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GWEC | GLOBAL WIND REPORT 2021
GLOBAL WIND ENERGY COUNCIL
Leading Sponsor
Supporting Sponsor
Associate Sponsors
GWEC.NET
Table of Contents
Foreword 2
Introduction 5
Wind energy’s role on the road to net zero 8
Enabling technology: Power-to-X
and green hydrogen 19
Market status 2020 43
Markets to watch 55
Market outlook 2021-2025 67
Appendix 73
GLOBAL WIND ENERGY COUNCIL
Global Wind Energy Council Lead Authors Valuable review and commentary Published
Rue Belliard 51-53 Joyce Lee, Feng Zhao for this report was received from: 25 March 2021
1000 Brussels, Belgium •Silvia Piana and Francesca Manni
Contributors (Enel Green Power) Design
T. +32 490 56 81 39
Alastair Dutton, Ben Backwell, Ramón Fiestas, Liming •“Sustainability in the wind energy industry” section: lemonbox
info@gwec.net
Qiao, Naveen Balachandran, Shuxin Lim, Wanliang Karl Zammit-Maempel (COP26 Climate Champions) www.lemonbox.co.uk
www.gwec.net
Liang, Emerson Clarke, Anjali Lathigara, •Industry reviewer (requested anonymity)
Dana R. Younger
GWEC | GLOBAL WIND REPORT 2021 1
Foreword
Word from the Chairman drive a higher system value than
fossil fuel-based options time and
again. They are cleaner, safer,
At this point last year, the global of us. As renewable energy grows, cheaper, more labor-intensive and
disruption of COVID-19 was only wind energy will become the use less water.
just beginning to take shape. I backbone of energy systems in
sincerely hope that 2021 will see many parts of the world, requiring Experience also shows that the
the world overcoming the us to move beyond the focus on benefits of historic green recovery
pandemic. Until then however, to simply increasing wind energy measures have exceeded the level
paraphrase Albert Einstein, “In the capacity to instead instigating new of investment by far. Analysis from
middle of difficulty lies collaborations with stakeholders IRENA shows that every dollar
opportunity.” Right now, we are in across the global energy system spent on Sustainable Energy
Morten Dyrholm the midst of a rare period of to uncover more powerful policies Transformation will deliver a payoff
Chairman, Global Wind Energy Council opportunity: to build back better, and unlock greater investments to between $3-7. It’s now up to us to
to create more resilient societies, fuel the Sustainable Energy take this evidence forward to drive
and to get serious about Transition. This entails expanding change.
combating climate change. our reach to cover key issues such
as grid build-out, storage, market The system value approach also
The indications look promising. redesign and accelerating the requires us to look inwards and
Recovery and stimulus measures are deployment of renewable energy evaluate our own sustainability
getting greener. The number of to new sectors. ambitions. Are we doing enough
countries, cities and companies to decarbonise our own
striving for net zero is on the rise. Succeeding in our task entails operations, to promote diversity
COP26 could become the climate shifting the focus of both policy and inclusion, to improve health
summit that will yield tangible action, makers and the private sector and safety, or to nurture
leaving the work of persuasion and from cost to value. Adopting a circularity? Many of us have the
promises firmly in the past. system value lens means looking power and autonomy to drive
beyond the size of recovery progress in our own organisations.
I venture a bet here: 2021 will packages, investment needs or
mark our entry into the decade of the cost of energy. It requires a GWEC will continue to support
renewables. The stage is set for holistic view, whereby we build our industry with every step of this
global commitment to the robust frameworks that support transformational journey. 2021 will
Sustainable Energy Transition, the solutions that maximise positive be a pivotal year for our planet’s
only road that can lead us to net impacts while discouraging future. I’m looking forward to it.
zero by 2050. negative impacts. Renewables will Source of the return on investment: IRENA, Transforming
be part of the solutions as plenty the energy system, 2019, https://www.irena.org/-/
media/Files/IRENA/Agency/Publication/2019/Sep/
We have an important task ahead of data proves that renewables IRENA_Transforming_the_energy_system_2019.pdf
2 GWEC.NET
Foreword
Welcome to the Global Wind Report 2021
When we look back, in years to the year when a real breakthrough has increased, particularly driven
come, at this 2021 edition of the was made in the energy transition, by the growing concern, anger
Global Wind Report, we hope we and a new, accelerated path of and activism of young people,
will see it as marking a true growth was established as progress on the ground is still far
inflection point. countries and regions started to from the level needed to get the
implement their plans to reach net world on a trajectory that will
If we are successful as a society, zero CO2 emissions in earnest. restrict global average
we will remember 2021 as the year temperature increases to no more
when the world finally turned the That, then, is the hope. And that’s than 1.5°C.
corner in confronting the climate why the Global Wind Energy Ben Backwell
crisis by adopting a decisive path Council has produced this special As an example, global annual CEO, Global Wind Energy Council
of collective action at the COP26 report in the run up to COP26, installations of renewable energy
meeting in Glasgow. which will focus on the role of are probably below half the level
needed to get to an IPCC-
compatible scenario. For wind
We need to be installing around 180 GW per year energy, this means that while we
installed a record 82 GW of new
to get to where we need to be. Every year we fall wind capacity in 2020, we need
to be installing around 180 GW
short, the mountain to climb gets higher. per year to get to where we need
to be. Every year we fall short,
the mountain to climb gets
higher.
We will also remember 2021 as the renewable energy and wind
year when we started to heal the power in particular in the world’s The danger is that governments
scars left by the novel Coronavirus net zero objectives, as well as the increase their long-term ambitions
pandemic, and started to rebuild our rapid transition to renewable around reaching net zero in 2050
economies and communities in a energy that oil and gas companies (or 2060 in the case of China),
more sustainable and humane way. will need to make to in order to while shorter term targets are left
survive and play their role in the vague or missed: in effect, kicking
And for the wind industry, we will transition. the problem into the “long grass”
remember this year as not only for future administrations and,
marking the biggest year ever in The report pulls no punches. For eventually, creating a situation
terms of new installation, but also while the world’s sense of urgency where it really is too late.
