Europe Drags Down Global 2018 Wind Energy Installations

Wind installation data for 2018 has been steadily rolling in from wind turbine OEMs and various trade associations. The Global Wind Energy Council (GWEC) announced preliminary figures for annual installations in 2018, with an estimated 51.3 GW of new capacity added, a drop of 3.6% from 53.2 GW in 2017. 

The drop is symptomatic of an industry being challenged by a gradual transition to more competitive policy support structures, such as power contract auctions and tender systems, and increasing pressure from lower cost solar. As opposed to previous feed-in-tariff (FIT) policies, these more competitive, market-oriented policies force wind plant owners and wind turbine OEMs to compete against each other, driving down awarded costs for projects. The plus side is that these policies have driven down the cost of wind energy at the expense of lowering the overall installation rates. 

The European market has been hit the hardest since it has the most markets that have transitioned in recent years from FIT policies to competitive auctions. Initial figures released by WindEurope, the European market’s main wind association, show that installations fell to 11.7 GW, which is the lowest level since 2011 and a drop of 32% from 2017. (Data found at Windpower Monthly).

Two of Europe’s largest markets, Germany and the UK, saw big falls in new commissioned capacity due to problems with the auction system in Germany and removal of all onshore wind from the UK’s Contracts for Difference (CfD) policies. With incentives only going to offshore, onshore installations have plummeted. Germany’s capacity was half of what it was in 2017 and the UK saw almost no capacity besides offshore. 

Opposite Trend from 2018

The solar industry in Europe saw a nearly opposite installation trend, with a 36% increase of 8 GW installed in 2018, up from 5.9 GW in 2017. The plummeting cost of solar energy has placed solar as an increasingly competitive power generation source against wind power in markets where solar investments historically were  vastly outspent by wind capacity. In Germany, auctions that pit solar against wind are seeing solar emerge the victor. In February 2019, the result of one of these mixed auctions saw 36 solar projects selected totaling 201 MW capacity and only one wind farm bid, which failed to meet price requirements. Whether adjustments to various auction systems will reverse the trend is unknown. 

Wind Industry Outside of Europe

Outside of Europe, the global wind industry saw more positive results in 2018. These included newer markets such as Latin America, Southeast Asia, and Africa, which were responsible for 10% of new onshore installations in 2018 (4.8 GW). Stable growth continued for the larger established markets. China again installed a remarkable amount of new capacity with another 21.2 GW, followed by the US with 7.6 GW, India with 2.1 GW, Brazil with 1.9 GW, and Mexico with 929 MW.

Total cumulative installed wind capacity reached 591 GW at the end of 2018, a growth of 9.6% compared to the end of 2017. Total installed onshore wind grew by 9% while total offshore wind grew by 20% and reached 23 GW. How these 2018 installations rates are tied to the fortunes or pitfalls of the many wind turbine OEMs is among the insights compiled by Guidehouse Insights for its annual wind turbine OEM assessment, which is currently underway. For capacity addition information from 2017, refer to Guidehouse Insights' World Wind Energy Market Update 2018 report.