With this combination of intensifying competitiveness and light-weight climate impacts, wind power is already making a powerful strategic contribution to efforts to conquer one of the world’s most pressing challenges: the creation of a secure, affordable and sustainable energy mix.
The Current and Future State of the Wind Energy Sector
Having doubled every three years since 1996, global installed wind capacity is rising steadily, with Asia now spearheading its growth. Offshore installations and the repowering of existing farms are serving as new sources of growth.
Wind energy is the lowest carbon emitter along its lifecycle; it has the shortest energy payback time; and it is one of the most cost-effective ways of introducing renewable energy into the grid.
By 2030, wind power’s share of global electricity demand could reach 20%, with annual installations nearly matching the total global capacity registered at the end of 2010. The expected growth of large offshore wind installations is becoming a key driver; another is the repowering of old wind farms with larger, more efficient turbines.
As technology and sector competence gather strength and push down costs, and as the appetite for non-fossil energy picks up, the industry can be expected to continue its forward-march.
Four Main Drivers of Grid Parity
Although wind energy has made substantial progress toward grid parity; it has yet to reach it as an industry. The sector’s achievement of this goal depends on progress in the following four areas:
- Cost structure
- Revenue optimization
- Regulatory environment
- Access to the grid
According to John Harris, Technical Manager, IKEA Goes Renewable, IKEA Services, the biggest challenges for the wind industry include the following:
- Unreliable government support
- Technical hurdles in offshore wind
- The lack of a global climate deal
- Competition from the solar PV industry
Improving Performance throughout the Wind Energy Project Lifecycle
From the sitingdecision and construction phase right through to the choice to repower or decommission, the wind energy project lifecycle is replete with opportunities to improve performance. We highlight some of the main areas of potential in the following lifecycle stages:
- Planning and development
- Engineering, procurement, construction and installation (EPCI)
- Operation and maintenance
- Transmission and distribution
- End-of-life management
The wind industry is in many ways still in its infancy. There are, thus, significant opportunities to shape its development by applying technological innovation along the wind energy project lifecycle.
Complemented by interviews with industry leaders, our analysis indicates that enhanced information management capabilities alone could deliver an 8-21% reduction in the levelised cost of wind energy. We have identified six specific opportunity areas:
- Integrating the management of wind farm assets over their lifetimes
- Optimizing wind farm layouts
- Strengthening wind power forecasting methods
- Improving enterprise management
- Moving from individual to integrated wind farm control centers
- Improving maintenance management
These measures (all of which could be implemented over the next five years) could accelerate the wind energy sector’s pursuit of grid parity across a larger number of markets.
While wind energy is already competitive in some markets, achieving grid parity on a wider scale is necessary if the sector is to sustain the high rates of growth that have characterized the last 15 years.
As it continues to build competitive advantage, the wind energy sector will generate valuable knowledge and expertise that could be used by other renewable energy sectors to overcome their intermittency challenges. In doing so, wind power will help the world create a secure, affordable and sustainable energy mix.
Read White Paper: A turn for the better: Improving the wind industry’s competitive edge (PDF, 1.74 MB)