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2005 was a great year for wind power worldwide

by Jerome a Paris Sun Feb 26th, 2006 at 09:13:33 AM EST

click on this graph (and the others below) for larger version

As the graph above shows, 2005 was a banner year for wind power, with a 43% increase over 2004 in terms of new capacity built during the year.


The other good news is that the boom was spread more evenly around the world this year, with Asia becoming an increasingly significant market:

The North American market jumps sharply, following the devastating consequences of Congress diddling around with the PTC support mechanism in 2004, which pretty much killed the market for the year. 2005 has been a record year in both the USA and in Canada, with the USA becoming, as I predicted a few months back (USA to become world leader in wind power in 2005) the largest market this year.

The PTC mechanism has now thankfully been extended till end-2007, which gives the industry another 2 good years (3,000 MW are expected to be built this year in the USA, and even more in 2007), but the stop-and-go nature of the renewal of that law has created massive headaches for the industry (what kind of industrial capacity do you invest in to produce 2,000 MW one year, 5,00 MW the next, and 2,500 MW the year after?), with consequences worldwide (delays, quality problems, and losses for the manufacturers) and for the USA (an understandable reluctance by manufacturers to build industrial capacity in the USA, where it might stay idle half the time).

In this industry like others, good government matters - and smart regulations make or break an industry. Right now, wind turbine manufacturing is in Denmark, Germany, Spain, all countries with consistent policies - and India.

India is the surprising leader in this sector from the emerging world, and it even boasts a world-class manufacturer, Suzlon, but China is not far behind and windpower is likely to enjoy massive development in that country in the coming years.

I've written about the sector regularly (see the links at the end of the diary), but I'd like to state again a few things, for the record:

Wind is increasingly price-competitive

The numbers above, based on my own calculations but using mostly public data, show that wind is still a tad more expensive than the baseload energies we are using in the West: nuclear, coal and gas, and thus it still requires some support mechanisms, but that does not take into account the following:

  • nuclear is cheap in France because it was financed at sovereign interest rates. That's the only thing that can male nuclear competitive: public long term funding. As it were, I personally think that it is a smart thing to do, and the State should be in the business of running nuclear plants - and should be the only one to do it. But private sector nuclear plants would likely come up with a price in the 5-7c/kWh range at best;

  • coal is cheap because the cost of cleaning up the coal and of carbon emissions is still ony very partially incorporated in that cost. Impose stringent environmental standards in coal production, transport and burning, and make the sector pay for its carbon emissions, and you add at least 4c/kWh to the cost of that electricity, and you end up in the same range as nuclear, i.e. 6-7c/kWh;

  • gas, at current natural prices (7c/mbtu today after an unexpectedly mild winter in the US, down from 15c/mbtu in December, but up from 2-3c/kWh when all the gas-fired plants were built a few years ago) is simply not competitive, as it adds 3-4c/kWh. Again, 6-7c/kWh production price.

Thus, wind power is, in reality, the cheapest power source today. It's only because coal and nuclear get massive subsidies that they are still cheaper and that wind needs support in turn to be competitive.

In addition to these considerations:

  • wind power creates more jobs per kWh than other power sources, and these jobs are well paying manufacturing jobs and/or jobs situated within local communities (operations and maintenance);

  • wind power requires no imports from politically nasty countries. Today, the technology is to a large extent manufactured in Europe, and it can easily be brought into the US (and any other country that cares to develop its capacities) once a stable regulatory framework is put in place;

  • wind power sustains local communities. It brings income (land leases for the farmers whose lands are used - and which, remember, can still be used for farming apart from the few acres needed for access roads and the turbines themselves, local taxes, and local jobs). Managed smartly, as in Spain, it can bring manufacturing jobs to a number of places;

  • it has very few drawbacks. If you avoid particularly scenic areas, and bird migratory corridors, wind farms do no damage to the environment, bring tourism and, once installed, are very much appreciated by the local population.

If there is one cause that should be wholeheartedly supported by the progressives, this is it. Jobs, manufacturing competence, protection of the environment, support for local communities, and an end to dependence on nasty regimes around the world, it has no drawbacks. So I hope that, for once, this thread will not end up being dominated by those that say that it kills birds or that it is ugly.

