Wind energy in Europe: Outlook to 2020 - September 2017 - France Energie Eolienne

 
Wind energy in Europe: Outlook to 2020 - September 2017 - France Energie Eolienne
Wind energy in Europe:
      Outlook to 2020
                September 2017
Wind energy in Europe: Outlook to 2020 - September 2017 - France Energie Eolienne
Wind energy in Europe:
   Outlook to 2020
        September 2017

        windeurope.org
Wind energy in Europe: Outlook to 2020 - September 2017 - France Energie Eolienne
This publication, the first in a series of annual reports, analyses how EU markets will develop in the
next four years, starting with an in depth analysis of the first half of 2017.
The outlook is based on WindEurope’s internal analysis and consultation with its members (surveys
with national associations and a dedicated workshop in June 2017).

Disclaimer
This publication contains information collected on a regular basis throughout the year and then
verified with relevant members of the industry ahead of publication. Neither WindEurope, nor its
members, nor their related entities are, by means of this publication, rendering professional advice
or services. Neither WindEurope nor its members shall be responsible for any loss whatsoever
sustained by any person who relies on this publication.

TEXT AND ANALYSIS:
WindEurope Business Intelligence
Aloys Nghiem
Daniel Fraile
Ariola Mbistrova
Tom Remy
EDITOR:
Iván Pineda

DESIGN:
JQ&ROS Visual Communications
PHOTO COVER:
Keith Arkins

ACKNOWLEDGMENTS
WindEurope acknowledge the contributions from the following companies and industry associations for their input to our
online surveys and workshop organised on June 28th, 2017 in Brussels:
AEE (ES), DWIA (DK), PSEW (PL), FEE (FR), BWE (DE), NWEA (NL), Elettricità Futura (IT), Eneco, Statoil, Enercon, Vestas, ERG, EDPR,
EON, Enel, Vattenfall, EnBW, GE, RES, Norton Rose Fulbright, Axpo.

WindEurope also acknowledges the kind cooperation of the following associations and institutions:
Austrian Wind Energy Association - IG Windkraft, Belgian Offshore Platform, EDORA asbl, ODE-Vlaanderen vzw, Bulgarian Wind
Energy Association, Czech Wind Energy Association - CzWEA (CSVE), Estonian Wind Power Association - EWPA, Finnish Wind Power
Association (Suomen Tuulivoimayhdistys Ry), VDMA Power Systems, Hellenic Wind Energy Association - ELETAEN, Hungarian Wind
Energy Industry Association, Irish Wind Energy Association - IWEA, Associazione Nazionale Energia del Vento - ANEV, Latvian Wind
Energy Association, Lithuanian Wind Power Association - LWPA, Associação Portuguesa de Energias Renovaveis - APREN, Romanian
Wind Energy Association - RWEA, Svensk Vindenergi (Swedish Wind Energy Association), Renewable UK.
Wind energy in Europe: Outlook to 2020 - September 2017 - France Energie Eolienne
CONTENTS

                EXECUTIVE SUMMARY ..................................................................................................... 5

           1. THE EUROPEAN WIND ENERGY MARKET TODAY ............................................. 9

                1.1 Market evolution............................................................................................................ 9
                1.2. First half of 2017 ........................................................................................................... 10

           2. MID-TERM WIND ENERGY MARKET OUTLOOK.................................................... 18

                2.1 Introduction..................................................................................................................... 18
                2.2 Policy landscape ........................................................................................................... 18
                2.3 Market outlook................................................................................................................ 25
                       2.3.1 Central Scenario.................................................................................................... 27

                       2.3.2 Low Scenario ......................................................................................................... 30

                       2.3.3 High Scenario.......................................................................................................... 31

                2.4 Investment outlook.................................................................................................... 32
                2.5 Global wind energy market outlook...................................................................... 34
                2.6 Renewable energy sources outlook...................................................................... 35
                2.7 Wind energy generation............................................................................................ 36

           3. TECHNOLOGY TRENDS .................................................................................................... 38
Wind energy in Europe: Outlook to 2020 - September 2017 - France Energie Eolienne
EXECUTIVE
    SUMMARY
    2020 will mark an important milestone for the European Union as Member States will be tested on their climate change
    and energy commitments. Wind energy will make a significant contribution to achieving these commitments in the
    power sector, allowing many Member States to reach their targets in a cost-effective way and to continue their energy
    system transformation.

    Deployment in 2017-2020

    With an average of 12.6 GW per year, volumes of new de-      surpassing hydro power and becoming the largest source
    ployment of wind energy capacity look set to remain fairly   of renewable electricity. We expect Denmark to meet
    strong through to 2020, according to WindEurope’s Cen-       over half of its demand with wind energy and Germany
    tral Scenario. We expect 2017 to mark a new record high      almost 30%. Ireland, Portugal, Spain and the UK will follow
    in annual installations. We expect 50 GW to be installed     with respectively 29, 27, 24 and 21%.
    in the 4 years of 2017-2020. We expect this would bring
    the EU to an accumulative installed capacity of 204 GW.      New installations will remain relatively strong until the
    We expect this 50 GW additional capacity to represent        end of 2020, but policy uncertainty and lack of ambition
    over half of all new renewable capacity in the EU over the   for the post-2020 climate and energy framework could
    4-year period, well above solar PV bioenergy and hydro       have a significant negative impact on the sector. Only a
    power.                                                       handful of Member States have provided visibility and
                                                                 regulatory certainty. With only 5 countries among the EU-
    With over 200 GW of installed capacity, wind energy          28 announcing auctions plans, there is a lack of certainty
    could meet 16.5% of Europe’s electricity needs by 2020,      on revenue stability for investors.

5   Wind energy in Europe: Outlook to 2020
Wind energy in Europe: Outlook to 2020 - September 2017 - France Energie Eolienne
Executive summary

    FIGURE A
    Wind energy market outlook to 2020 in the EU

         18

         16
         14

         12

         10
    GW

         8

         6

         4

         2
         0
              2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
                                      Onshore        Offshore         Low          High         Central

                                                                                                        Source: WindEurope

    Market concentration will remain high, with Germany, the        The offshore market will grow at a higher pace than the
    UK, France, Spain and the Netherlands installing most of        onshore market. With average new installations of 3.1
    the capacity. Germany alone will represent a third of all       GW/year, offshore wind will represent about one quarter
    the installed capacity, with a total of 16.5 GW. The second     of the total new installations (compared to a 15% share in
    largest market will be the UK, with two thirds of its new       the last 4-year period 2013-2016). The offshore market
    installations offshore. France will be third in the list with   will concentrate mainly in the UK with 5.2 GW, represent-
    potential installations of up to 6.5 GW.                        ing 42% new grid-connected capacity. Another 4 countries
                                                                    will see offshore installations: Germany (3.5 GW), Belgium
    The onshore market will remain stable with a slight de-         (1.5 GW), the Netherlands (1.4 GW) and Denmark (1.0
    crease towards the end of the 4-year period, mainly due         GW). In 2019, annual installations in offshore will reach
    to lower planned activity in Germany. However, we expect        to over 4 GW.
    Spain to experience radical growth after several years of
    inactivity; following the recent tenders, the industry is
    gearing up to install 4.1 GW of capacity.

