Chinese And American Wind Installations Explodes — But Who Is Number One?
The United States and China have been competing for the title of “Number One” wind energy giant in the world. New figures from Bloomberg New Energy Finance outlining investment numbers from 2014 show that China once again saw more wind energy installations over the year. However, the American Wind Energy Association continues to claim that what really counts is energy generated, placing the US at the top of the pile.
Bloomberg New Energy Finance (BNEF) released global wind energy installation figures for 2014 on Thursday.
US wind energy installations grew six-fold in 2014, reaching 4.7 GW by the end of the year. However, China’s new installation figures outdistanced anyone else’s by a ridiculously large margin. According to BNEF, China’s installations grew 38% on 2013, reaching 20.7 GW for the year — over four times as much as the US, and more than 40% of all new capacity globally. This brings China’s cumulative wind energy capacity up to 96 GW of grid connected capacity.
“2014 was a boom year for China’s wind industry, thanks to developers rushing to complete projects ahead of the looming feed-in-tariff cut,” said Yiyi Zhou, China wind analyst for BNEF. “Most of the new build in 2014 came from domestic wind turbine suppliers, while foreign manufacturers took less than 2% of the market.”
Bloomberg New Energy Finance placed China’s success on the success of a “policy-driven rush to build” before onshore tariffs are lowered, which is expected to take place later this year.
As we’ve covered before, however, the American Wind Energy Association (AWEA) believes that the real measurement should not be installed capacity, but rather “the total amount of electricity … that each country produces from wind and delivers to customers each year.”
James Walker, a member of the AWEA, has written two separate blog posts which each say exactly the same thing — one in November, and one now in January (which may very well be the same post, republished).
With that in mind, the United States takes first place, delivering over 167 billion kWh of wind energy in 2013, over 20% more than China, which delivered just under 138 billion kWh in 2013.
Beyond the Number-One Battle
However, China and the US were not the only countries to install wind energy in 2014.
Germany, Brazil, and India round out the top 5 markets behind China and the US, with 3.2 GW, 2.9 GW, and 2.3 GW respectively — with Germany and Brazil’s figures representing records for those countries.
According to BNEF, “policy drove Germany’s record year,” as wind energy developers aimed to take advantage of a grace period of the outgoing support system, following the announcement of new and stricter regulations.
“This year has seen a couple of special circumstances come together, so it probably isn’t a blueprint for future development,” said David Hostert, European wind analyst for Bloomberg New Energy Finance. “What is remarkable though is that more than 1GW was repowered with new turbines on existing projects. This means making better use of existing wind sites and opening up new opportunities for developers and asset owners in a mature market.”
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Good news like this is always welcome,. I was curious on US total electricity consumption. Total US electricity consumption in 2012 was 4,047 billion kWh. 167B kWh is 4%. That sounds insignificant but at only 10% annual CAGR wind alone could = 100% current US consumption by 2050. The chart from the AWEA shows very roughly 25% annual growth so 10% annually is very doable, given the enormous potential capacity. Woo-hoo! Looking good!
(Math part: 1.1^35 = 28. 28 x 0.04 = 1.12 = 112%).
EIA link here:
http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=2&pid=2&aid=12
And, of course, solar is coming along too.
Doing the same as above for China:
Tot. usage 2012 = 4,467 B kWh, wind = 138 B kWh = 3%. At 10% CAGR = 28 x 0.03 = 84% of 2012 usage. Eyeballing the AWEA chart shows China’s wind growing faster than the US’s 25% so looking good there too!
Obviously, many other factors involved – storage, sunk costs in FF generation, growth in consumption, PV growth, political stupidity, etc., etc., so just rough orders of magnitude.
Nicely put Michael. Even I could understand it.
What is the 28 in your calculation? Is the 3, 3%? Renewables have growth rates in double digits. That means they double in less than 10 years. Right now, solar every 2, wind every 5 or so. If they doubled every 5, in 35 years they would increase by 2 to the power 7. 128X. Thats sufficient to know its likely they will saturate at high market share by 2050. Exactly how much and when? Depends on FF prices and much more. But even if they doubled every ten years, they would be a very significant part of the energy mix. iEA has figured this out. Thats why they say solar will be the dominant source of electricity by 2050.