See the first comments below on (i) my links to the sector and (ii) some links on bird mortality.

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Also corssposted on dKos for your recommends: http://www.dailykos.com/story/2006/2/26/84614/3727

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Feb 26th, 2006 at 09:19:00 AM EST
On birds:


Wind Power - Impacts on Wildlife and Government Responsibilities for Regulating Development and Protecting Wildlife (pd) from the (US) GAO.

This diary summarises a few scientific studies and quotes the Royal Society for the Protection of Birds on the topic: Wind power: birds, landscapes and availability (I)

Other discussions on birds, with various sources:
http://www.dailykos.com/...
http://www.dailykos.com/...
http://www.dailykos.com/...
http://www.dailykos.com/...

The conclusion is that, while the wind farm in Altamont, Ca has killed a number of raptors, and care should be taken in all cases to site windfarms away from migratory pathes and other potentially hazardous locations for birds, the overall impact of wind farms on bird is extremely low.

And on my job and earlier diaries on the industry:


Energy - some good news (for once)
Don Quixote meets Wall Street - financing wind farms
The future of power generation
Wind power: birds, landscapes and availability (I)
comment on PTC
Something to take your mind off indictments: Windfarm blogging
Wind power now CHEAPER for US retail consumers
USA to become world leader in wind power in 2005

All of these are based on my direct involvement with the industry, which I finance as a project financier (read the first "Don Quixote" diary for a detailed description of my job). My bank has now financed more than 5,000 MW of wind power.

As project financiers, we have to make sure that the projects we fund are sound over the long term, and we thus have no incentive to downplay risks or nasty side effects, quite the opposite: we want to identify them in order to eliminate them or mitigate them properly.



In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Feb 26th, 2006 at 09:21:58 AM EST
[ Parent ]
Even if the wind turbine bird strike "problem" wasn't the result of bad statistics, at least you could do something about it--like have loudspeakers to scare them off, or something like that. But bird strikes ARE a problem for airplanes.

"Love is on the ground at Denver International Airport--among rabbits, at least, and that's a dangerous situation for aircraft. The wascally wabbits, as Elmer Fudd might say, attract raptors that can cause millions of dollars of damage when the birds of prey collide with aircraft.

Last year, animal strikes at DIA caused more than $4 million in damage to commercial aircraft. Bird strikes with aircraft are estimated to cost civil aviation more than $300 million a year nationally. According to the U.S. committee's website, more than 6,300 bird strikes were reported for U.S. civil aircraft in 2004."

http://www.denverpost.com/business/ci_3545309

by asdf on Sun Feb 26th, 2006 at 09:10:23 PM EST
[ Parent ]
Aren't birdstrikes a problem if they get into the turbines and other moving parts? No such problem for wind turbines.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Feb 27th, 2006 at 03:14:56 AM EST
[ Parent ]
It's good that you provided links to the windmill impacts on wildlife. I will soon post a diary entry of my own, which discusses alternative fuel/power sources and shortly describes an actualy story from my hometown, related to your story (good story btw!).

Be careful! Is it classified?
by darin (dkaloyanov[at]gmail.com) on Mon Feb 27th, 2006 at 05:12:08 PM EST
[ Parent ]
I love these statistics so much that I used to go by my own to the websites of the european and american wind association (ewea and awea) to get them.

Now I can proudly wait them in this very excellent site :)

Great diary.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Sun Feb 26th, 2006 at 10:43:13 AM EST
By the way. You explain it hundred of times better than the webpages of the associations (awe and ewea). Have you ever thought of posting them there in exchange for.. well.. money or exposure or something?

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Sun Feb 26th, 2006 at 10:44:47 AM EST
[ Parent ]
Thanks Jerome, this diary is magnificent. In our city there is a proposal for a wind-power-site so your bundled info is very welcome to reenforce argumentation.

But I'm very curious about :

Managed smartly, as in Spain, it can bring manufacturing jobs to a number of places

Can you point me where to find info about this?

The struggle of man against tyranny is the struggle of memory against forgetting.(Kundera)
by Elco B (elcob at scarlet dot be) on Sun Feb 26th, 2006 at 11:17:22 AM EST
The interesting thing about wind, hydro etc is that the raw material is free.