6   Wind energy in Europe: Outlook to 2020
Wind energy in Europe: Outlook to 2020 - September 2017 - France Energie Eolienne
Executive summary

    In the first half of 2017

    In total, we estimate that developers have installed across                During this period, 11 EU Member States have announced
    the EU-28 about 6.1 GW of capacity in the first half of                    new wind energy investments totalling €8.1bn for 4.1 GW
    2017: 4.8 GW onshore and 1.3 GW offshore. Activity has                     of new assets. Germany was the biggest investor, with
    been concentrated in Germany, UK and France with a                         over €4.5bn and 1.8 GW of new capacity financed. Invest-
    share of 82%. 15 countries out of the EU-28 saw no in-                     ment activity in the country accounted for 53% of the Eu-
    stallations for this period while only 8 countries surpassed               ropean market. With no offshore wind projects reaching
    the 100 MW mark. The activity in the offshore market is                    Final Investment Decision in the UK during this period,
    2.6 times higher than for the first half of 2016, with 6 wind              investments dropped to a record low below €1bn.
    farms bringing additional capacity in 4 countries (Germa-
    ny, the UK, Belgium and Finland).

    FIGURE B
    Investments in new wind energy assets per country during first half 2017, in the EU1

           4,500                                                                                                             4,500

           4,000                                                                                                             4,000

           3,500                                                                                                             3,500

           3,000                                                                                                             3,000

           2,500                                                                                                             2,500
    mEUR

                                                                                                                                     MW
           2,000                                                                                                             2,000

            1,500                                                                                                            1,500

            1,000                                                                                                            1,000

             500                                                                                                             500

                 0                                                                                                           0
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                                Total new investments (mEUR)                   Total new capacity financed (MW)
                                                                                                               Source: WindEurope

       1.    Projects reaching First Investment Decision.

7   Wind energy in Europe: Outlook to 2020
Wind energy in Europe: Outlook to 2020 - September 2017 - France Energie Eolienne
Executive summary

                                               New added                                                    50-60%
ADDITIONAL                                                                                                                    WIND ENERGY

50 GW
                                               capacity                           Share
                                               (2017-2020)
                                                                                                            40-50%            COULD COVER

                                                                                                                              16.5%
                                                                                 of wind
                                                                               in power                     30-40%
                                                GW                             demand
IN THE EU IN THE NEXT                                                                                       20-30%
                                               Cumulative
FOUR YEARS, TOTALING                           installed                                                    10-20%            OF EU ELECTRICITY
204 GW in 2020                                 capacity
                                               (2020)                                                       0-10%
                                                                                                                              DEMAND IN 2020

                                                                                                                            0.8

                                                                                                                            1.5
                                                                                                 1.6
                                                                                                 6.5

                                                                                                                                  0.3
                                                                                                                                  0.3
                                                                                                                                    0
                                                                                  16.5                                             0.06
                                                                         1.5                                                  0.1
                                                                         5.2                                                 0.4
                                 1.1             7.7
                                                                                   50
                                 2.8              14
                                                                                                                    0.8
                                                                   3.1
                                                                   4.3                                              5.7

                                                             2.3

                                                             2.3     0.04                          0.1
                                                                     0.05                          0.2               0
                                                                                                                    0.03
                                                       6                                          0.8                  0
                                                                                                  2.6                                     0
                                                                                                                      0.3
                                                       12                                                                                 3
                                                                                                   0
                                                                                                       0.3
                                                                                                  0.03
                                                                                                       0.4
                                                                                           1.6
                                                                                                                                              0
                                 3.7                                                    9.2                                                   0.6
             0.4
                                 23
             5.3

                                                                                                                                    0.8

                                                                                                                                    2.3

                                                                                                       0.05                   0
                                                                                                        0                    0.1
      8      Wind energy in Europe: Outlook to 2020

  WindEurope's Central Scenario
Wind energy in Europe: Outlook to 2020 - September 2017 - France Energie Eolienne
1.
    THE EUROPEAN
    WIND ENERGY
    MARKET TODAY
    1.1 MARKET EVOLUTION
    At the end of June 2017, the European Union had a total        5 GW installed. Seven additional EU countries have over 1
    of 159.5 GW of wind power capacity installed (145.5 GW         GW of installed capacity: Austria, Belgium, Finland, Greece,
    onshore and 14.0 GW offshore). Germany remains the EU          Ireland, the Netherlands and Romania.Annual wind power
    Member State with the largest installed capacity, followed     installations in the EU have increased more or less stead-
    by Spain, the UK, France and Italy. Four other EU countries    ily over the past 11 years from 6.6 GW in 2005 to 12.5
    (Sweden, Denmark, Poland and Portugal) have more than          GW in 2016 at an average annual rate of 11 GW per year.

    FIGURE 1
    Annual wind energy installations 2005-2017

         14                                                                                                   180
                                                                                         3      1.6
         12
                                                                  1.2    1.6    1.5                           160
                                             0.6   0.9
                                                                                                              140
         10                                               0.8
                                                                                                                    Cumulative (GW)

                             0.3                                                                              120
                                     0.3
         8            0.1                                                                                     100
               0.1
    GW

                                                                                                       1.3
         6                                                                                                    80
                                                                                                              60
         4
                                                                                                              40
         2     6.5    7.1    8.6     8.1     9.7    9     8.9     10.9   10     10.5    9.8    10.9    4.8
                                                                                                              20
         0                                                                      0
              2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 H1
                               Onshore         Offshore           Cumulative
                                                                                                       Source: WindEurope

9   Wind energy in Europe: Outlook to 2020
Wind energy in Europe: Outlook to 2020 - September 2017 - France Energie Eolienne
The European wind energy market today

     1.2 FIRST HALF OF 2017
     During the first half of 2017, project developers installed           energy installations in this period, while eight countries
     6.1 GW of wind energy in the EU; 4.8 GW onshore and                   surpassed the 100 MW mark.
     1.3 GW offshore. 15 out of 28 countries had no wind

     FIGURE 2
     Wind energy installations in the first half of 2017

          3.5

            3    0.6

          2.5

            2
                 2.3
                          0.5
     GW

          1.5

            1
                          1.2
          0.5
                                          0.2
                                  0.5             0.2       0.2
                                          0.1                        0.1      0.1     0.1     0.1    0.05     0.02   0.02     0.01
            0

                                                           Onshore          Offshore                          Source: WindEurope

     Germany installed almost half of the EU’s new onshore                 in Poland (6 MW), Sweden (23 MW), Finland (50 MW),
     wind energy capacity with 2.3 GW in this period. The UK               Greece (46 MW), and Portugal (0 MW).
     followed with close to 1.2 GW, representing almost one
     quarter of the total installations. This high volume of in-           Bulgaria, the Czech Republic, Estonia, Cyprus, Hungary,
     stallations in the UK was due to the end of the Renew-                Latvia and Romania have yet to install a single MW since
     able Obligation Certificate’s grace period in March 2017.             2016.
     Developers rushed to complete projects before this dead-
     line. With 492 MW of new installed capacity in H1 2017,

