% in Hungary and 78% Austria.

Figure 13: No less than 60 countries (37 developed and transition countries and 23 developing countries) have some form of policy to promote renewable power generation

Figure 14: Using 2005 as a baseline, each Member State will be required to increase their share of final energy supply.

Figure 15: Onshore and offshore wind will experience varying degrees of growth over different time frames

Figure 16: Utilities can access three main types of entry strategies to scale their wind portfolios globally

Abstract

Introduction

Utility companies have largely fallen behind the curve on renewable generation and are now increasingly applying global strategies to leverage major renewable growth opportunities at a time of record valuations in the sector. The Renewables Landscape - Wind at the Threshold is a report that analyses the current wind power generation landscape across key European and world markets.

Scope

• Data concerning the uptake of the five main renewable technologies, the development of wind capacities/generation/load factors, and leading countries
• Awareness of the wind asset ownership competitive landscape and the reasons why large asset owners are increasingly integrating along the value chain
• Knowledge of the various support policies and national renewables targets and how recent proposals might undermine existing local support schemes
• Insight as to why utilities have fallen behind the curve on renewable generation and how they have recently scaled their wind portfolios through M&A

Report Highlights

• The renewable energy industry is growing rapidly on the back of technological advancements, political will and subsidies, with the majority of new capacity now coming from outside of Europe. Crucially, record investment and growth has been underpinned by extremely consistent and predictable, albeit low, wind turbine power generation performances.
• Utilities’ wind asset ownership remains a modest part of their overall mix whereas institutional investors and IPPs own a significant share of the world's wind assets. Heightened M&A activity and organic new build is keeping EU wind energy ownership in a state of flux at a time when the industry is restructuring to overcome significant challenges.
• Policies have had a major impact on the speed and extent of renewable energy development, despite many design and implementation problems. Of particular importance is the proposed 2020 EC ‘target-and-trade’ system which intends to support renewable power in the EU but which could instead undermine existing European wind power installations.

Reasons to Purchase

• Understand how the booming wind industry is structured and how it is undergoing significant transformation in the face of major global challenges
• Evaluate the opportunities for wind energy using key wind power capacity, generation, and load factor trends across Europe and the rest of the world
• Predict opportunities in wind power generation using this report’s summary of the policies, competitive landscape, market drivers and leading actors

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