GWEC | GLOBAL WIND REPORT 2021 3
Foreword
For this reason, GWEC has been a true “Climate Emergency” move rapidly from being buzz-
strongly advocating for a re-set in approach to administrative phrases to new sectors, industries
our everyday approach to the procedures and institutions. and technological advances.
energy transition.
Thirdly, we are calling on And this brings me to my final
Firstly, we need to create a sense of governments to move to rapidly point. To achieve this re-set, and
urgency by being honest about ensure that the social costs of the wider dream which I have
where we are right now and the emitting carbon are paid, and that described, we are all going to
gap between aspirations and polluting energy use is pushed off have to work together.
progress on the ground. We need the system. The experience of the
to explain to policymakers and last decade shows that once This means governments,
regulators that reaching net zero governments make clear signals, communities and industry getting
depends on the actions that we the investment community will take together and finding rapid
take now. the decisions which are necessary. solutions to planning and
permitting bottlenecks. It means
technologies such as wind, solar,
storage and next-gen transmission
Red tape and antiquated planning and permitting and distribution working together
systems are slowing down the Energy Transition all to ensure that the transition can be
made as seamlessly and efficiently
over the world. So GWEC is advocating for policy as possible. It means renewables
makers to take a true “Climate Emergency” approach working together with completely
different technologies which have
to administrative procedures and institutions. their own unique challenges and
trajectories.
It also means working together to
Secondly, we need to propose And fourthly, we are going to have evolve the highly skilled and
immediate and practical solutions. In to find new allies, partners and diverse workforce that will carry
contrast to a decade ago, there is customers, as the challenge of out a true paradigm shift in how
plenty of investment looking to flow transitioning to renewable energy society organises its energy
into wind and renewables projects, becomes more about helping economy.
but red tape and antiquated harder-to-transform sectors such
planning and permitting systems are as heavy industry, chemicals, This, then, is our challenge and
slowing down the Energy Transition transport and agriculture to invitation to you all.
all over the world. So GWEC is decarbonise. The terms “Power-
advocating for policy makers to take to-X” and “Sector Coupling” will
4 GWEC.NET
INTRODUCTION GWEC | GLOBAL WIND REPORT 2021 5
Introduction
2020 - A record year for the wind industry
2020 was the best year in history total of 74 GW of new onshore cancelled due to COVID-19, the
for the global wind industry wind capacity last year, or 76% sector bounced back with vigour
showing year-over-year (YoY) more than the previous year. Due in the second half of the year as
growth of 53%. Installing more than to the slow recovery of onshore key mature and emerging wind
93 GW wind power in a installations in Germany last year, markets began to overcome the
challenging year with disruption to Europe saw only a 0.6% YoY impacts of the pandemic.
both the global supply chain and growth in new onshore wind According to GWEC Market
project construction has installations. Developing markets Intelligence, nearly 30 GW of new
demonstrated the incredible in Africa and the Middle East wind power capacity was awarded
Feng Zhao resilience of the wind industry. reported 8.2 GW onshore globally through auctions in the
Head of Strategy and installations last year, almost the second half of 2020, which is a
Market Intelligence, GWEC
Market status same as in 2019. slight increase compared to the 28
The 93 GW of new installations GW awarded during H2 2019.
brings global cumulative wind In the offshore market, 6.1 GW was Although only 1 GW offshore wind
power capacity up to 743 GW. In commissioned worldwide last capacity was awarded through
the onshore market, 86.9 GW was year, making 2020 the second-best auctions worldwide, more than 7
installed, an increase of 59% year ever. China installed half of all GW of offshore wind auctions/
compared to 2019. China and the new global offshore wind capacity tenders were launched in 2020.
US remained the world’s largest in a record year. Steady growth This surge in new capacity to be
markets for new onshore additions, was recorded in Europe with the auctioned is a clear signal that the
and the world’s two major Netherlands taking the lead industry is back on track and that
economies together increased followed by Belgium, the UK, the global pipeline of wind power
their market share by 15% to 76%, Germany and Portugal. The projects continues to grow.
driven by the Feed-in Tariff (FiT) remaining new offshore wind
cut-off in China and the scheduled installations in 2020 were shared Through technology innovations
phase-out of the full-rate by the US and South Korea. Total and economies of scale, 2020 saw
Production Tax Credit (PTC) in the offshore wind capacity has now wind power continue to build its
US, respectively. passed 35 GW, representing 4.8% competitive advantage throughout
of total global cumulative wind the world. Last summer, a
On the regional level, 2020 was capacity. consortium of Shell and Eneco won
also record year for onshore the third zero-subsidy offshore
installations in Asia Pacific, North Market dynamics wind tender in the Netherlands. In
America and Latin America. The While the first half of 2020 saw Latin America, as wind power
three regions combined installed a auctions being postponed or already had very competitive
6 GWEC.NET
Introduction
prices, private auctions or bilateral systematic and radical energy incentive schemes. Nevertheless,
PPAs have already emerged as an transition from fossil fuels to the market outlook for our forecast
alternative mechanism to renewable energy and low-carbon period remains positive. GWEC
government auctions to drive solutions is imperative. The current Market Intelligence expects that
growth. According to crisis offers a unique window of over 469 GW of new onshore and
BloombergNEF, 6.5 GW wind opportunity to put the world on a offshore wind capacity will be
power was signed through sustainable trajectory and meet added in the next five years - that
corporate PPAs globally last year, our international climate goals, but is nearly 94 GW of new
29% lower than the previous year. we must act now - or miss the installations annually until 2025,
Considering the fact that opportunity. Although reaching net based on present policies and
pipelines. We hope and expect that
governments will significantly
Although reaching net zero will require bold increase their ambitions and
targets following COP26, and for
actions by a large number of sectors and actors, that reason we are upwardly
revising our forecasts for the
wind power is placed to be one of the cornerstones GWR2022.