                                                                              82%
     France is on track for another good year of installations.
     These three countries accounted for more than 80% of
     the EU’s onshore installations, highlighting a very high
     market concentration.
                                                                              OF THE NEW WIND CAPACITY
     12 more countries had new onshore installations in the
     first half of the year. Italy and Ireland installed 187 MW
                                                                              IN THE FIRST HALF OF 2017
     and 159 MW respectively. Both countries kept a constant                  WAS INSTALLED IN
     installation rate, as in 2016. By contrast, the first half of
     2017 represents a significant slowdown in installations                  3 COUNTRIES

10   Wind energy in Europe: Outlook to 2020
The European wind energy market today

     FIGURE 3
     Onshore wind installations in the first half of 2017. Total 4,775 MW

                             Netherlands                       Others*
                             88 MW                             206 MW
                             2%                                2%
                             Austria
                             107 MW
                             2%
                             Ireland
                             159 MW
                             4%
                             Italy
                             187 MW
                             4%               France                   Germany
                             Belgium          492 MW                   2,281 MW
                                              10%                      48%
                             105 MW
                             2%
                                                       UK
                                                       1,151 MW
                                                       24%

                             *Others: include Denmark (60 MW), Finland (50 MW),
                             Greece (46 MW), Sweden (23 MW), Croatia (21 MW) and Poland (6 MW)

                                                                                                  Source: WindEurope

                                                                     Germany connected 48% of the net capacity, largely with
                                                                     the commissioning of the Veja Mate wind farm. The Unit-

     245                                                             ed Kingdom connected 38% of the EU’s capacity, mainly
                                                                     thanks to the completion of the Burbo Bank extension
                                                                     wind farm. Belgium represented 12% of the total share
                                                                     and Finland 2% with 1 project in each country.
     NEW GRID -CONNECTED
     OFFSHORE WIND TURBINES                                          84% of the installations were in the North Sea, 15% in the

     IN 6 WIND FARMS                                                 Irish Sea and 1% in the Baltic Sea. Whilst the latter had
                                                                     very little capacity, construction works started at the 350
                                                                     MW Wikinger offshore wind farm.

     Offshore wind in Europe saw a net 1,344 MW of addition-
     al installed grid-connected capacity from 1 January to 30
     June 2017. This was 2.6 times the amount installed over
     the same period last year. This new capacity came from
     six offshore wind farms across four countries and totalling
     245 grid-connected turbines. 189 new foundations were
     installed and 294 turbines were erected.

11   Wind energy in Europe: Outlook to 2020
The European wind energy market today

     FIGURE 4
     Offshore wind country split and grid connected farms in H1 of 2017

     Nobelwind (Belwind II)              Pori Tahkoluoto 1                  Nordsee One    Sandbank
     165 MW                              21 MW                              72 MW          52 MW

                                                                  Finland
                                                                  21 MW
                                                                  2%
     Race Bank                                                                                      Dan Tysk
     78 MW                                          Belgium                                         14 MW
                                                    165 MW
                                                    12%
                                                                                                    Veja Mate
                                                                    Germany                         402 MW
                                                                    641 MW
                                                                    48%
     Dudgeon East                                 UK
     240 MW                                       518 MW
                                                  38%

     Burbo Bank Extension
     200 MW

                                                                                          Source: WindEurope

12   Wind energy in Europe: Outlook to 2020
The European wind energy market today

     FIGURE 5
     Summary of work in offshore wind farms between 1st January and 30th June 2017

                                        160                                                                                          8

                                        140                                                                                          7
     Number of foundations / turbines

                                        120                                                                                          6

                                                                                                                                         Number of wind farms
                                        100                                                                                          5

                                        80                                                                                           4

                                        60                                                                                           3

                                        40                                                                                           2

                                        20                                                                                           1

                                          0                                                                                          0
                                                     Finland           Belgium         United                   Germany
                                                                                      Kingdom

                                              Number of foundations installed            Number of turbines erected
                                              Number of turbines grid connected          Number of wind farms

                                                                                                                      Source: WindEurope

     Out of the 245 turbines grid-connected in the first half                     Offshore wind farms are generally owned by multiple par-
     of 2017, 58% were provided by Siemens, 31% by Senvi-                         ties, due to the large investments needed and the need to
     on and 11% by MHI Vestas. Wind turbine capacity rating                       diversify risk. For the first half of the year, 18 owners have
     ranged between 4.2 MW and 8 MW, with an average of                           been involved in the six wind farms that connected wind
     5.8 MW. This is a 39% increase in size over the same peri-                   turbines to the grid.
     od last year. Only six out of the 16 sites under construction
     in 2017 will use turbines rated below or equal to 5 MW.                      Power producers own almost half (49%) of the capacity
     Seven sites will use 6 MW turbines, one site will use 7 MW                   connected to the grid in H1 2017. However, infrastructure
     turbines and two sites will use 8 MW turbines. 25 8 MW                       and pension funds are steadily increasing their participa-
     wind turbines have been grid-connected already at the                        tion, accounting this for 38% in the first half of 2017, com-
     Burbo Bank extension wind farm in H1 2017.                                   pared to 25.2% in the first half of 2016.

                                                                                  Northland Power connected the most capacity in the
     THE AVERAGE SIZE OF                                                          first half of 2017, 142 MW, representing 10.9%, followed
                                                                                  by DONG Energy with 139 MW (10.3%). Laidlaw Capital
     GRID-CONNECTED TURBINES
                                                                                  Group (10.2%), Siemens (9.9%) and Copenhagen Infra-
     IN THE 1ST HALF OF 2017 WAS                                                  structure Partners (7.6%) completed the top five owners

     5.8 MW
                                                                                  in new additional capacity.

13   Wind energy in Europe: Outlook to 2020
The European wind energy market today

     FIGURE 6
     Offshore wind developers’ share of new grid connected capacity between 1st January and 30th June 2017

                                                             % Of new installed capacity
                                        0%    1.5%     3%       4.5%      6%       7.5%     9%       10.5%   12%
                  Northland Power

                      DONG Energy

            Laidlaw Capital Group

                             Siemens
     Copenhagen Infraestructure
                      Partners
                         Statoil

                              Masdar

                            Statkraft                                                      Corporate
                                                                                           4%
                            Parkwind

                          Sumitomo

           Kirkbi A/S (Lego group)

                                  PKA
                                                                     Power                   Financial
                 Macquarie Capital                                   Producer                Services
                                                                     49%                     34%
                           Vattenfall

                            Meewind

             Stadtwerke München                                                         Industrial
                                                                                        Player
                               Innogy                                                   10%

            Suoemn Hyötytuuli Oy

                                        0     20       40       60       80       100       120      140     160
                                                        New installed capacity owned in MW

                                                                                               Source: WindEurope

14   Wind energy in Europe: Outlook to 2020
The European wind energy market today

     Investment trends

     The wind energy industry generated new investments           investment activity. In addition to the financing of new
     of €8.1bn during the first half of 2017. A total of 4.1 GW   wind farms, the first half of 2017 also saw €3.2bn in refi-
     reached Final Investment Decision (FID) in 11 Member         nancing transactions. The sector generated a total invest-
     States, with onshore wind projects driving most of the       ment of €11.3bn.

