Global Growth – the Story at China Wind Power 2011

China once again hosted its largest wind power expo, China Wind 2011, surpassing last year’s exhibition with the number of companies and the exhibition floor space increasing by 50%. Not surprisingly for an event in Beijing, the China market continued to be a major focus, but this year there was much more sense of a global market with increasing interest in new emerging markets, in particular Latin America.

Major messages at the exhibition conference:

  • Despite global economic challenges, wind is a growth industry. Steve Sawyer, the Executive Director of the Global Wind Energy Council, pointed to 24.1% growth in the worldwide industry in 2010, and an average growth rate of 28% per year over the previous 14 years.
  • Policy support is crucial, and China’s is strikingly consistent. Both Chinese and international speakers agreed that a key to China’s steady growth in wind power has been clear goals and long-term, consistent policy support. Adnan Amin, the Director-General of the International Renewable Energy Agency (IRENA), described China’s Five Year Plan as “a clear roadmap for the future.” China is not the only country with such support, with Europe providing a strong enabling environment, and Brazil now also encouraging industry growth.
  • China’s industry is maturing. Installed wind power capacity grew by 64% in 2010 to 42 GW. This is rapid, but down from the doubling that had occurred in recent years, reflecting the much larger size of the base. China now has the world’s largest installed capacity. The government and industry continue to focus on grid integration challenges (a major topic the previous year, as well), but are also looking to a more diversified wind development model. This includes not only major “wind bases,” but looking at wind supply closer to demand centers, including offshore wind.
  • The development of greater offshore wind is a global story. Not only are the Chinese looking to more offshore opportunities, but offshore continues to be a growth area in the more mature European market.
  • Latin America and the rest of Asia are new market opportunities. Brazil is rapidly developing wind manufacturing capacity and looking to both a domestic and a Latin American market. Asia as a whole is growing. Beyond China, Korea is developing, and many expect new opportunities in Japan. The total Asian market is expected to surpass the European market in 2012.
  • The US is perhaps the most challenging market. Speakers mentioned the inconsistency of federal policy support for the wind industry, but noted that many States are a bright spot in the US picture with renewable energy portfolio standards and growing international cooperation.

Speakers told of a number of challenges, the most consistent of which was that wind is perceived as more expensive than it actually is. Speakers from multiple countries discussed projects that are competitive in the market with coal, natural gas and nuclear today. They also noted the long-term price stability of wind projects, where power costs over the length of the project are much easier to project and are stable, in comparison to volatile fossil fuels.

Sawyer mentioned two potential price risks – the first is commodity costs if the global economy recovers. The wind industry has benefited from low prices for commodity inputs in recent years. The second is the risk of trade barriers. Growth and competition around the world have driven down the costs of wind equipment and installation, a trend that could be impeded by market barriers.

Image courtesy of Jim Hammer and licensed for reuse under this Creative Commons License.