of green recovery and to play an important role in
The CAGR for onshore wind in the
accelerating the global energy transition. next five years is 0.3% and GWEC
expects annual installation of 79.8
GW. In total, 399 GW is likely to be
COVID-19 disruptions across the zero will require bold actions by a built in 2021-2025. The CAGR for
world have caused revenues to large number of sectors and offshore wind in the next five years
plummet for many corporates, the actors, wind power is placed to be is 31.5%. The level of annual
level of commitment to sustainable one of the cornerstones of green installations is likely to quadruple
green energy remains impressive. recovery and to play an important by 2025 from 6.1 GW in 2020,
role in accelerating the global bringing offshore’s market share in
Last year also witnessed energy transition. global new installations from
governments of countries such as today’s 6.5% to 21% by 2025. In
China, Japan and South Korea Market Outlook total, more than 70 GW offshore is
making net zero/carbon neutrality After an unusual 2020, global wind expected to be added worldwide
commitments, and similar market growth is likely to slow in 2021-2025.
commitments were also made by down in the near-term primarily
major corporates including oil and due to an expected drop in
gas companies. To reach the net onshore installations in China and
zero targets, completing a the US following the expiry of
GWEC | GLOBAL WIND REPORT 2021 7
WIND ENERGY’S ROLE ON THE
ROAD TO NET ZERO
8 GWEC.NETWind energy’s role on the road to net zero
1. Wind energy’s role on the road to net zero
Like a high-resolution satellite of businesses, investors, cities, according to the IEA, including offshore oil and gas for the first
image, 2020 offered a sharpened regions and universities.1 falls of 8% and 7% for oil and coal time.4
reality of the state of our planet. The demand, respectively.2 Credit
COVID-19 pandemic brought It is worth looking back at a long agencies are now expecting From the EU to large Japanese
greater recognition to the year in which the global wind global oil demand to continue trading houses to the world’s largest
consequences of human industry demonstrated its declining steadily over the next investment funds and development
development on the natural world, resilience and its role in green decade; in its most conservative finance institutions, there are calls to
and of the cascading knock-on recovery. But the events of 2020 outlook, BP forecasts peak oil phase out coal and the financing of
effects an event can wield on our also defined the outlines of what demand as soon as 2025.3 Last new coal plants. Although coal
economies, livelihoods and security. lies ahead: the role of wind energy year, capex committed to offshore reduction still lags in parts of
in a carbon-neutral world. wind overtook investment in Eastern Europe, in 2020 renewables
As policymakers chart the way out
2100 Warming projections
of the pandemic, and emissions The pandemic accelerates shifts in
2100 Warming
Emissions projections
and expected warming basedon pledges and current policies
show signs of returning to pre- the global energy matrix
Emissions and expected warming based on pledges and current policies
pandemic levels in the world’s The pandemic cast a long shadow
fastest growing economies, there is across the world, posing a 200
Global greenhouse gas emissions GtCO2e / year
unprecedented agreement that challenge to economies and to the
climate change is the true global global wind industry as never Warming projected
by 2100
emergency. The concept of a before. Its impacts reverberated 150
runaway threat crippling the entire throughout the wind supply chain, Baseline
4.1 – 4.8 C
O
world is now not only credible, but disrupting manufacturing and
relatable. This has prompted the export flows. From the US to South 100
UN to underscore the call for Africa, projects were hit by delays.
urgent action to reach net zero Current policies
2.7 – 3.1 C
O
greenhouse gas (GHG) emissions While some impacts were
50 Pledges & Targets
by 2050 – a call which has since temporary, the pandemic also 2.3 – 2.6 C
O
been echoed by more than 120 accelerated energy shifts already Historical Optimistic
net zero targets
countries representing over half of in motion. Global energy demand 2.1 C
O
0
global GDP, alongside thousands declined by roughly 5% in 2020, 2 C consistent
O
1.6 – 1.7 C
O
1.5 C consistent
O
1. https://unfccc.int/climate-action/race-to-zero-campaign; https://eciu.net/analysis/briefings/net-zero/net-zero-the-
1.3 C
O
scorecard#:~:text=Net%20zero%20economies,(World%20Bank%2C%202018)
2. https://www.iea.org/reports/world-energy-outlook-2020 -50
3. https://www.carbonbrief.org/analysis-world-has-already-passed-peak-oil-bp-figures-reveal 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
4. https://www.tradewindsnews.com/offshore/-51bn-in-wind-farm-capital-spending-outstrips-oil-and-gas-for-first-
time/2-1-955552 Source: Climate Action Tracker, December 2020.
GWEC | GLOBAL WIND REPORT 2021 9Wind energy’s role on the road to net zero
generated more electricity in the These are no longer just market optimistic scenarios, we will miss Cost reduction from larger
EU than fossil fuels for the first time, trends, at least in the sense of our Paris targets. turbines, innovations in installation/
powered by 14.7GW of new wind cyclical movements. It is clearer than O&M and reduced investor risk
plants reaching grid connection. ever that the era of fossil fuels is over, Wind energy’s role in will further drive deployment: Out
and the global energy transition is achieving net zero to 2030, IRENA expects average
2020 also saw milestone here to stay. 2020 presented a One year on from the beginning LCOE of onshore wind to continue
commitments to carbon neutrality, once-in-a-generation opportunity to of the pandemic, the wind declining by 25% from 2018 levels,
with the EU, Japan, South Korea, reset human development. The industry has demonstrated while offshore wind LCOE will
Canada and South Africa each question is whether we can turn incredible resilience. In Q2 2020, shrink 55% from 2018.7
pledging to reach net zero by 2050. the newfound sense of optimism GWEC Market Intelligence was
Combined with China’s net zero by and urgency into accelerated predicting a 20-30% reduction to But accelerated growth of wind and
2060 target and the US intention to implementation and deliver the the end-of-year forecast. But the renewable energy is required to
reach net zero by 2050 under the transition in time. 2021 must be the industry more than bounced “bend the curve” and put us on a
Biden administration, countries time to turn long-horizon net zero back to deliver a record year of trajectory which can limit global
which have adopted or considered roadmaps into actions, via concrete growth with 93 GW, largely warming to “well below” 2°C, as set
net zero targets now represent policy interventions, interim target- spurred by installations in China. out in the Paris Agreement. Current
two-thirds of the global economy setting and robust delivery plans. Investment in offshore wind policies are propelling us towards a
and 63% of global GHG emissions.5 Otherwise, even in the most surpassed 2019 levels to reach 2.9°C pathway by 2100. If all
US$303 billion in 2020, partly due pledges and NDCs as of December
to the sector’s longer project 2020 were implemented, we might
Annual wind installations must increase dramatically to reach net zero by 2050 development timelines which are reach 2.1°C and will miss a net zero
New global wind installations (GW) more resilient to the pandemic by 2050 target.