How do you calculate stupidity? 🙂
Journal of Irreproducible Results
http://www.jir.com
The 28 comes from my original posting calculation that 10% growth for 35 years is approximately 28x increase. Calculated this way. 10% compund annual growth rate (CAGR) = 1.10. To calculate that for 35 years raise 1.10 to the 35th power = 1.1^35 = 28. 28 x 3% = 84% of the total market.
As I stated earlier, this is a very, very rough, ball-park figure. Also very conservative since 10% CAGR is w-a-a-ay below current growth rates. But nothing lasts forever and once you get to 50% of market potential who knows what crazy things can come out of the blue and smack you along side the head.
From Wikipedia
“For the 12 months through October 2014, the electricity produced from wind power in the United States amounted to 178.04 terawatt-hours, or 4.34% of all generated electrical energy.[4]”
Your math is good.
It’s really hard to tell what’s going to happen with growth, especially as volumes go up and subisidies become unsustainable. The lack of PTC in 2013 had a devastating effect on new wind installations in the US, IIRC. Looking at the above chart, Germany had only a few percent growth per year in generation from 2007-2013, but now 2014 was a record year in installations.
http://www.ucsusa.org/assets/images/ce/PTC-Graph-2014.jpg
The 4.7GW for the US is a multiple-fold increase over 2013, but well below the peak in 2012 and even below 2008.
At what point does the PTC no longer matter? Let’s look at the PPA data for wind over a few years.
In 2009 we installed a nice amount of wind with prices running from 4c/kWh to about 11c/kWh.
Now we’re seeing PPAs at 2.5 cents. A 20 year PPA will drop the price about 1.15 cents (2.3c/kWh for the first 10 years of production). Take away the PTC and it’s 3.6 cents, lower than the lowest 2009 price. 3.6 is not much higher than the subsidized 2012 price.
There were PPAs signed for 2 cents in 2014. Just barely over 3 cents/kWh without subsidy.
I don’t know when it stops mattering. But the installation data shows that it does, and that’s all I was pointing out. Growth projections are difficult for this reason.
A lot of early wind install around that time (and even today) was driven by RPS purchases, not competitiveness with FF. So I don’t think 2009 is a good reference point for the future.
But going forward, I absolutely agree that we should be installing a lot of wind at these prices, and not sure what the holdup is. I can only guess that transmitting out of the interior (where wind is <4c/kWh w/o subsidies) brings the cost up too much, and intermittency reduces wind's value to displacing 3c/kWh fuel.
That's a nice chart, BTW.
Where do you get 3c/kWh for NG?
Lazard has a LCOE range for CCNG from 6 to 9 cents.
I didn’t say LCOE of CCNG. I said displacing fuel (though I admit I should have stuck the word ‘mostly’ in there).
If you can’t rely on capacity, then fuel is pretty much all you save with wind. According to NREL, O&M for CCNG doesn’t change much. Wind, even interconnected in a large area like MISO, will dip down to 5% CF during some peak hours (and ‘some’ is enough to justify needing NG backup).
The current price of NG for power generators is $4.22 per 1000 cu ft:
http://www.eia.gov/dnav/ng/ng_pri_sum_a_EPG0_PEU_DMcf_m.htm
That’s roughly $4 per MMBTU, and avg heat rate for NG was ~8000 BTU/kWh in 2012 and dropping, so that’s ~3c/kWh in fuel costs. New CCNG has heat rates under 6000 BTU/kWh, so <2.5c/kWh fuel cost.
Personally, I think 4c/kwh is close enough to 3c/kwh to justify rapid wind buildout if that was the end of the story. But I suspect three things are holding it back:
A) saturation in the interior, which is rather far from major demand areas
B) transmission cost to higher demand areas
C) expectation of PTC renewal is holding back commitments to build right now
Annoyingly, BNEF don’t give the global total – easily the most significant figure. China’s 20.7 GW were “more than 40% of all new capacity globally”. 40% exactly would make the latter 51.75 GW, so round down to 50 GW. The GWEC were predicting 42 GW not long ago, so the market is perking up.
I do beleive the TX legislature (like most) embraces money, and wind farms make money. I’ve been to West TX for a Summer. Wind and sun are about the only thing going for it above ground.
But it has Mrs. Thatcher’s separation of generation and transmission, and a genuinely competitive electricity market. That’s all that is needed today for solar and wind to thrive, in Texas or Chile. Down with silos!