     FIGURE 7
     Wind sector investments during H1 2017 in the EU. Total €11,351m

                     Refinancing                                                           Construction:
                     transactions:                                                         Offshore wind
                     Onshore and                                                           projects
                     offshore wind                                                         €2,920m
                     € 3,209m

                                                          Construction:
                                                          Onshore wind
                                                          projects
                                                          €5,222m
                                                                                            Source: WindEurope

     During the first half of 2017, the European market has

                                                                        53%
     remained very uneven, with only 11 EU Member States
     announcing new wind energy investments during this pe-
     riod; a trend that follows that of previous years.

     Germany was the biggest investor, with over €4.5bn and             OF NEW INVESTMENTS WERE
     1.8 GW of new capacity financed. Investment activity in
     the country accounted for 53% of the European invest-
                                                                        IN GERMANY
     ments market.

     With no offshore wind projects reaching Final Investment
     Decision in the UK, investments in this country dropped to
     a record low of €784 million.

15   Wind energy in Europe: Outlook to 2020
The European wind energy market today

     FIGURE 8
     Wind investments per country during H1 2017 in the EU

            4,500                                                                                                     4,500

            4,000                                                                                                     4,000

            3,500                                                                                                     3,500

            3,000                                                                                                     3,000

            2,500                                                                                                     2,500
     mEUR

                                                                                                                              MW
            2,000                                                                                                     2,000

            1,500                                                                                                    1,500

            1,000                                                                                                     1,000

             500                                                                                                      500

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                            Total new investments (mEUR)              Total new capacity financed (MW)
                                                                                                       Source: WindEurope

     Only three offshore wind projects, totalling 834 MW in           the first half of 2017 for an estimated investment value of
     Germany, reached Final Investment Decision (FID) during          €2.9bn. This compares to €14bn and 3.7 GW in new assets.

     FIGURE 9
     Offshore wind projects reaching Final Investment Decision during H1 2017

                                                                          EnbW Hohe See
                                                                          492 MW project capacity
                                                                          € 1,800m project cost

                          €2.9bn new
                          investments                                     Trianel Windpark Borkum II
                                                                          203 MW project capacity
                          834 MW new
                                                                          € 800m project cost
                          capacity financed

                                                                          OWP Albatros
                                                                          112 MW project capacity
                                                                          € 320m project cost

                                                                                                          Source: WindEurope

16   Wind energy in Europe: Outlook to 2020
The European wind energy market today

     The equity mix continues to bring in more corporates,           surance, infrastructure and private equity funds, are grad-
     financial institutions and, in particular for offshore wind,    ually increasing their participation in both onshore and
     overseas investors. However, power producers still lift         offshore wind markets. During the first half of 2017, they
     most of the equity requirements, especially through the         acquired 40% of the divested wind capacity.
     development phase. Finance houses, such as pension, in-

     FIGURE 10
     Project acquisition activity by type of investor during H1 2017 in the EU

                                                                    Pension funds
                                                                    338 MW
                                                                    8%

                  Infrastructure funds
                  422 MW
                  10%

                  Diversified financial
                  services
                  892 MW                                                  Power producers
                  22%                                                     2,364 MW
                                                                          57%

                  Independent power
                  producers
                  113 MW
                  3%
                                                                                                Source: WindEurope

17   Wind energy in Europe: Outlook to 2020
2.
     MID-TERM WIND
     ENERGY MARKET
     OUTLOOK
     2.1 INTRODUCTION                                                   Towards market-based support schemes

     The mid-term wind energy market outlook analy-                     Following the guidance of the European Commission, a
     ses the likely development of wind power capacity in               large number of Member States have already moved to-
     the EU Member States in the next four years. It con-               wards feed-in-premiums, limiting the use of feed-in-tar-
     sists of three scenarios reflecting the potential de-              iffs to small installations and emerging renewable energy
     velopments in EU regulatory frameworks, national                   technologies. For instance, in Germany only installations
     policies, project development timelines (see Table 1)              below 100 kW are eligible for feed-in-tariffs. A few coun-
     and the performance of the wind industry in winning                tries such as Finland and Ireland still remain on feed-in-tar-
     capacity in upcoming technology-neutral auctions.                  iff systems but will need to update their support scheme
                                                                        before the end of 2017. Green certificates is another mar-
                                                                        ket-based instrument supported by the European Com-
     2.2 POLICY CONTEXT                                                 mission. However, having already been abandoned by
                                                                        Poland and the UK for new projects, green certificates use
     In 2014 the European Commission introduced new rules               is limited to Sweden, Norway and Belgium.
     on State-Aid for renewable energy sources. Those changes
     are taking effect today with a shift to competitive tender
     mechanisms and the use of market-based instruments.
     The European institutions are currently discussing the
     policy framework for the post-2020 period, mainly with
     the revision of the Renewable Energy Directive and a sig-
     nificant reform of Energy Market Design rules (the Clean
     Energy Package)2.

       2.   https://ec.europa.eu/energy/en/news/commission-proposes-new-rules-consumer-centred-clean-energy-transition

18   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

                Considerations on projects’ development timeline

                Wind energy projects are characterised by a significant time lapse between the moment a promoter is granted a support
                mechanism (e.g. tender results announcement) and the moment the wind farm starts to operate (grid connection).
                In the case of onshore wind projects, this time is approximately two years, while for offshore wind projects it can take
                around five years. The overall project timeline is much longer: this includes site investigation, resource assessment, envi-
                ronmental impact assessments and other technical studies and consultations with local communities and other admin-
                istrative procedures. This is why it is crucial to have good visibility on upcoming tenders and the regulatory framework.

                Once a support mechanisms is granted or the capacity is awarded to the developer, the time allowed to realise projects is
                largely dependent on the regulatory framework. For instance, in Germany, large developers have a 30-month implemen-
                tation deadline while community projects are allowed to connect their turbines to the grid up to 54 months after auction
                allocation. This might in principle extend the time gap between auction results and new grid-connection installations.

                Considering these timescales, the offshore volumes presented in this outlook (new installations grid-connected between
                2017 and 2020) are therefore based on support allocation that has already taken place. The accuracy is thus very high.
                For onshore, the installations in 2017, 2018 and 2019 are mostly based on the support and volumes allocated before
                the end of 2016. However, there is a degree of uncertainty for installations in 2019 and 2020 that could be affected by
                upcoming planned tenders (Spain and France) and by tenders not yet announced at the time of publication.