New global wind installations (GW) impacts.6
Total New Wind Installations Required Under IEA’s NZE2050 Scenario
With a few exceptions, the
Offshore Wind
CAGR +12% 280 While jobs have been lost and energy sector, which makes up
Onshore Wind projects delayed, the global wind around three-quarters of global
industry defied expectations and is GHG emissions, is characterised
CAGR +17%
set to continue growing at a steady by long investment and
160 pace. Before 2025, the industry will development timelines – an
exceed 1TW in global cumulative accelerated pace for change
installations of onshore and must be set now. Every year we
88
93 offshore wind, according to GWEC fall short of the dramatic action
60
Market Intelligence. needed to change our pathway
5. http://www3.weforum.org/docs/WEF_Net_Zero_Challenge_The_Supply_Chain_Opportunity_2021.pdf; https://
climateactiontracker.org/publications/global-update-paris-agreement-turning-point/
2019 2020* 2021* 2022 2023 2024 2025 2026 2027 2028 2029 2030 6. https://webcache.googleusercontent.com/search?q=cache:SJo8SyYNV5cJ:https://www.windpowermonthly.com/
article/1704954/offshore-wind-spending-reaches-record-high-2020+&cd=1&hl=en&ct=clnk&gl=uk
Source: GWEC Market Intelligence; IEA World Energy Outlook (2020), volume in 2022-2024 and 2026-2029 are estimates 7. https://www.irena.org/publications/2020/Apr/Global-Renewables-Outlook-2020
Average annual installations of 180 GW over this decade
10 GWEC.NETWind energy’s role on the road to net zero
deepens the decarbonisation
cuts required in years to come, Wind energy in long-term Share of wind energy (%) in total global electricity mix versus global
energy-related CO2 emissions
energy scenarios
and locks in the devastating 50%
burdens of climate change for GWEC Market Intelligence analysed BNEF ’Climate Scenario (2050)’
future generations. different long term energy scenarios 40%
IRENA ’1.5 - S’ (2050) IRENA ’TES (2050)’
(LTES) to map the role of wind energy in
30%
To have a chance of meeting the the global energy transition and,
Shell ’Sky 1.5 (2050)’
eventually, carbon neutrality. Selection of BP ’Net Zero (2050)’ IEA ’SDS (2030)’
Paris targets, fossil fuel-based 20%
LTES was based on compatibility with BP ’Rapid (2050)’ Equinor ’Rebalance (2050)’ Trendline
capacity needs to be phased out Paris Agreement targets for a 1.5°C
concurrent to an increasingly steep pathway by end-of-century and the recent
10%
DNV GL (2050)
Current status (2019)
expansion of renewables and UN goal to reach net zero emissions by 0
related infrastructure. For wind, 2050. Not all scenarios extended to 2050 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34
annual deployment must surge to (year of the forecast is indicated in Compatible with pathway ’1.5° C’
CO 2 (Gt/year)
around 180 GW, according to parentheses on the graphs), and each Compatible with pathway ’well below 2° C’
Non-compatible with pathway ’well below 2° C’
IRENA’s Transforming Energy depends on a unique set of system Note: (20XX) indicates the year of projected scenario
Scenario. Under the IEA’s Net Zero transformations, technology innovations Sources: BNEF New Energy Outlook 2020; IRENA Global Renewables Outlook 2020; IEA World Energy Outlook 2020
(Sustainable Development Scenario); BP Energy Outlook 2020; Equinor Energy Perspective 2020; DNV GL Energy
by 2050 scenario, annual run rates and behavioural changes. Transition Outlook 2020; IRENA World Energy Transitions Outlook preview 2021(Data of ‘Wind share in total glo
electricity generation’ is an estimate, page no. 19); Shell-Energy Transformation Scenarios, February 2021.
Further LTES are mapped out in the report: IRENA (2020), Global Renewables Outlook: Energy transformation 2050.
for wind would need to be even Institutional and commercial LTES call for
steeper, reaching 160 GW by 2025 Share of wind energy (%) in total global electricity mix versus
higher shares of wind energy in the total
10% total electricity generation
and then 280 GW by 2030 – 3 power mix due to its stable generation
50%
times the volume built in 2020. profile – 43% in the case of BNEF’s
scenario and 35% in the case of IRENA’s BNEF ’Climate Scenario (2050)’
40%
Over the next 10 years, international Transforming Energy Scenario – paired IRENA ’TES (2050)’
institutions are calling for profound with widescale electrification measures for 30%
IRENA ’1.5- S’ (2050)
system-wide decarbonisation. The general Trendline Shell ’Sky 1.5 (2050)’ BP ’Net Zero
system transformation to take place. Equinor ’Rebalance (2050)’ (2050)’
trendline reflects that wind energy must 20%
The UN Race for Zero has pegged rise from today’s roughly 6% share of the
IEA ’SDS (2030)’
BP ’Rapid (2050)’
the tipping point in the clean power global power mix to more than 30% by 10%
DNV GL (2050)
sector as reaching a 60% renewable 2050, to achieve proximity to a pathway Current status (2019)
energy share in the global power well below 2°C. 0
0 50,000 100,000 150,000 200,000
mix, including 30% from wind and
LTES diverge when it comes to the scale Total Global Electricity Generation (TWh)
solar power. Total annual global
of electrification for a Paris-compliant Compatible with pathway ’1.5° C’
investment in clean power and pathway. The scenarios with higher rates
Compatible with pathway ’well below 2° C’
Non-compatible with pathway ’well below 2° C’
enabling system infrastructure of global electricity generation (BNEF, Note: (20XX) indicates the year of projected scenario
needs to rise from US$380 billion in IRENA and BP) emphasise both higher
Sources: BNEF New Energy Outlook 2020; IRENA Global Renewables Outlook 2020; IEA World Energy Outlook 2020
(Sustainable Development Scenario); BP Energy Outlook 2020; Equinor Energy Perspective 2020; DNV GL Energy
Transition Outlook 2020; IRENA World Energy Transitions Outlook preview 2021(Data of ‘Wind share in total glo
2020 to $1.6 trillion by 2030, shares of wind and renewable energy electricity generation’ is an estimate, page no. 19); Shell-Energy Transformation Scenarios, February 2021.
