Wind Power Increase in 2008 Exceeds 10-year Average Growth Rate

by Janet L. Sawin/ May 7, 2009

Global wind capacity increased an estimated 27,051 megawatts in 2008, ending the year at 120,798 megawatts.¹ (See Figures 1 and 2.) With cumulative installations up almost 29 percent, the growth rate exceeded the annual average of the past decade.² Wind power accounted for 42 percent of new capacity additions in the United States (second only to natural gas for the fourth year running) and for 36 percent of new installations in Europe.³ The wind now generates more than 1.5 percent of the world's electricity, up from 0.1 percent in 1997.⁴ Around the world, 80 countries are now using wind power on a commercial basis.⁵

The United States again led in new installations, surpassing Germany to rank first in cumulative capacity and electricity generation from the wind.⁶ (See Figure 3.) U.S. capacity increased by 50 percent—8,358 megawatts—to 25,170 megawatts at year's end.⁷ Additions would have been even greater if not for delayed extension of the federal Production Tax Credit, which caused developers to postpone an estimated 4,000 megawatts of further additions to 2009.⁸ Texas is the leading state in the country for wind, with more than double the capacity of runner-up Iowa and more wind capacity than all but five countries.⁹

Asia accounted for almost one third of global wind capacity additions.¹⁰ China ranked second after the United States, with approximately 6,300 megawatts installed during 2008, doubling the nation's cumulative wind capacity for the fourth year in a row.¹¹ In April 2008, the Chinese government increased its 2010 wind target from 5,000 to 10,000 megawatts—yet this revised goal was quickly surpassed, and more than 12,200 megawatts were in place by the end of the year.¹² Because market growth is racing ahead of the national plan, China continues to face problems aligning grid planning with wind energy development.¹³ The Chinese Renewable Energy Industry Association projects that wind capacity will reach 50,000 megawatts by 2015.¹⁴

India ranked third in wind capacity additions in 2008, with 1,800 megawatts of new wind added, and is now fifth worldwide for cumulative capacity—after the United States, Germany, Spain, and China—with a total of 9,645 megawatts.¹⁵ The southern state of Tamil Nadu accounts for 44 percent of the nation's wind capacity, but other states are starting to catch up as they adopt new policy measures that support development of wind power.¹⁶

Europe added 8,877 megawatts to end the year with 65,946 megawatts of wind capacity—55 percent of the global total.¹⁷ For the first time, wind power represented Europe's leading source of new electric capacity, well ahead of natural gas at 6,939 megawatts and coal at 763 megawatts.¹⁸ By the end of 2008, wind power accounted for 8 percent of European Union (EU) power capacity, enough to generate about 4.2 percent of the region's electricity in a normal wind year.¹⁹

Germany continues to lead the region, but new installations were down slightly from 2007 (by an estimated 2 megawatts (less than 1 percent) from 2007) and nearly 50 percent off their 2002 record installations; 1,665 megawatts were added in 2008, bringing the total to 23,903.²⁰ Wind power now meets at least 40 percent of electricity demand in three German states and 7.5 percent of national net electricity demand.²¹ Despite the slowdown, the German Wind Energy Institute projects that wind power could meet 31 percent of the nation's electricity demand by 2030.²² Many of Germany's best onshore wind sites now have turbines on them, and the next wave of expansion in the country will likely be in its North Sea territorial waters.²³

Spain placed fourth worldwide for new installations in 2008, adding 1,609 megawatts.²⁴ With a total of approximately 16,740 megawatts, Spain now ranks third after the United States and Germany for cumulative wind power capacity.²⁵ Wind power provided more than 11 percent of Spain's electricity last year and, according to Spanish utility Endesa, drove down electricity prices during 2008.²⁶ A recent study found that the wind industry contributes more to Spain's gross domestic product than any other industry.²⁷ Spain, Germany, and Denmark—long the primary markets in Europe—accounted for less than 40 percent of new installations in 2008, compared with 60 percent the previous year.²⁸ Other major European players in 2008 included Italy (1,010 megawatts added), France (950), the United Kingdom (836), and Portugal (712).²⁹

Elsewhere, Australia added 482 megawatts, increasing its cumulative capacity by 58 percent.³⁰ Brazil was the only country in Latin America to add a significant amount of new wind capacity, with 94 megawatts installed in 2008.³¹ Egypt, Morocco, and Tunisia added a combined total of 99 megawatts, and Iran installed 17 megawatts.³² Turkey installed its largest wind farm to date, with more than 42 megawatts of capacity, and joined the growing list of nations with megawatt-class wind turbine manufacturers.³³

Most of the world's wind capacity is operating onshore, but a growing share is spinning offshore; the vast majority of these installations are in Europe. Nine EU countries had operational offshore wind farms at the end of 2008, up from five at the beginning of the year.³⁴ An estimated 357 megawatts were added last year, for a total of 1,486 megawatts offshore in Europe.³⁵ More than 30,822 megawatts of offshore capacity are under construction or in the planning stages in Europe, with completion expected by 2015.³⁶

The global market for wind turbine installations in 2008 was worth about $47.5 billion, an increase of approximately 42 percent over 2007.³⁷ Globally, more than 400,000 people are employed in the wind industry.³⁸ But a significant number of jobs could be lost, particularly in the United States, due to project financing difficulties brought about by the global economic crisis.³⁹ By early 2009, financing for new projects and orders for turbines and components had slowed significantly.⁴⁰

Although near-term expectations for the industry are gloomy, medium- and longer-term prospects are bright. Turbine prices are expected to fall as a result of the economic crisis, thanks to declining materials and construction costs.⁴¹ And several large utilities and developers are continuing to move ahead, with at least three big offshore projects planned for northern Europe, for example.⁴² Economic stimulus packages in the United States and elsewhere are targeting wind power and other renewables.⁴³ China's government reacted to the world financial crisis by identifying wind energy development as a key economic growth area.⁴⁴

The Global Wind Energy Council projects that 332,000 megawatts of wind capacity will be installed by 2013.⁴⁵ BTM Consult, a Danish research firm, expects that global wind power installations could account for almost 6 percent of the world's electricity generation by 2017.⁴⁶

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