                For the investment outlook, onshore projects Final Investment Decision (FID) takes places 1 year before grid connection
                while the FID timescale for offshore wind projects is based on individual project analysis (from 2 to 3 years).
Phase

                                             DEVELOPMENT                              PRE-CONSTRUCTION                      CONSTRUCTION

                                    Environmental          Grid & building                  Site conditioning,               Construction
                                    planning               permits,                         detailed design,                 and comissioning,
Activity

                                    & permitting,          site layout,                     procurement,                     grid connection.
                                    feasibility studies,   technology review.               financial close.
                                    wind assessment.

                                             3-5 years                                     2-4 years                     2 years
                      Offshore
Timing

                     Onshore

                                             2-5 years                                      1-2 years                       < 1 year

                                                                  Support
                                                                                         FID*
                                                                  allocation

           19   Wind energy in Europe: Outlook to 2020

            *First investment decision
Mid-term wind energy market outlook

     2020 RES targets setting the pace

     As part of the European objectives for 2020, the binding        These countries will need to accelerate the pace of in-
     targets for renewable energy will have a significant influ-     stallations to fulfil their commitments. Poland is the only
     ence on wind energy installations for the next four years.      country among the four aforementioned without any
     In Eastern Europe, most countries have already achieved         clear plan/objective to the reach their target.
     their targets, which will lead to low installations in the
     coming years. Romania, which was once a leading country         Other countries, such as Sweden and Denmark, have
     for the Eastern European market, will see no more new           achieved or are well on track to reaching their 2020 tar-
     installations before the end of 2020.                           get but will continue to install more wind capacity beyond
                                                                     2020. These countries have set national energy plans with
     By contrast, some countries are rushing to ensure they          concrete renewable energy goals. As an example, Den-
     reach their objectives in the years leading into 2020. This     mark is aiming to go for 100% renewable power by 2035,
     is the case of Spain, which after a few years of no activity,   which forces a renewable trajectory to 2020 that goes
     has recently auctioned 8 GW of new renewable capacity           far beyond the European targets. Sweden, which plans
     (4.1 GW of wind energy awarded).                                to reach 100% of renewable electricity by 2040, will also
                                                                     need to overshoot its 2020 European target.
     France, Ireland, the Netherlands and Luxembourg are
     likely to miss their targets, while Hungary and Polan have
     hindered any additional renewable energy deployment.

20   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

 Policy Outlook
     Positive
     Neutral
     Negative

2020 RES target
     Achieved

     On track

     Not on track

21     Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     TABLE 2
     Summary of wind energy policy landscape per Member State

              COUNTRY                                         UPCOMING DEVELOPMENTS
      Austria                  Changes in the Green Energy Act will unlock at least 350 MW in the current pipeline
                               Large development offshore but some risks of retroactive changes on the already awarded
      Belgium
                               support schemes
      Bulgaria                 No more incentives to build new wind assets as 2020 RES target is achieved

      Czech Republic           Wind installations to remain subject to Ministry of Industry approval
                               The scheme for onshore wind expires in February 2018. One year stand still is unavoidable until
      Denmark
                               new scheme introduced
      Estonia                  Incentives to remain with a yearly production cap at 600 GWh despite reaching their RES target.

      Finland                  FIT applications to end once the capacity limit of 2,500 MVA is exceeded

      France                   Government objective sets a realistic objective of 15 GW by 2018 and at least 25.8 GW by 2023
                               Full switch to tenders system both for onshore and offshore with good visibility and long term
      Germany
                               certainty

      Greece                   Switch to auction system with Feed-in-Premium as of 2018

      Hungary                  No incentives to build new wind assets as 2020 RES target is achieved

      Ireland                  Ongoing discussions regarding a new incentive scheme that will replace REFIT II

      Italy                    Auction system to remain but no planned auctions yet communicated
                               Government sets a new target of 30% of RES in final energy consumption by 2020 (beyond their
      Lithuania
                               original 2020 obligation)
                               Projects still supported by the SDE+ (budget auction) until 2020. Target of 6 GW of onshore wind
      Netherlands
                               by 2020 unlikely to be met. Offshore target of 4.5 GW by 2023
                               Current legislation highly restricts installations. Ongoing Parliament discussion to improve the
      Poland
                               situation
      Portugal                 No more incentive to build new wind assets as 2020 RES target is achieved

      Romania                  No more incentive to build new wind assets as 2020 RES target is achieved
                               Revival of the market after three consecutive tenders in 2016-2017. Investment conditions
      Spain
                               remain poor as retroactive changes are allowed in the regulation
                               Target of addition 18 TWh RES electricity by 2030 but exponential trajectory with strong growth
      Sweden
                               only at the end of the period
                               End of the Renewable Obligation Certificate system. Offshore wind still supported through
      UK
                               auctions

22   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     Tenders leading the pathway for market growth

     The use of competitive bidding processes (e.g. tenders)       producers need to reimburse the government if whole-
     as from January 2017 is another condition established         sale market prices are above the guaranteed strike price
     by the European Commission in order for Member                (e.g. contracts for difference in the UK). In other cases,
     States to comply with state-aid regulation. Prior to 2017,    governments provide support to the investment (instead
     some governments had already implemented compet-              of operational support) calculated as a discount of the in-
     itive auctions to select wind energy projects. After the      itial investment to ensure a fixed internal rate of return
     first offshore Danish auction in 2005 (which lead to the      (e.g. Spain). Some of the tenders are based on pay-as-
     wind farm Horns Rev 2), many offshore projects have           clear allocation (all producers receive the same amount,
     been awarded through auctions (in the UK, the Nether-         resulting from the highest awarded bidder), while others
     lands, Germany, France). Portugal was the first European      are based on pay-as-bid (e.g. offshore tender in Germany
     country to use competitive auctions to award onshore          with large spread between the winners).
     projects, but remained an isolated case until 2013 when
     Italy introduced this system. Until 2017, less than 10 GW     In addition, the timeline for project realisation is very dif-
     were allocated to onshore wind via competitive auctions,      ferent between onshore and offshore wind projects. Ten-
     mainly in the UK, the Netherlands, Italy and Portugal.        ders for offshore wind energy projects awarded in 2017
                                                                   need to be commissioned by 2025 at the latest, while
     Between 2017 and 2020, more than 27 GW are already            onshore projects awarded the same year will need to pro-
     set in the plans of five countries for auctions includ-       duce electricity by 2019. For offshore projects, the loca-
     ing wind energy. Most of this capacity will be auctioned      tion (e.g. distance to shore, depth of the sea basin) is also
     in 2017, with more than 12 GW planned. We expect              a determining factor for prices.
     other countries to make additional announcements.