Further LTES are mapped out in the report: IRENA (2020), Global Renewables Outlook: Energy transformation 2050.
according to the IEA.
GWEC | GLOBAL WIND REPORT 2021 11Wind energy’s role on the road to net zero
combined with green hydrogen and degree of structural and behavioural changes The backdrop of most energy health cost savings attached to
Power-to-X solutions to meet final energy to reduce energy demand. transition scenarios combines wind energy. Meanwhile,
consumption needs. large-scale renewable energy initiatives like the UN-linked
As of the end of 2020, 127 countries covering
generation, widescale electrification Ocean Panel and Ocean
Outside of electrification rates, LTES are 63% of global GHG emissions have
(particularly in the power, industry Renewable Energy Action
aligned in calling for a rapid acceleration of expressed or are considering net zero goals.
wind energy deployment alongside This balance of measures in these LTES can and short-distance transport Coalition have highlighted
improvements in energy efficiency, demand- be instructive for national long-term energy sectors) and energy efficiency offshore wind as a vital technology
side flexibility and sector coupling for a clean, planners, particularly as they align policies measures. A mix of innovative which will provide 10% of the
resilient and secure energy system. This with net zero targets. The backdrop of major technologies, from green hydrogen needed carbon mitigation by
convergence of different policies is reflected LTES comprises large-scale renewable to digitalisation and storage 2050 for a 1.5°C pathway.11
in the graph below, where most scenarios energy penetration for onshore wind, solutions, will be required to enable
which are 1.5°C-compatible and closer to net offshore wind and solar energy, widescale high rates of renewables But in practical terms, the scale of
zero by 2050 call for at least a 60% share of electrification, energy efficiency measures penetration, adequate security and build envisioned by 2030 means
renewable energy in the total primary energy and the deployment of technological flexibility of the power system and that actions to set the global wind
supply. Scenarios are also aligning around a innovations like Power-to-X and green
decarbonisation of hard-to-abate industry on this path need to be
bandwidth of 500-650 EJ/year, requiring a hydrogen for storage and system flexibility.
sectors. These scenarios require taken now, given the time required
decarbonisation of molecules, not for policy commitments to
Share of renewable energy (%) in total primary energy supply just electrons. materialise, project development,
financing decisions and more.
80% Can we more than treble the Increasing capacity for wind and
IRENA ’1.5- S’ (2050)
70%
IRENA ’TES (2050)’ BNEF ’Climate Scenario (2050)’
volume of wind energy projects renewables will also require
60% being installed worldwide over urgent forward-planning of
IPCC ’Below 1.5° C (2050)’ BP ’Net Zero (2050)’
50% IEA ’SDS (2030)’
the next 10 years? Onshore wind infrastructure and grid buildout, as
BP ’Rapid (2050)’ is already a mature and well as investment in storage
40%
DNV GL (2050) Shell ’Sky 1.5 (2050)’ mainstream energy source which technologies and demand-side
30%
Equinor ’Rebalance (2050)’
is cost-competitive with new coal/ management.
20% gas plants and, in many markets,
Current status (2018)
10% undercuts the operating costs of Even a concentrated sprint of action
0 fully depreciated conventional in the run-up to COP26 in November
400 500 600 700 800 900 generation assets.10 There is 2021 will not be enough to win the
Compatible with pathway ’1.5° C’
TPES (EJ/year) expanding recognition of the race to net zero. To bend the curve,
Compatible with pathway ’well below 2° C’ economic growth, job creation, policymakers must adopt the
Non-compatible with pathway ’well below 2° C’
Note: (20XX) indicates the year of projected scenario
water consumption savings and principle of continuous improvement
Sources: BNEF New Energy Outlook 2020; IRENA Global Renewables Outlook 2020; IEA World Energy Outlook 2020
(Sustainable Development Scenario); BP Energy Outlook 2020; Equinor Energy Perspective 2020; DNV GL Energy in line with the “ratchet mechanism”
Transition Outlook 2020; IRENA World Energy Transitions Outlook preview 2021(Data of ‘Wind share in total glo
electricity generation’ is an estimate, page no. 19); Shell-Energy Transformation Scenarios, February 2021.
Further LTES are mapped out in the report: IRENA (2020), Global Renewables Outlook: Energy transformation 2050.
10. https://www.irena.org/publications/2020/Jun/Renewable- of the Paris Agreement, and continue
Power-Costs-in-2019
11. https://oceanpanel.org/sites/default/files/2019-10/
to push for higher ambitions at
HLP_Report_Ocean_Solution_Climate_Change_final.pdf regular intervals.
12 GWEC.NETWind energy’s role on the road to net zero
Working together to accelerate nationally significant and critical retirement of conventional assets and avoiding the risk of stranded
wind energy deployment infrastructure, with improvements and redirecting subsidies into assets.
In every major institutional to streamline permitting and worker training funds and
scenario for energy system simplify license applications; diversity strategies for workforce The challenge will be deploying
transformation, the wind market development. capital into bankable wind projects
must rapidly expand over the next l Investingin long-term grid and at a sufficient rhythm to accelerate
decade. The industry must be transmission planning and Policy and regulation provide the annual installations to the near-200
resoundingly clear that this growth infrastructure; signals to the private sector for GW level. In 2020, there were more
will not happen spontaneously and action and investment, allowing for credit rating downgrades for
requires urgent policy l Safeguarding existing and economical decision-making. emerging markets and developing
interventions worldwide. awarded wind projects, and Making benefits and countries than in all previous
avoiding retroactive changes to consequences clear to economic crises over the last 40
A “climate emergency” approved remuneration businesses, via “pull” signals like years.13 For emerging economies,
approach to act now schemes; targets and “push” signals like the pandemic has raised the
Photo Credit: Equinor
As with wartime-era measures, the taxes, will allow business to spectre of higher financing costs,
experience in 2020 demonstrated l Enabling open-access regulation reorganise in line with a carbon- due to increased fiscal pressure on
the mandate for governments to for a bilateral market of neutral pathway. the balance sheets of public
act in a crisis and free up renewable energy; utilities and grid operators, as well
bandwidth for public institutions. The last year has demonstrated as higher regulatory, currency and
As we freewheel forwards on an l Creatingpolicy frameworks for that investment in the wind counterparty risks.