If you can sell enough of your production forward at today's price you can finance the capital expenditure.

This is achievable by putting a legal wrapper around the project and repaying the capital not in cash but in the form of energy at today's price. The legl wrapper for this is not a company or even a trust, but a new UK corporate vehicle called an LLP.

Such "asset-based" finance (based upon asset ownership as opposed to borrowing which is "deficit-based" finance but usually "asset-backed" by a claim over the borrower*s assets) completely changes the economics.

It gives investors a new asset class, and allows developers to fund interest-free - in fact, who needs developers anyway? No reason why a community couldn't use the model, as the Danes pretty much do.

Best Regards

Chris Cook

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sun Feb 26th, 2006 at 07:17:49 PM EST
This is not asset finance (where your main security is a valuable asset, like a plane or a ship), but project finance. See the diary linked to above entitled "Don Quixote and Wall Street". You don't necessarily need a LLP to finance such projects, a normal legal structure can work fine.

A large chunk of the wind sector is indeed financed that way.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Feb 27th, 2006 at 01:19:33 AM EST
[ Parent ]
You beat me to it... I was preparing a diary on wind power 2005, too. But yours is much wider in scope. So I only add various observations to it:

  • GWEC and its European source EWEA are rather sloppy with statistics - they missed a big up-correction of the 2004 number for Spain for example. (So like Kcurie, I check national sites myself too.) At any rate,

  • Germany's 1808 MW and Spain's real 1524 MW is still much more per capita than the US 2450 MW. For Germany, while new installations have fallen for the third year straight, it is noteworthy that it hasn't fallen deeper, despite already significant buildup and political headwind from the conservatives - but with the SPD putting up a surprisingly strong defense for the former Red-Green energy policy, next year there may even be an increase again. In Spain, I note a record 7008 MW actual production (20% of consumption) was achieved one hour two weeks ago.

  • But I think the most noteworthy in Europe is Portugal, a country with the fourth of Spain's population, which doubled its capacity by adding 500 MW. Possibly an effect of the more clear policies of the Socialist government that replaced the right-wing one (called deceptively Social Democrats) left behind by Barroso.

  • India is not so surprising as it has long been on the global top five, and most big manufacturers like Vestas and Enercon have local factories. What is noteworthy that development there has accelerated, beyond a national plan that foresaw a more linear rather than exponential growth.

  • Having upgraded its E-112 turbine model (the number in the name of turbines is usually the draft design rotor diameter in meters), German manufacturer Enercon erected [pdf!] the currently most powerful turbine off-shore near Cuxhafen/Germany (and then still in 2005, two more on-shore). The first five of the type had a 4.5 MW capacity, the units of the new version can do 6MW (Presently 1.5-2 MW are typical), but the 'head' of the turbines is designed to bear the weight of longer blades - unthinkable just a few years ago, 10 MW turbines could become reality in a few years!

* A further advantage of wind power is the speed of projecting and installation. Another is that their manufacturing is less sensitive to resource limitations than say photovoltaic solar cells: what they require in large amounts is steel, what may cause (not insurmountable) problems is supply of semiconductors for power electronics.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Mon Feb 27th, 2006 at 04:02:20 AM EST
A few corrections on Portugal:

 - all mainstream political parties have been supportive of wind power in Portugal. The rationale for Portugal is very convincing (they are further away from their Kyoto targets than any other EU country, they import 85% of their primary energy, they ennjoy strong wind resources and vast areas of barren land).

 - The support framework for wind energy has always been positive but was greatly improved by a new law passed in January of February 2005 that greatly removed long-term tariff uncertainty. Not sure whether the new government was already in office at the time.

 - The new government has launched a tender process last fall to allocate additional generation licences.  If anything, the complex and senseless rules of the tender have added confusion and limited attractiveness of the country for a number of industry players.  Not really good governance.

To sum up, although Portugal has made good progress, it will be difficult to reach their stated objective of 3,750MW (mostly due to, as is the case in many countries, limitations in the transmission networks.)

Not sure that the cost of transmission upgrades is reflected in Jérôme's statistics, nor the recent 20%-odd increase in turbine prices (expected to continue at a similar rate this year).

