Wind Energy Market
Currently, wind energy is relatively cheap, technically more mature, and holds a sizable market share in the total renewable energy (RE) industry. The last decade has proven to be eventful for wind energy, with an exponential growth in wind installations. For example, in 2014, annual installations of wind power crossed the 50 gigawatt (GW) mark for the first time.
Total investments in the clean energy sector reached a high of $310 billion in 2014, with the global wind sector recording an 11 percent increase in investments ($99.5 billion). This marked a significant increase compared to $80.3 billion in 2013 and $80.9 billion in 2012.
However, in 2015, the market lost momentum with a slight dip due to economic conditions and a shift toward fossil fuel as oil and gas prices dropped.
The wind energy market is expected to record positive growth in 2016. Plans for more installations by 2020 can be anticipated. This is imminent as projects planned in 2014 and 2015 are likely to be executed in remaining months of the year. Historically, the total global installed wind power capacity at the end of 2014 was 369.6 GW, representing a cumulative market growth rate of more than 16 percent. By the end of 2014, the number of countries with more than 1,000 megawatt (MW) installed capacity was 24—16 in Europe; 4 in Asia-Pacific (China, India, Japan, and Australia); 3 in North America (Canada, Mexico, and the United States) and 1 in Latin America (Brazil).
Until 2020, Asia is expected to continue dominating the wind energy market, followed by Europe.
APAC Wind Energy Market: Opportunities and Challenges
While Asia is the fastest growing region for wind energy, developed nations such as the United States and European countries have had a strong head start due to government support, conducive regulations, and supporting infrastructure. Nonetheless, emerging economies in Asia, particularly India and China, have increased their wind energy generation from 1.7 GW in 2000 to 137 GW in 2014. In 2014, China became the first country to cross the 100,000 MW mark in wind power installations.
Asia’s wind energy market is largely driven by China that aims at generating an installed capacity of 200 GW by 2020. The two main challenges faced by China’s wind energy market stem from:
- Grid curtailment and integration: Much of the harnessed wind energy in China is produced in large wind farms far away from the load centers
- Adjustment of feed-in tariff (FIT) for wind energy: China’s low electricity prices yield almost zero or low profits.
China has rich wind power resources and the capability to build wind power facilities to meet its energy demand. However, it needs to improve its wind power grid integration, speed up the construction of large offshore and onshore wind power sites, and enhance the role of wind power as a means of clean energy supply. More importantly, financing mechanisms must be conducive for private investments in this market.
In 2014, India had wind energy installations of 21,693 MW that provided about 67% of the total installed capacity of grid-connected renewables in the country. The industry has faced various challenges such as lack of an integrated energy plan that resulted in a significant drop in capacity additions. However, with the new government’s initiatives on renewables, the Indian wind energy market has set a target of 25 GW by 2017.
Other leading Asian countries in wind energy are Japan, Taiwan, and Australia. Overall, Asia is likely to continue to grow at a progressive pace and lead the global wind energy market. The high economic growth rates, increasing awareness and emphasis on clean energy and energy security further support the growth of the regional market. However, cost constraints, need for innovation, and low electricity prices pose key challenges that need to be addressed in many developing countries in Asia to strengthen its position as a global wind energy leader.
Innovations: High-Altitude Wind Turbine
Electricity generated from existing wind power technologies, both onshore and offshore, is highly variable at different timescales: hourly, daily, or seasonally. This variability challenges the incorporation of large amounts of wind power into a grid system as there must be a balance between electricity generation and consumption to maintain grid stability.
High-altitude wind provides an enormous reservoir of energy, with the second biggest energy flow after solar radiation. It is also highly exploitable as the wind speed is higher and more consistent than onshore and offshore winds.
Balloon technology is a term commonly used in the market, and it is used to harness high-altitude wind energy. Balloon technology consists of a very lightweight turbine, lifted by a balloon or blimp to higher altitudes and kept in place by tethers that transmit the generated power. This technology has two main advantages: low production and installation costs and easy deployability.
Airborne or flying wind turbines do not need huge investments in terms of production of equipment or installation unlike mill-like foundations. Given their flexibility and faster installation, these turbines can be rapidly deployed to various locations and used to supply power to remote communities and off-grid industries as well as for disaster relief. Flying wind turbines can also be used to support the power needs for telecommunication and mobile services or weather monitoring.