“off-track” pathway to 2050, repowering of older wind plants industry is plentiful. The pandemic
governments should similarly react in mature wind markets; has tipped the scales, Greater coordination is needed
to convene resources to radically irreversibly, for private to de-risk climate and renewable
scale up the deployment of l Acceleratingnet zero investment in clean energy. In the energy finance in emerging
renewable energy. Among other commitments, carbon budgets, first half of 2020 alone, while overall economies. Temporary debt
measures, this could entail: carbon pricing and science- investment in power generation suspension by actors like the G20
based approaches among slumped, offshore wind financing and IMF will not be enough.
l Committing to ambitious government bodies, and sense- quadrupled compared to the same Governments should work
capacity targets for wind energy checking reliance on CO2 period in 2019, reaching US$35 together with multilateral
which increase over time; removal technologies in net zero billion.12 Retail and institutional development banks (MDBs),
plans; and investors increasingly view clean development finance institutions
l Granting “must-run” status, energy as a safe harbour. Major (DFIs) and the financial sector to
priority dispatch and priority l Creating frameworks for a just utilities like Engie, Enel Green create financing mechanisms
grid connection to wind and transition, including ending Power, Iberdrola, TEPCO and 12.https://www.theguardian.com/environment/2020/jul/13/
renewable projects; direct and indirect subsidies for KEPCO have been future-proofing offshore-wind-energy-investment-quadruples-despite-
covid-19-slump
fossil fuel plants, providing fair their balance sheets by increasing 13. h
ttps://www.bu.edu/gdp/files/2020/11/DRGR-report-
l Categorising wind projects as compensation for early investment in clean energy assets Jan-2021.pdf
GWEC | GLOBAL WIND REPORT 2021 13Wind energy’s role on the road to net zero
which build on the strong Such mechanisms could be private financial flows to climate
economics of wind energy, record- developed with an “emergency” change mitigation solutions like
low global interest rates and the or “rapid response” approach to wind energy.
availability of low-cost funding for quickly move to supporting
renewables and storage capacity.14 emerging economies and redirect From hydrocarbons to electrons
The central logic of the road to net
zero will be to electrify everything
Case Study: Optimising wind plant performance we can in line with a cost-optimal
Provided by: WindESCo clean energy transition. Widescale
Optimisation is playing an increasingly important role in the WindESCo solution required no hardware be installed at the site direct electrification can leverage
growth of wind energy and enabling energy transition. WindESCo and provides analytics beyond existing asset monitoring existing technologies, with wind
provides solutions to help owners and operators maximize their platforms. Throughout the process the two companies worked and renewable energy dispatched
assets’ performance, energy production and reliability to unlock closely to determine optimised parameters, verify that they were to power homes, industry, short-
hidden value and promote a carbon-free energy future. implemented correctly, and calculate the gains in energy output. distance transport and the
WindESCo’s mission is ensuring that every turbine produces its infrastructure of our cities. With
After collecting enough data, the WindESCo team performed
maximum energy output and operates reliably beyond its
analytics consisting of proprietary SCADA data checks. Three more stable generation profiles,
intended lifetime, a critical step on the journey to Net Zero.
checks came out as requiring further investigation. Working with offshore wind, hybrid projects and
About the Project UPC Renewables, WindESCo determined that addressing Static virtual renewable power plants can
WindESCo was engaged by UPC Renewables to optimize 79 MW Yaw Misalignment would provide the best short-term value. Two provide strong complementarity to
of in-warranty turbines under an OEM full-service agreement additional recommendations were identified for further the continuous power demands of
(FSA). The Sidrap Wind Farm, located in Indonesia, is operated improvement. the industry and buildings sectors.
by UPC Renewables, the leading independent power producer Out of 30 turbines, WindESCo determined that 27 were
(IPP) in Asia-Pacific. Globally, UPC has 4,500 MW of installed experiencing greater than 2° of static yaw misalignment and Electrification will itself compound
capacity. needed correction. The company worked with UPC Renewables the demand for green power, as the
In 2019, UPC Renewables’ new 30 tower wind plant was to implement recommendations, and to confirm the market incentives to decarbonise
generating less-than-expected revenues compared to pre- recommended offsets were implemented correctly. (e.g. carbon caps and border
construction estimates. The wind plant was not meeting its P50 adjustment taxes) and to electrify
projection and turbines were failing their power curve tests. No Measurable Results (e.g. electric vehicle subsidies and
solution was being offered by the OEM to address the issues and In just a few months, WindESCo was able to optimize plant output, electrification of industrial
increase production. an endeavor that would have taken over a year with other processes, such as heat generation
technologies. The insights gained through WindESCo’s solutions for petrochemical cracking) will
Scalable Solutions directly resulted in a 2% increase in AEP for the project. aggregate the demand for data
UPC Renewables sought a cost-effective, scalable solution that The impact to the bottom line? An increase of $5,700/MW/Yr for a analytics, cloud-based storage and
would provide immediate ROI. WindESCo offers a total benefit of $450,000/Yr. All without invalidating UPC machine communication.
comprehensive wind farm AEP improvement software which Renewables’ FSA and Warranty with the OEM.
leverages SCADA data to increase AEP between 1–7%. The 14. h
ttps://www.weforum.org/agenda/2021/01/
how-to-accelerate-the-energy-transition-in-developing-
economies
14 GWEC.NETWind energy’s role on the road to net zero
For the wind industry, the Current applications range from Complementary technologies for forecasts global weighted average
advancement of cyber-physical intelligent factory cranes to remote energy flexibility capacity factors for onshore wind
networks will enable smarter and monitoring of wind turbines by With higher capacity factors will increase to 32-58% by 2050
more efficient grids, greater autonomous devices. A pilot project compared to other renewable and to 43-60% by 2050 for offshore
transparency in how we consume for predictive analytics has already energy sources, onshore and wind.16 The world’s first floating
and stronger civic engagement. The enabled wind turbines to supply the particularly offshore wind wind farm, the Hywind Scotland
expansion of an “Internet of Things” Danish system operator with provide greater energy project in the North Sea, already
will mean more assets along the balancing reserves at the end of reliability to emerging markets achieved 56% capacity factors in
value chain will become connected 2020, paving the way for more where power demand is growing, its first two years of operation.17
devices to be monitored in real-time flexible grid systems with large- especially if aggregated over large
and optimised for performance. scale renewables integration.15 geographical areas. IRENA Large-scale wind penetration will
require balancing and storage
technologies to maintain a cost-
Case study: Advanced monitoring systems to bring down costs
Provided by: Bonfiglioli
effective and secure transition.