     The evolution of tender results for wind energy in Eu-
     rope has recently shown drastic cost reductions. Howev-

                                                                                          27 GW
     er, comparison between results is complex, owing to the
     widely differing range of tender designs. For instance, the
     price can be guaranteed for 10 or 20 years, or for a fixed
                                                                      AT LEAST                                                OF
     number of full-load hours (e.g. Denmark). In some cases,         PLANNED AUCTIONS BETWEEN

                                                                      2017 AND 2020

23   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

       FIGURE 13
       Announced tenders until 2020

                                                       2017                                                      2018                                        2019                          2020

                                                                           500 MW
                                                                                                               700 MW
                                               800 MW                      1,000 MW
                                                                                                700 MW                                            700 MW                              1,000 MW
                            644 MW                         1,000 MW                                                          200 MW
                                                                                                               500 MW                                          700 MW                                   950 MW
                                                                          Unknown
                                April          July            October      date                 April         August        November                  May       November                  June
                                                                                                                                                                                                                  18.5
     Onshore                                                                                                                                                                                                      GW
                        March            May          August         November             February       May            November            February     August                 February          October
                                                      1,128 MW                   500 MW                             700 MW                                             500 MW
                                                                                                     200 MW                        500 MW                500 MW                                   950 MW
                                                                                                                                                                       700 MW
                                        2,979 MW
                                                               Budget                                                              700 MW                700 MW
                                                               auction

                                               1,550 MW                                                                            700 MW                         700 MW
                                                                                700 MW
                                                                                             March
                                                         September                                                                                                                                               8.4
     Offshore                                                                                                                                                                                                    GW
                                         May                             Unknown                                              Unknown                        Unknown
                                                                           date                                                 date                           date

                                                                                                     1,550 MW
                                                                  3,196 MW

                        Technology neutral
                        Technology specific                                                                                                                                            Source: WindEurope

24     Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

      FIGURE 14
      Results of wind energy tenders 2013-2017. Transmission connection costs are only included in UK offshore project. Price
      range refers to tenders with pay-as bid prices or several tenders happening on the same date

                200
                180
                160
                140
      € / MWh

                120
                100
                80
                60
                40
                20
                0
                     2013           2014                   2015                    2016                  2017              2018

                                       Price range       Onshore        Offshore
                                                                                                              Source: WindEurope

      2.3 MARKET OUTLOOK
      By 2020, wind energy in Europe will reach between 195 GW           EU annual installations are expected to decrease in 2018
      (Low Scenario) and 217 GW (High Scenario) of cumulative            due to a slow-down in Germany and the UK. We expect
      installed capacity. WindEurope expects 204 GW in its Cen-          a revival in 2019 with a record year for offshore wind in-
      tral Scenario with an average annual market of 12.6 GW.            stallations and a massive amount of Spanish onshore in-
                                                                         stallations connecting to the grid as a result of the 4.1 GW
      For many countries in Europe, 2017 is a transitional year          awarded in the two tenders in 2017.
      to new support schemes and tender mechanisms. There-
      fore, it is likely to see a peak of installations as developers    However, the onshore market will experience a general
      rush to complete their projects in order to secure morat-          slow-down in annual installations towards 2020, main-
      tractive conditions under the old existing rules.                  ly due to lower planned activity in the German onshore
                                                                         market.

                                                                         While there is a good visibility on future projects in Spain,

     2017
                                                                         Germany, the Netherlands and France, the uncertainty on
                                                                         the time to deliver them will be a crucial factor that could
                            IS EXPECTED                                  either accelerate (+5 GW in the High Scenario) or slow
                                                                         down (-3.5 GW in the Low Scenario) the market activity.
     TO BE A NEW               RECORD                                    In addition, the deployment of new tenders in Poland and
                                                                         the UK, could add new potential installations after 2019
     YEAR IN WIND INSTALLATIONS                                          (+2.5 GW in the High Scenario). Finally, some countries,
                                                                         including Ireland, Finland and Greece still need to define
                                                                         their new support schemes to comply with the EU State-
                                                                         Aid guidelines. Depending on how soon this happens the
                                                                         market could be up (+2.5 GW in the High Scenario) or
                                                                         down (-0.5 GW in the Low Scenario).

25    Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     The offshore market will grow at a higher rate than today.   Uncertainties included in the Low and High Scenarios are
     With an average 3.1 GW/year in WindEurope’s Central          related to the risk of retroactive changes on the Belgian
     Scenario, offshore wind will represent about one quarter     projects that were awarded without tenders and the
     of the total market by 2020 (compared to a 15% share         potential installations of projects ahead of schedule in
     in the last 4-year period, between 2013 and 2016). The       France, Germany or Estonia in the most optimistic pro-
     offshore market will concentrate mainly in the UK with 5.2   jections.
     GW or 42% of the new grid-connected capacity. Anoth-
     er four countries will see offshore installations: Germany
     (3.5 GW), Belgium (1.5 GW), the Netherlands (1.4 GW)
     and Denmark (1.0 GW). The offshore market will peak in
     2019 with annual installations over 4 GW.
                                                                     OFFSHORE WILL
                                                                     REPRESENT ONE QUARTER
                                                                     OF THE MARKET BY

                                                                     2020

     FIGURE 15
     Wind energy outlook to 2020 in the EU

          18

          16
          14

          12

          10
     GW

          8

          6

          4

          2
          0
               2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
                                       Onshore      Offshore        Low          High         Central

                                                                                                     Source: WindEurope

26   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     In terms of cumulative installed capacity, Germany will
     remain the country with the most capacity installed with
     between 65.5 to 68.5 GW (66.5 GW in the Central Sce-
                                                                      CUMULATIVE
     nario). Spain will follow with 25 to 27.5 GW (26.5 GW in         INSTALLED CAPACITY
     the Central Scenario) and the UK will be the third largest
     country with a total of 7.8 to 23.3 GW (22 GW in the Cen-
                                                                      COULD REACH

                                                                      204 GW
     tral Scenario), with almost half of that capacity (10 GW)
     being offshore.

                                                                      IN 2020

     FIGURE 16
     Expected cumulative installed capacity until 2020

          250

          200

          150
     GW

          100

           50

            0
                06

                09

                                                  10

                                                                                                      19

                                                                                                     20
                05

                07

               08

                                                           11

                                                          12

                                                                     13

                                                                      14

                                                                                15

                                                                                       16

                                                                                              17

                                                                                                      18
                                                        20
                                                20

                                                                                                   20
                                                                                            20
                                                                   20

                                                                              20
                                                                   20
                                                        20

                                                                                     20

                                                                                                   20

                                                                                                   20
             20

             20
             20
             20

             20

                                              Onshore     Offshore         Low           High
                                                                                                       Source: WindEurope

     2.3.1 CENTRAL SCENARIO
     WindEurope’s Central Scenario provides a best estimate        In the Central Scenario, the planned tenders in Germany,
     of the installed capacity in Europe in the next four years.   France and Spain provide good visibility on the post-2018
     This scenario takes into account the pipeline of wind ener-   market development. In addition, in France and the Neth-
     gy projects and the ongoing and future legislation in each    erlands, the objectives set respectively for 2023 and 2020
     Member State that could enable the deployment of vol-         provide clear guidance on the deployment of wind ca-
     umes. In addition, it reflects on a case-by-case basis the    pacity. In Poland, the Wind Farm Act remains applicable,
     impact of the 2020 targets. For offshore wind, the Central    putting a pipeline of 2.2 GW of onshore projects at risk.
     Scenario assumes that all projects are built according to a   Also, the UK will decrease its activity in onshore wind from
     realistic timeline.                                           1.6 GW in 2016 to almost none in 2020, while shifting the
                                                                   government focus to offshore wind.

