europe offshore wind energy
TRANSCRIPT
Destination Europe: Dawn of the ‘Offshore Wind’ Era
Sivapriya Ramakrishnan, Senior Research AnalystBusiness and Financial Services
November 4th 2010
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Focus Points
The European Wind Energy Market
Market Overview
Market Development
Impact of Recession
Wind Capacity Factor
Offshore Wind Installations and Forecasts
Cost Competiveness
Funding Patterns of Wind Energy Projects
Investment Scorecards
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European Wind Energy Market OverviewGlobal leader in cumulative wind installations. However, lagging in growth and new capacity additions
Wind Energy Market: Wind Resource Potential (Europe), 2009
Maximum Potential
Source: Industry Sources and Frost & Sullivan.
The United Kingdom has the highest wind speeds and
maximum offshore potential.
Wind Energy Market: Key Figures (Europe), 2009-2015
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
Parameters 2009 2015
Total installed capacity
74,767 MW ~170,000 MW
Market growth rate (y-o-y)
15.5% 12.8%
Market stage Slow Growth
Slow Growth
New capacity (previous year)
10,055 MW 24,400 MW
Incremental capacity leader
Spain Offshore – The United Kingdom
Spain has one of the largest markets in Europe due to its feed-in tariffs and legislative
environment
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European Wind Energy Market Overview (Contd…)Europe moves towards slow growth as other emerging regions overshadow its slow growth rates
Emerging Markets (Asia Pacific)
Time
Markets characterised by exponential growth rates. Projects funded by domestic utilities and government.
Win
d E
ner
gy
Dev
elo
pm
ent
Growth Markets (United States) Slow Growth Markets (Europe)
Total Installed Capacity: 41 GW
Several independent power producers and geographic expansion. Focus on onshore and tapping offshore potential.
Total Installed Capacity: 35 GW
Several domestic and foreign utilities present. Onshore matures as offshore takes priority. Repowering emerges.
Total Installed Capacity: 74 GW
Wind Energy Market: Market Development (World), 2009
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
Lo
wH
igh
5
Impact of Recession Europe’s growth was sluggish compared to the other regions such as North America and Asia Pacific. Although funds continued to flow, growth was not significant on a relative basis
North America Europe Asia Pacific Rest-of-world
Region 2008 2009 2008 2009 2008 2009 2008 2009
Share of Installations 22.3% 22.2% 53.7% 48.2% 21.4% 26.1% 2.6% 3.5%
Year on year growth NA
Wind Energy Market: Total Installed Capacity Share (World), 2008-09
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
Increase over previous year’s share Decrease over previous year’s shareNo change
Despite the recession, wind farms received €13 billion
in investments of which 12 per cent was dedicated to
offshore wind development.
Inflow of Funds Continued
The United States government allocated $1.05 billion in
2009 to promote wind energy of which 84 per cent of has
been distributed among predominantly the European
companies.
Foreign Funds
From accounting for more than 70 per cent of the wind turbine demand in 2005, Europe accounted for only 27 per cent of
new turbine additions in 2009. This is due to competition from their Chinese counterparts and the slump in European
market demand.
European Wind Turbine Manufacturers Relegated Behind
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Wind Capacity Factor The United Kingdom has the highest capacity factor in Europe. Increasing average capacity factor in Europe promises new installation additions in the upcoming years.
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
19.9
23.923.723.623.323.022.722.421.721.0
0.0
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
7,000.0
8,000.0
9,000.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Inst
alle
d C
apac
ity (
MW
)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Capacity F
actor (%)
New Installations (Onshore) Capacity Factor (Onshore)
Wind Energy Market: Total Wind Installations and Average Capacity Factor (Europe), 2000-2009
Country Capacity Factor in 2008(%)
Italy 15.7
France 18.8
The United Kingdom 30.9
Germany 20.9
Spain 21.7
Denmark 24.5
Highest due to increase in
offshore projects
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
With a growing offshore
base, the average capacity
factor is likely to reach 33
per cent by 2030.