Hybrid renewable tenders with
Bonfiglioli’s products are continuously optimised to the operating conditions of the main components of wind, solar and battery elements
improve wind turbine performance for both offshore and products and any malfunction is obtained through are now picking up around the
onshore applications, with a strong focus on size and algorithms that take into account fundamental aspects
world, from India’s Round-the-
weight optimisation. With a market share of over 35% in such as speed, temperature, relative humidity, operating
wind turbine yaw and pitch drives and supplies to leading torque and operating vibrations along the entire spectrum
Clock tenders to Germany’s
worldwide wind turbine OEMs, Bonfiglioli is a leader in of frequencies. This allows the operating conditions of “innovation auctions”. But storage
advanced solutions for the wind industry. Its team of critical components to be constantly monitored in real time technologies will need to be
experts creates, designs and produces advanced and to prevent unexpected downtimes by optimising competitive and scalable to
solutions to deliver tailor-made solutions, predominantly maintenance interventions, particularly relevant for disincentivise support of
led by a constant focus on LCOE reduction from both a offshore wind applications where early fault detection is polluting and inflexible energy
direct and indirect standpoint. critical. systems.
LCOE indirect reduction is sought after through an Already well accustomed to working with APQP
evolving condition monitoring system that enables methodology, specialising in APQP4Wind represents a This will be particularly critical for
customers to maximise productivity and return on distinctive element for the next generation of Wind accelerating renewables in
investment. Product reliability is undoubtedly an important products at the highest levels of quality, with a markets with weaker grids, which
parameter, but so is the ability to constantly check the standardised approach. already face challenges in voltage
health of the system and to plan maintenance operations. and disruptions from extreme
With a unique global footprint, Bonfiglioli can guarantee
Bonfiglioli provides an IOT range that includes sensors on
the manufacture of local components to ensure a flexible
the gearbox and motor and an edge computer capable of
and reactive supply chain. Ultimately a strong and global 15. h ttps://en.energinet.dk/About-our-news/News/2020/12/16/
conveying data and information to the customer’s and/or Milestone-Wind-turbines-can-balance-the-electricity-grid
operation set up guarantees the right focus towards
Bonfiglioli’s cloud, when a wireless connection is available. 16. https://irena.org/-/media/Files/IRENA/Agency/
adopting a common culture regarding the Lean concept at Publication/2019/Oct/IRENA_Future_of_wind_2019_summ_
All information relating to the RUL (Residual Useful Life), global level. EN.PDF
17. h ttps://www.equinor.com/en/news/2019-11-28-hywind-
scotland-data.html
GWEC | GLOBAL WIND REPORT 2021 15weather events. Cost-effective barriers in production costs, and supply chain logistics.
storage solutions will be needed transport, demand and Concurrently, the scaling-up of
for grid resilience. Batteries are competitiveness in the transport renewable energy capacity in
increasingly affordable for short- sector. At least 13 countries have a proximity to hydrogen plants will
duration application; since 2010, national hydrogen strategy in support hydrogen’s pathway to
prices have declined by two-thirds place, and dozens more are cost-competitiveness.
for stationary application (such as considering one or have
grid management) and by 90% for supported hydrogen projects. Pushing carbon-intensive assets
lithium-ion batteries in electric off the grid
vehicles.18 Back in 2016, the Electricity Looking ahead to COP26, one of the
Generating Authority of Thailand key set-pieces for the international
System transformation will also announced its 22 MW Lam negotiations will be the agreement
require long-duration storage Takhong wind project with a 1 MW of an effective global carbon tax
solutions (see: Enabling electrolyser to provide 10 hours of mechanism. This will provide a
technology: Power-to-X and green clean energy supply to a local crucial “push” factor to fossil
hydrogen). A recent study of building. Now, there are numerous fuels-dependent markets, going
California’s grid decarbonisation examples of green hydrogen beyond current carbon trading
found that it would require up to 55 projects under development, from schemes which allow entities to pay
GW of long-duration storage by NortH2 in Europe to Saudi Arabia’s to continue emitting carbon. It will
2045 - more than 150 times the Neom city. also send a strong signal on the
state’s current storage capacity.19 urgency of emissions reductions –
According to IRENA, around 95% while net emissions continue to rise
For the hard-to-abate sectors, such of hydrogen production today is annually, the UN has stated that
as steel production, chemicals, based on methane gas and coal.20 emissions need to rapidly decline
aviation, maritime shipping and Future deployment of hydrogen by 7.6% annually from 2020 to 2030
other forms of long-haul transport, must prioritise green hydrogen. to meet Paris Agreement targets.21
there are higher barriers to Its production is already
electrification. Investment in technically viable, and will Case studies provide evidence for
energy carrier technology will be require investment, learning the effectiveness of carbon pricing,
required, including in an efficient, curves and further deployment to from the UK’s “carbon price floor”
versatile and scalable storage reduce the costs of electrolysers for fossil fuels generators to the
solution like green hydrogen.
