51 GW of Wind Projects Installed Globally in 2018_ Report

In 2018, nearly 51.3 GW of new wind energy projects were installed globally, 4 percent less than the previous year, says Global Wind Report 2018. In the last five years, wind installations have been above the 50 GW mark every year, and cumulative installations reached 591 GW at the end of 2018.

Source: GWEC Global Wind Report 2018

China was the largest onshore market with 21.2 GW of wind installations, followed by the United States which installed 7.6 GW of new wind projects. Europe witnessed a 32 percent decrease in new wind capacity addition, installing 9 GW of onshore wind power throughout the year. It was mainly due to the lower volumes of wind installations in Germany and the United Kingdom.

Apart from these frontrunners, Germany, India, and Brazil installed 2.4 GW, 2.2 GW, and 1.9 GW respectively. Market-based mechanisms such as auctions, tenders, and green certificates were the main drivers of growth in these countries. For instance, 35 percent of new installations were based on market-based mechanisms.

At 2.2 GW, India’s total wind installations fell behind when compared to 2017, when the country installed 4 GW. The main reason for slowdown has been attributed to various execution challenges, removal of incentives and switching procurement method to reverse auctions from feed-in tariffs.

Global Wind Energy Council’s predicts that mature markets in Asia, Europe, and North America will continue with stable volumes. However, growth will come from developing wind energy markets in Africa, Middle East, Latin America, and South-East Asia.

For example, Mexico added 900 MW of total wind energy in 2018 compared to 500 MW in 2017. Similarly, Africa/Middle East also grew to 0.9 GW with Egypt and Kenya as leading markets with 380 MW and 310 MW of new installations respectively.

Source: GWEC Global Wind Report 2018

However, when it comes to offshore wind, the market remained stagnant, installing 4.5 GW, the same as last year. The cumulative installations in the offshore wind market stood at 23 GW, four percent of the total cumulative installations. China remained a leader in this segment as well, installing 1.8 GW, followed by the United Kingdom with 1.3 GW of new offshore wind installations. Offshore wind installations accounted for eight percent of the total wind installations in 2018.

The report suggests that offshore market is set to grow in the next five years as the share of new offshore installations is expected to reach 23 percent in 2023 from the 8 percent that was recorded in 2018. The first large scale offshore installation is expected to be in North America by 2022-23.

Meanwhile, talking of India’s offshore wind market, the country announced its first Expression of Interest in this segment in 2018. Draft auction rules were released during January 2019. India’s offshore potential is located off the coast of Gujarat and Tamil Nadu.

Mercom had previously reported about the MNRE’s draft rules that have been framed to regulate the award of leases that belong to the central government over to the developers to build offshore wind energy projects. The offshore wind projects will be set up along the coastline of India up to 200 nautical miles within the exclusive economic zone.

In June 2018, the MNRE had announced short-term installation target of 5 GW offshore wind capacity by 2022 and long-term installation target of 30 GW offshore wind projects by 2030. This new set of rules will help the government develop the offshore wind power sector in India and replicate the success of the onshore wind power sector in the country.

India will drive the volume of new installations with the execution of the scheduled auctions in the Asian market other than China, the report predicts.

Source: GWEC Global Wind Report 2018

The report estimates that the global wind market will install 300 GW of new capacity over the next five years.

The primary drivers of growth for the wind sector will be the near-term governmental support, such as auction/ tender programs and renewable targets. However, opportunities are also growing in the form of corporate power purchase agreement (PPA) as wind energy is becoming more cost-competitive. Countries like the U.S., Mexico, and Brazil have seen considerable volume addition through bilateral agreements and PPAs, but it is too early to predict the installations driven by commercial opportunities.

Source: GWEC Global Wind Report 2018

Mercom had reported in December 2018 that since the inception of reverse bidding in India’s wind sector in February 2017, approximately 10 GW of wind power projects had been auctioned in the country.

The report has listed three key drivers – revisions in business models, corporate sourcing, and rising focus on the value for growth during the energy transition.

“The main driver of transformation is wind’s emergence as the clear winner on price against fossil fuels and nuclear. Auctions in markets from Brazil to India to Taiwan to Germany continue to throw up ultra-competitive prices, while PPA markets in other geographies show the same trend”, said Ben Backwell, CEO of Global Wind Energy Council.

Recently, Mercom reported that four wind project developers- Ostro Energy (300 MW), Adani Renewables (250 MW), Srijan Energy Systems (150 MW), and Powerica Limited (50.60 MW), have quoted the lowest tariff of ₹2.82 (~$0.040)/kWh in the auction held by SECI for 1,200 MW of ISTS-connected wind projects issued under Tranche-VI.