However, I concur that wind power (when installed at windy sites, that is not in Germany) is not obviously more expensive than other technologies, especially when taking into account externalities and recent incresae in cost of fossil fuels.

'La fin désastreuse a répondu aux moyens indignes' Germain Tillion

by Rom on Mon Feb 27th, 2006 at 06:30:26 AM EST
[ Parent ]
Thanks for the correction of my speculation and added background.

The support framework for wind energy has always been positive but was greatly improved by a new law passed in January of February 2005 that greatly removed long-term tariff uncertainty. Not sure whether the new government was already in office at the time.

You are right - elections were held 20 February 2005, the law was enacted 16 February. (This was one of the points where I wanted to check on my memory before posting my pre-empted diary. )

it will be difficult to reach their stated objective of 3,750MW

Hm. I don't know about what plans are there to address the grid capacity problems, but the goal was raised by the new government first to 4,400 MW then to 5,100 MW (by 2010) - 1000 MW is built end of 2005, another 2,300 MW awarded, and your criticism concerns the tendering of a further 1800 MW in two tranches.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Mon Feb 27th, 2006 at 07:27:56 AM EST
[ Parent ]
OK, I thought the 1800MW would get us to 3700MW, I did not know they were already there. Overall, I must concurr that they have done a lot so far and that the goals and commitment to go even further are firmly there.

'La fin désastreuse a répondu aux moyens indignes' Germain Tillion
by Rom on Mon Feb 27th, 2006 at 12:32:57 PM EST
[ Parent ]
You mean a single turbine can output 10mW? The standart turbines are about 500kW... I guess my info is outdated, or we are talking about some big windmills here :)

Be careful! Is it classified?
by darin (dkaloyanov[at]gmail.com) on Mon Feb 27th, 2006 at 06:40:07 PM EST
[ Parent ]
Turbine size is indeed developing at a fast place, so if your info is a few years old, indeed outdated. For the current state of affairs, for example in Germany, 1049 turbines with 1807.77 MW vere erected in 2005 - an average of 1723 kW per turbine. On the other hand, it is also common that countries new to wind power start with smaller turbines.

However, the E-112 is indeed rather big - it was the first built of the 5-MW class, intended mainly for off-shore farms. Currently, this class has two other (also German) entrants: the Multibrid M-5000 and the REpower 5M, both rated at exactly 5 MW. Industry leader Vestas is also developing such a machine, the V120, for 4.5 MW.

Actually, these numbers wouldn't look that dramatic if one remembers that single 3-4 MW test units were built in the eighties and early nineties in Germany, the USA and Sweden. However, those had many serious problems - for example Germany's GROVIAN was heavily damaged by a storm. But for example the first E-112 (which I pictured) runs without major problems for three and a half years now.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Mon Feb 27th, 2006 at 06:59:28 PM EST
[ Parent ]
Some good news from another field of renewable energy.

Supported by a more generous feed-in law since early 2004, German homeowners and some large-scale developers (the latter installing thousands of solar panels on rooftops, former rubbish dumps, highway noise barriers and such) started a solar-panel-buying stampede. The key to the success is that solar panels are connected to the grid, and the utility has to pay a fixed price for surplus electricity fed into it.

A year ago, 2004 new installations were estimated at 363 MW. A few months ago, that was up-corrected to 450 MW (more than total capacity at the end of 2003). A few weeks ago, another up-correction to 500 MW - while the first estimate [pdf, in German!] for 2005, despite worldwide feedstock supply problems caused by the German boom, is of at least 600 MW.

The total capacity at the end of 2005 was around 1500 MW, getting ahead of Japan for the first time - more than the wind power capacity of Britain or the Netherlands! Most of this capacity covers around 200,000 roofs.

On the other hand, due to day/night, seasons and weather, the average output in Germany is only about a ninth of maximum capacity (for wind, it is a fourth to fifth). For 2005, the first estimate is of just above 1 billion kWh (or 1 TWh) electricity produced - 0.2% of German consumption.

I note that Germany also has a solar-thermal boom - another 100,000 rooftop heating modules were installed last year, makes 800,000 in total (with 4,700 MW thermal power).

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Mon Feb 27th, 2006 at 04:35:13 AM EST


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