27   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     FIGURE 17
     Wind energy market outlook in the EU28 under WindEurope’s Central Scenario

          16                                                                                                                250
                                                                                                3.1
          14                                                                                                  4
                                                                                    3
                                                               1.2    1.6   1.5
                                                                                          1.6          3.3                  200
          12
                                                                                                                    2.2

                                                                                                                                  Cumulative (GW)
                                           0.6     0.9   0.8
          10                                                   10.9                                                         150
                             0.3                                            10.5                10.9
                                   0.3     9.7                        10                 10.9
     GW

          8            0.1   8.6                   9     8.9                       9.8                 8.9    9.3
                                   8.1                                                                              8.6
                 0.1
          6            7.1
                                                                                                                            100
                 6.5
          4
                                                                                                                            50
          2

          0                                                                                                                 0
              06

              09

                                                   10

                                                            19

                                                           20
              05

              07

             08

                                                             11

                                                            12

                                                            13

                                                            14

                                                            15

                                                            16

                                                            17

                                                            18
                                                          20
                                                 20

                                                         20
                                                         20
                                                         20

                                                         20
                                                         20
                                                         20

                                                         20

                                                         20

                                                         20
           20

           20
           20
           20

           20

                                   Onshore          Offshore           Cumulative
                                                                                                             Source: WindEurope

     Under the central scenario, 2017 will mark a record year,          the third largest European market and could install up to
     with a revival in 2019 and a considerable decrease to-             6.5 GW of additional wind energy by 2020. Spain, the Neth-
     wards 2020, with the lowest level observed since 2014.             erlands and Belgium should follow with 3.7 GW, 3.2 GW
     Uncertainty for the onshore market after 2020 is very high         and 2.3 GW respectively in the same 4-year period.
     as most EU Member States still do not have post-2020 en-
     ergy plans in place.                                               Between 2017 and 2020 onshore installations will be
                                                                        37.7 GW. Germany will be the leader in onshore wind
                                                                        with 12.9 GW, followed by France (6 GW) and Spain
                                                                        (3.7 GW). The UK will only be the fourth country in on-
     ONSHORE WIND ENERGY
                                                                        shore wind installations as it should install close to 2.6 GW.
     INSTALLATIONS IN 2020
                                                                        The offshore market will concentrate mainly in the UK
     COULD BE THE LOWEST                                                with 5.2 GW or 42% new grid-connected capacity in the

                       2008
                                                                        period 2017-2020. Following the UK, another 4 countries

     SINCE                                                              will see offshore installations: Germany (3.5 GW), Belgium
                                                                        (1.4 GW), the Netherlands (1.3 GW) and Denmark (1.0 GW).

                                                                        In the Central Scenario, the market concentration in Ger-
     Germany will represent over one third of new installed             many will gradually decrease from 40% in 2016 to less
     capacity in the next 4 years, with a total of 16.5 GW. The         than 30% in 2020, thanks to significant developments in
     second largest market is the UK, with two thirds of its new        France and Spain.
     installations offshore. With a government objective of 15
     GW of cumulative capacity by 2018, France will become

28   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     However, the wind energy market will mostly be in West-
     ern European countries. Eastern Europe will have a very
     small proportion of the market in the next 4 years, with
                                                                                      GERMANY WILL BE
     less than 3% of new installations, mostly in Poland, Croa-
     tia, Estonia and Czech Republic.
                                                                                      ONE THIRD OF ALL NEW
                                                                                      INSTALLED CAPACITY UNTIL

                                                                                      2020
     FIGURE 18
     4-year installations (2017-2020) per country under WindEurope’s Central Scenario*

          18    3.5
               12.9
          16

          14

          12
     GW

          10
                      5.1
                      2.6
          8
                            0.002
                              6
          6
                                    0.03
          4                          3.7   1.3
                                           1.7   1.4
                                                 0.9    0    0.03   0.9
                                                                          0
          2                                            1.6    1.5   0.5
                                                                          1.1
                                                                                 0    0.04    0     0
                                                                                                         0.02    0     0
                                                                                0.8    0.7   0.8   0.8                       0     0      0      0
                                                                                                          0.3   0.3   0.3    0.1   0.1   0.05   0.04
          0

                                                                Onshore                Offshore

              *WindEurope expects no new installations in Cyprus, Hungary, Romania, Latvia, Bulgaria,
              Slovakia and Slovenia

                                                                                                                            Source: WindEurope

29   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     FIGURE 19
     Market share by region under WindEurope’s Central Scenario

     100%
      90%
      80%
       70%
      60%
      50%
      40%
      30%
      20%
       10%
        0%
                 2010     2011      2012      2013       2014        2015    2016       2017     2018       2019     2020

                  Germany                       South Western Europe                      France and Benelux
                  UK and Ireland                Others (Nordics & Austria)                Central Eastern Europe

                                                                                                          Source: WindEurope

     2.3.2 LOW SCENARIO
     In the Low Scenario, European governments propose no              Market concentration resembles that of WindEurope’s
     positive improvements from current legislation. Conse-            Central Scenario (see Figure 19), with most of the market
     quently, all countries with no incentives for wind energy         activity in Western Europe.
     remain with no new installations even if they are yet to
     reach their renewable energy targets. The permitted and           In Germany, Spain, the Netherlands and France, longer
     already supported pipeline is built but unfavourable na-          time to deliver onshore projects will lead to respectively
     tional policies for permitting and planning persist; this re-     0.8 GW, 1.5 GW, 0.5 GW and 0.4 GW less installed capacity
     sults in a slow pace of installations for existing permitted      in the period 2017-2020 than in the Central Scenario. In
     projects and in a significant slowdown for awarding new           Sweden, the oversupply of green certificates would persist,
     projects. The outlook remains positive in countries that          thereby decreasing their price. This would lead to 1.2 GW
     have sent strong political signals to the wind energy indus-      less installed capacity than in the Central Scenario. Den-
     try in recent years.                                              mark would see no new onshore wind capacity before the
                                                                       end of 2020 due to permitting issues and problems with
     Under the low scenario, whilst 2017 is still a good year in       public acceptance.
     installations, in 2019, there is no significant revamp of the
     market (in contrast to the Central Scenario), and it progres-     Offshore, WindEurope’s Low Scenario considers that the
     sively decreases towards the end of the 4-year period.            Belgian projects support scheme awarded without ten-
                                                                       ders would be retroactively changed, which would lead to
                                                                       600 MW less installed capacity than in the Central Scenario.