Wind Energy Market: Average Capacity Factor (Europe), 2009, 2015 and 2020
Capacity Factor 2009 2015 2020
Average Installed Capacity Factor 24.3% 26.5% 28.9%
Average Onshore Capacity Factor 23.9% 25.2% 26.0%
Average Offshore Capacity Factor 41.3% 41.6% 42.3%
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan and European Wind Energy Association (EWEA)
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European Wind Energy Market – Installed Capacity Europe is the only region to have sizeable capacity in offshore wind
Wind Energy Market: Total Onshore andOffshore Capacity (Europe), 2009
Onshore Wind Installed Capacity
71.6 GW
Offshore Wind Installed Capacity
1.9
GW
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan and EWEA
0.0
1,900.0
0.0200.0400.0600.0800.0
1,000.01,200.01,400.01,600.01,800.02,000.0
Cum
ulat
ive
Win
d In
stal
latio
ns (M
W)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
YearOffshore Wind Installations
Wind Energy Market: Cumulative Offshore Installations (Europe), 2000-2009
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan and EWEA
Slow growth
Steep
gro
wth
8 year CAGR for Onshore Wind – 19.5%
8 year CAGR for Offshore Wind – 44.5%
Offshore wind has a capacity factor, which is twice that of
onshore wind. Since 2007, Europe has heavily
concentrated in increasing offshore projects. The large
coastline and regulatory environment have been supporting
the growth of offshore wind.
The United Kingdom has the maximum number of offshore
installations on a global level
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European Wind Energy Market –Offshore Wind ForecastsAs offshore wind takes off and more projects come online, it is expected to drive growth in installed capacity
Wind Energy Market: Total Offshore Installed Capacity Forecasts (Europe), 2010-2016
0.0
5,000.0
10,000.0
15,000.0
20,000.0
25,000.0
2010 2011 2012 2013 2014 2015 2016
Year
Cu
mu
lati
ve I
nst
alle
d
Cap
acit
y (I
n M
W)
0.0
20.0
40.0
60.0
80.0
100.0
120.0
Gro
wth
Rat
e (%
)
Offshore Wind Installed Capacity by Pessimistic Forecasts Offshore Wind Installed Capacity by Frost & Sullivan Forecasts
Offshore Wind Installed Capacity by Optimistic Forecasts Scenario 1
Frost & Sullivan Growth Rate Scenario 2
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
Assumptions
(
Scenario 1 – Offshore wind does not
expand as expected and delay in
consents in the United Kingdom largely
affect the market.
Frost & Sullivan Scenario – Offshore
wind grows phenomenally in 2010,
however, the market is unable to sustain
growth through the forecast period.
Scenario 2 – Although offshore wind
has a flying start in 2010-11, growth
does not spread to other areas as
expected, which leads to a drop in the
subsequent years.
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Cost Competitiveness and Funding Patterns of Wind EnergyThe wind energy developers in Europe comprises primarily several leading utilities such as Enel, EDF and others.
38.0 35.025.0 28.0
62.0 65.075.0 72.0
0.0%10.0%20.0%
30.0%40.0%50.0%60.0%70.0%
80.0%90.0%
100.0%
E.ON EDF ENEL IberdrolaUtility
Inve
stm
ent
Co
mp
osi
tio
n
Rest-of-World Europe
Wind Energy Market: Utility Investment Composition (Europe), 2009
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
Increasing share of overseas
investments
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
Year
Inv
es
tme
nt
Co
st
(€)
Investment Cost Onshore (€2005/kW) Investment Cost Offshore (€2005/kW)
Wind Energy Market: Investment Costs (Europe), 2000-2020
After a lull, the wind energy market picks up generating demand for turbines. Moreover, supply chain bottlenecks were high, which increased total cost.
Note: All figures are rounded; the base year is 2009. Source: Industry Sources and Frost & Sullivan
The investment costs of onshore and offshore wind
are expected to decline gradually as economies of
scale and technological advancements pave the way.
After 2012, the gap between onshore wind costs and
offshore wind costs is likely to reduce.
Declining Investment Costs
Wind project development is largely dominated by the major utilities of
Europe which have generously invested in other European countries
as well such as Germany, Italy, Spain and others.
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European Wind Energy Scorecard (Wind Project Development)Most of the investment potential for onshore wind lies in Spain and for offshore wind in Denmark and the United Kingdom .
20162009
Onshore Wind Investment Potential
Offshore Wind Investment Potential
Onshore Wind Investment Potential
Offshore Wind Investment Potential
Germany
Spain
Denmark
The United Kingdom
Italy
France
Wind Energy Market: Investment Potential in Development (Europe), 2009 and 2016
Country
HighLow
Source: Frost & SullivanThe potential is ranked based on the existing market status and the planned capacity in pipeline. The
regulatory environment is also taken into consideration.
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