European wind power markets will continue to grow steadily in the next eight years, with the region set to add an average of 9 GW per year through 2015, according to a new study from Emerging Energy Research.
European wind power markets will continue to grow steadily in the next eight years, with the region set to add an average of 9 GW per year through 2015, according to a new study from Emerging Energy Research - a leading advisory and consulting firm tracking emerging technologies in global energy markets. The European wind power market will grow from a total installed base of 48,452 MW at year-end 2006 to 130,816 MW at year-end 2015, according to EER's just-released market study.
Spain will remain Europe's largest growing market through 2015, adding an average of 2,200 MW per year during the next eight years, according to EER's study. Like Spain, Germany will continue to be a high-growth market, adding over 1,000 MW per year through the forecast period--with offshore compensating for paced decline onshore after 2012. While Spain and Germany will account for over 50% of Europe's wind power capacity through 2015, their participation will diminish over time as other Western European markets scale up and project flow and size increases in a number of Eastern European markets, led by Poland and Turkey.
"European wind power markets are evolving at three speeds. Large Western European countries Spain and Germany are entering a consolidation phase (1,500 MW to 2,000 MW per year); mid-size Southern and Northern markets are picking up significant momentum (200 MW to 1,000 MW per year); and emerging Eastern European markets are slowly laying the foundation for wind power development (50 MW to 200 MW per year)," according to EER European Wind Energy Advisory analyst Catalina Robledo.
Increased Consolidation Marks Maturing European Wind Power Markets
European utilities are amassing large and geographically diverse pipelines as they penetrate new markets through project or pipeline acquisitions, according to EER. With growth opportunities drying up in their consolidating home markets, leading developers are moving to scaling markets where they can amass large pipelines, and growth markets, where they can grab the best sites, to ensure steady sales of projects.
While most pan-regional IPPs and utilities aim to partake of the booming growth in scaling markets, some first movers such as Acciona, Iberdrola, and Enel are tapping available greenfield opportunities in riskier growth markets. While Southern European players--led by Spanish players Iberdrola and Acciona--are set to continue dominating Europe's onshore market, Northern utilities and developers are positioned to dominate offshore, with the most experience and largest pipelines.
"M&A is proving a key growth strategy for European wind power owners going forward, with smaller independent power producers struggling to grow in the face of increasing competition for sites, grid access, capital, and turbines. The bulk of European wind power is expected to be increasingly concentrated in the hands of utilities," says Robledo.
With the resources to make and digest big wind acquisitions while realizing large-scale projects, utilities are set to lead the sector, although top IPPs Acciona and Babcock & Brown will continue to leverage their financial muscle and experience to expand through acquisitions and strategic partnerships to maintain their dominant wind positions, according to EER.
European Offshore to Tap Large-Scale Potential Starting in 2009
By 2009, EER anticipates that the offshore market will begin to surge, surpassing 1 GW per year net additions, with 170 MW to 225 MW installed each in the UK, Germany, and Sweden and single project activations in Belgium, the Netherlands, and France. Between 2010 and 2015, the offshore market will continue adding an average of 1,300 MW per year, growing to 10.4 GW by the end of the forecast period, representing 8% of Europe's total wind power installed base, according to EER's study.
The European offshore market growth has been hampered by barriers including lengthy permitting processes, technical complexities, low incentive schemes, and lack of turbine availability. Despite these inhibitors, firms are moving offshore driven by high resource potential, limited onshore potential, and in the cases of some utilities like Vattenfall and E.ON, government pressure.
Wind will remain a key source of clean energy in Europe with most markets striving to meet 2010 RES goals and likely to set new targets beyond this date. In the global context, Europe will remain the major regional market, installing over 40% of global year adds through 2015, according to EER's study.