Spain's wind power market, which trailed Germany by a narrow margin in 2004, is expected to emerge in 2005 as Europe's largest, and to remain so through 2010, according to a new study by Emerging Energy Research (EER), a Cambridge, MA-based research and advisory company.
Cambridge, MA, April 2005 - Spain's wind power market, which trailed Germany by a narrow margin in 2004, is expected to emerge in 2005 as Europe's largest, and to remain so through 2010, according to a new study by Emerging Energy Research (EER), a Cambridge, MA-based research and advisory company.
For the past five years, Europe's wind power capacity has been led by Germany with boom years from 2001 to 2003. Spain's rise to the top represents a significant shift in Europe's wind market, contributing to a number of trends that include growing utility participation in wind power and marked shifts in wind turbine market share.
Spain added 1,931 MW of wind power in 2004 compared to Germany's 2,042 MW, but the saturating German market is expected to decline to 1,500 MW in 2005 while Spain is expected to add 1,800 MW. These and other findings are found in EER's newest study of wind power growth -- European Wind Power Markets and Strategies 2004-2010.
"Demand for wind power in Europe is broadening significantly," says William W. Ambrose, president of EER. "As the market for wind slows in Germany and Denmark, several other markets in Europe are growing quickly to fill the vacuum, led by Spain but followed by a growing number of markets entering the 500 MW per annum club over the next five years, including the UK, Italy, France, and Portugal."
European Wind Market To See Slow But Steady Growth
Europe's annual wind capacity additions are expected to grow at a modest pace, from 5,761 MW in 2004 to 6,276 MW in 2010, according to EER, with a slight dip in 2005-2006 as the market continues to transition. New offshore projects and increased repowering of existing wind plants will help spur new growth.
While most new wind power capacity will be built on landed sites, EER's study predicts that by 2010, offshore projects will account for nearly one-third of the European wind power market. The UK will lead the charge offshore, followed by Germany, Denmark, Sweden, the Netherlands, and Belgium.
Spanish Utilities Play a Bigger Role in European Market
Regulatory policies in Germany and Denmark encouraged small-scale wind farm development financed largely by private investors, but as growth shifts to Spain, the UK, Italy and Portugal, utilities and wind-based independent power producers (IPPs) are increasing their roles in the industry. Utility ownership of wind plants is expected to grow from 20% in 2004 to nearly 40% by 2010, according to EER.
"Wind is becoming much more of a presence in European utilities' portfolios. Utilities will continue to displace small investors and capture a significant share of the market in the coming years -- a result of increased development activity and acquisitions," according to Keith Hays, Research Director of EER's Barcelona Office.
Europe's top three wind farm owners are Spanish-owned, with Iberdrola leading all European wind players by a large margin. Southern European utilities and IPPs accounted for much of the growth in wind power during 2004, including EHN Acciona, Endesa, Enel, CESA and EDP.
Gamesa's Dominance in Spain Boosts Europe-wide Market Share
Reverberating from shifts in geographic demand and wind farm ownership, 2004 marked a major shift in the competitive landscape of Europe's wind turbine market. According to EER, Spanish wind turbine manufacturer Gamesa showed the biggest overall gains in 2004 as it rose to second place in Europe, principally on the strength of the Spanish market.
Enercon, the leading German turbine manufacturer, remained strong in its home market but growth in other European markets such as Portugal and Austria was not enough to match Gamesa's impressive gains. Market leader Vestas benefited from its merger with NEG Micon to maintain the broadest coverage in the region, with important positions in all of the region's growth markets. GE Wind lost significant ground in Germany but growth in several other European markets helped the power equipment giant to hold onto fourth place in Europe.
Consolidation, acquisitions and market exits have all impacted the market share of major suppliers. The entry of German powerhouse Siemens, via its acquisition of Bonus Energy A/S of Denmark, is one more indication of the scaling of the wind power industry in Europe.
"Ultimately, the most successful suppliers will be those that are able to capture large orders from utilities," according to Hays. "Throughout Europe, all players will have to raise their game to a new level to meet the expectations of more sophisticated customers, intense competition, and challenging project requirements."
ABOUT THE STUDY
European Wind Power Markets & Strategies 2004-2010 analyzes the growth potential and competitive landscape of European wind energy markets, examining the key regulatory mechanisms that drive wind power growth as well as the market players that define the industry. More information on the study's contents can be found in EER's Media Summary available by clicking this link, or by visiting http://www.emerging-energy.com.
ABOUT EMERGING ENERGY RESEARCH
Emerging Energy Research (EER) is an independent research and advisory company, based in Cambridge, MA, that provides pragmatic forward-thinking advice about new energy technologies, markets and strategies. For more information, please visit http://www.emerging-energy.com.