18. https://www.iea.org/news/a-rapid-rise-in-battery-innovation-is-playing-a-key-role-in-clean-energy-transitions
Green hydrogen is increasingly a 19. https://static1.squarespace.com/static/5b96538250a54f9cd7751faa/t/5fcf9815caa95a391e73d053/1607440419530/
jewel in the crown of national LDES_CA_12.08.2020.pdf
20. fi le:///C:/Users/joyce/Downloads/IRENA_Green_hydrogen_cost_2020.pdf
climate action policies, after 21. https://unfccc.int/news/cut-global-emissions-by-76-percent-every-year-for-next-decade-to-meet-15degc-paris-target-
decades of failing to take off due to un-report
16 GWEC.NETWind energy’s role on the road to net zero
reformed Emissions Trading Potential pinch points on growth
Scheme (ETS) in the EU. China’s in the decade ahead A dramatic scale-up of wind energy will require
newly launched national ETS will
be an important step on its road to
Looking beyond the urgent policy
interventions needed in the next
international cooperation on grid infrastructure and cross-
carbon neutrality and is set to few years, there are several other border interconnection, sustainable land and ocean
become the world’s largest challenges on the horizon.
emissions management scheme, management, technical standards, supply chain regulation,
with more than 2,200 power Addressing structural barriers environmental protection and more.
generators participating. in the Global South
The energy transition will adopt a
There are several challenges different rhythm and form in every sub-Saharan Africa and South 2019, according to GWEC Market
around gaining consensus on a country. But many countries share Asia.24 The economics of renewable Intelligence. The top six turbine
global carbon tax, relating to similar challenges in market energy, especially for utility-scale suppliers now control nearly
carbon inequities between design, where investment in wind wind projects, are tougher in areas three-quarters of the global market.
developing and developed energy is available but policy with limited customers on the grid. More than half of the turbines
countries, tax at the point of conditions undermine the viability installed in 2019 were in the
consumption versus production, of projects. Wind and solar energy While decentralised renewable Asia-Pacific region, strengthening
allocation of revenues and already became the cheapest solutions have been the least-cost the existing export hubs of China
appropriate pricing strategies. energy options for two-thirds of the response to date, an equitable and India, and giving rise to new
According to the IMF, a scheme global population by the end of the energy transition will require suppliers as East Asia and South
needs to begin with initially low last decade – for these areas, the systemic change. Expanding East Asia markets build their
prices (US$6-20/ton) and then issues centre on clearing market renewable energy in areas lacking offshore wind capacity.
rapidly increase on an annual basis barriers to get projects through the power calls for long-term political
to reach US$40-150/ton by 2050.22 development pipeline to grid economy planning, strong Similar market consolidation is seen
connection.23 regulation of the power sector, in the gearbox segment, where less
At the same time, there is mounting innovative financing models to than half of suppliers operational
agreement that fossil fuels are For the rest of the world, primarily incentivise private investment in eight years ago remain active. In
immensely under-priced when it countries in the Global South, renewables and redirection of blades, the number of independent
comes to the costs of production, renewable energy uptake faces fossil fuels subsidies to electricity and SME suppliers has dwindled
air pollution, global warming and structural barriers, such as networks and clean energy assets. due to inability to compete on cost,
environmental impact. A global energy access shortfalls and
carbon tax can provide a affordability gaps in the power An evolving global supply chain 22. https://www.imf.org/-/media/Files/Publications/
WEO/2020/October/English/ch3.ashx
significant lever to adequately sector. Worldwide, 770 million As the wind market expands to new 23. h ttps://www.bloomberg.com/news/articles/2019-08-27/
price emissions, incentivise people still lack electricity access, markets, the supply chain continues solar-wind-provide-cheapest-power-for-two-thirds-of-
globe-map
renewables uptake and redirect and this is set to shrink only to evolve. The number of wind 24. h ttps://www.iea.org/reports/sdg7-data-and-
revenues into green funds for moderately to 430 million people turbine suppliers has declined from projections/access-to-electricity; https://www.irena.
org/newsroom/articles/2019/Dec/SDG-7-Win-Win-for-
societal benefit. by 2030, with concentration in 63 OEMs in 2013 to 33 OEMs in Ending-Energy-Poverty-and-Protecting-the-Climate
GWEC | GLOBAL WIND REPORT 2021 17Wind energy’s role on the road to net zero
R&D investment and market recognition of common aims and major energy transition scenarios,
coverage. As a result, 10 blade mutual benefits. Take grid: wind energy has a responsibility to
producers account for 80% of the Integrated electricity systems are chart a clear path through the
total global blade supply today. not only a means for countries with choppy waters ahead. This will
low resource potential or system require a unified voice on issues of
The heightened competition for flexibility to gain access to clean global significance, from carbon
terrain, rare earths and technology energy; they are also a potential pricing to market design, from just
ahead raises the risk of price revenue stream for countries with transition to circular economy. This
volatility and trade tensions. This significant resource, where the also means strong representation in
can slow down cost reduction and dividends from cross-border the evolving debate on the nature
learning curves for the wind power trading can be re-invested of energy security.
industry, while inflating project for social value creation, such as in
capex. Concurrently, tariffs and public health or education. The EU Wind energy will power the road to
protectionism are now heating up currently has at least 82 net zero, but to get there by
around sectors like battery interconnectors across 22 borders, mid-century requires credible and
manufacturing – which need to and grid integration is also strong intensified efforts in the run-up to
grow at pace to support the energy in regions like Central America.25 In COP26 and ahead of the next
transition. other regions where clean energy deadline of NDCs in 2025. As a
demand is on the rise, like South priority in the near term, the wind
What does political agreement East Asia, interconnection is still in industry must work in tandem with
on net zero look like? the feasibility stage. its collaborators in the energy
A dramatic scale-up of wind transition to increase national
energy will require international It remains to be seen whether the ambitions for renewables and raise
cooperation on grid infrastructure global expansion of renewable awareness of their cross-cutting
and cross-border interconnection, energy will result in greater self- benefits for economies and people.
sustainable land and ocean sufficiency and trust-building among
management, technical standards, states or heightened vulnerabilities 2021 has begun with lofty
supply chain regulation, and competition. The former could expectations, marking the start of
environmental protection and unite a global alliance around the the UN Decade of Action and the
more. While the COP process ideals of carbon neutrality, while the Decade of Ocean Science for
provides a framework for latter could yield a realpolitik of Sustainable Development. It also
cooperation, much of the transactional cooperation which marks the beginning of the decade
multilateral alignment required for slows down the transition. which will determine whether we
the energy transition lies outside can reach net zero by 2050.
the scope of existing mechanisms. Conclusion
25. h
ttps://ec.europa.eu/energy/sites/ener/files/
As a mainstream energy source in documents/2nd_report_ic_with_neighbouring_
The fuel for this cooperation will be many parts of the world and in all countries_b5.pdf
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