30   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     FIGURE 20
     Annual and cumulative installations under WindEurope’s Low Scenario

        14                                                                                                             250
                                                                                  3     1.6
                                                                           1.5                 2.8
                                                              1.2    1.6
        12
                                           0.6                                                             3.6         200
                                                 0.9    0.8                                          2.9

                                                                                                                             Cumulative (GW)
        10                                                    10.9
                            0.3                                                         10.9                      2
                                  0.3                                      10.5
                                           9.7                       10
           8
                                                                                  9.8
                                                                                               9.6                     150
                     0.1    8.6                   9     8.9
      GW

               0.1                 8.1
                                                                                                     7.2
           6         7.1                                                                                         6.9   100
                                                                                                           6.5
               6.5
           4
                                                                                                                       50
           2

           0                                                                                                            0
              05

              06

              07

             08

              09

                                                10

                                                          11

                                                         12

                                                                   13

                                                                    14

                                                                                    15

                                                                                   16

                                                                                                 17

                                                                                                 18

                                                                                                 19

                                                                                                20
                                                       20

                                                                                               20
                                                                 20

                                                                                 20
                                                                 20
                                                       20
                                              20

                                                                                 20

                                                                                              20
                                                                                              20
           20
           20

                                                                                              20
           20

           20
           20

                                                 Onshore      Offshore            Cumulative
                                                                                                           Source: WindEurope

     2.3.3 HIGH SCENARIO
     In the high scenario, all EU countries are able to achieve        Importantly, markets that expect very few installations
     their 2020 renewable energy targets. The legislative              under the Central Scenario such as Poland, Bulgaria or
     framework is improved in those countries where current            Hungary would witness positive developments that would
     planning and permitting rules are slowing down or even            allow for respectively 1.5 GW, 0.2 GW and 0.1 GW more
     jeopardizing the market. Those changes would allow de-            capacity than in the Central Scenario. With this capacity,
     velopers to build the current project pipeline entirely.          Eastern Europe would make up 8% of the market by 2020
     Governments also boost the auction volumes to acceler-            instead of 3% in the Central Scenario.
     ate the pace of installations and also ensure more cost re-
     duction. Offshore, all projects are built according to their      Offshore, the high scenario sees the early realisation
     more optimistic schedule.                                         of a few more projects than in the Central Scenario.
                                                                       Four 24 MW floating offshore wind pilot projects would
     After an impressive 2017 year record with over 16 GW              be commissioned in France in 2020. In addition, Estonia
     of installed capacity (14 GW under the Central Scenario),         would start commissioning its first offshore wind project,
     2019 would mark another record with over 17 GW, 3.7 GW            Loode Eesti Meretuulepark, with 250 MW installed out of
     more than under the Central Scenario.                             the 700-1,100 MW potential capacity of the full project.
                                                                       A cooperation agreement would be signed between the
     Germany, Spain, the Netherlands and France would ac-              Hiiu rural municipality and the project developer.
     celerate their projects to reach respectively 2 GW, 1 GW,
     1 GW and 0.7 GW more new installed capacity in the peri-
     od 2017-2020 than in the Central Scenario. The UK would
     launch a new 1 GW onshore wind tender that would in-
     crease its installed capacity by 2020.

31   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     FIGURE 21
     Market and cumulative installations under WindEurope’s High Scenario

          18                                                                                                 4.4           250
                                                                                               3.4    3.6
          16
                                                                                                                    2.5
          14                                                                                                               200
                                                                                   3

                                                                                                                                 Cumulative (GW)
                                                                           1.5          1.6
                                                              1.2    1.6
          12
                                           0.6                                                 12.9          12.6          150
                                                  0.9   0.8                                           12.2          11.9
          10                 0.3                              10.9                      10.9
     GW

                                   0.3     9.7                             10.5   9.8
          8            0.1   8.6                   9    8.9          10
                 0.1               8.1                                                                                     100
          6            7.1
               6.5
          4                                                                                                                50
          2
          0                                                                                                                0
                                                    11

                                                                                                     18
                                                                      16

                                                                                                     19
                                                   10

                                                   12

                                                                      13
            08

                                                                      15
                                                                      14
            06

            09

                                                                                                    20
            05

                                                                                            17
            07

                                                 20
                                                 20

                                                 20

                                                                    20

                                                                    20

                                                                    20

                                                                    20

                                                                                          20

                                                                                                  20

                                                                                                  20
          20

          20

          20

          20

          20

                                                                                                  20
                                                 Onshore      Offshore            Cumulative
                                                                                                             Source: WindEurope

     2.4 INVESTMENT OUTLOOK
     According to WindEurope, between 75 and 95 €bn in in-             with regulatory uncertainty for the post-2020 period, is
     vestments in new assets will be needed moving forward             also slowing down activity in some wind energy markets.
     to 2020. Under the Central Scenario, €90bn of invest-             While auctions are being rolled out in a larger number of
     ments in new assets will be needed.                               markets, there will be a lull in investments before they
                                                                       lead to new project final investment decisions (FIDs).
     Whilst 2016 saw a record level of new investments, low-
     er volumes are expected in the next 4 years, mainly due
     to two reasons. Firstly, cost reductions across the value
     chain have made it possible for investors to finance more
     capacity with less funds. Secondly, the transition from
     Feed-in Tariffs to auctions and Feed-in-Premiums, along

32   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     FIGURE 22
     Investment outlook in new assets for the period 2017-2020 under WindEurope’s Central Scenario (in bn€)9

            30

            25

            20
     € bn

            15

            10

             5

             0
                    2010        2011        2012       2013     2014      2015   2016   2017   2018    2019    2020

                                                               Offshore      Onshore
                                                                                                      Source: WindEurope

       9.        Projects reaching first investment decision

33   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     2.5 GLOBAL WIND ENERGY
     MARKET OUTLOOK
     With more than 50 GW of new additions in the 2017-2020
     period under the central scenario, the EU-28 will repre-
     sent slightly less than a quarter of global installations,
                                                                    NEW INSTALLATIONS
     significantly lower than China, which expects to install       IN THE EU WILL REPRESENT

                                                                    22%
     almost the double (84GW). Onshore wind installations in
     the US will be similar to those in Europe. However, no ad-
     ditions are expected on offshore wind technology. With
     8% of world’s market in the period, India is expected to
     bring additional 17 GW of onshore capacity.                    OF WORLD’S MARKET

     FIGURE 23
     Global wind installations in 2017-2020

                                                      Other
                                                      17%            EU28
                                        India                        22%
                                        7%

                                                   US
                                                   16%            China
                                                                  38%

                            90
                            80
                            70
                            60
                            50
                       GW

                            40
                            30
                            20
                            10
                             0
                                      EU28             China              US        India

                                                  Onshore                      Offshore

                                                                                     Source: WindEurope, IEA

34   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     2.6 RENEWABLE ENERGY
     SOURCES OUTLOOK
     Under WindEurope’s Central Scenario, wind power would
     account for more than half of new renewable installations
     between 2017 and 2020 in the EU. With 37% of new in-                     MORE THAN HALF OF NEW
     stallations, solar PV will become the second source of                   RENEWABLE INSTALLATIONS
     growth in renewable capacity. Solar PV and wind energy
     will together represent almost 90% of new renewable ca-
                                                                              IN THE EU WILL BE FROM
     pacity.                                                                  WIND ENERGY

     FIGURE 24
     Net growth in renewable capacity in 2017-2020

                                                                  Bioenergy
                                                                  7%

                                           Hydro
                                           4%             Other
                                                                       EU28
                                                                       22%

                                                   Solar US
                                                         PV              Wind
                                                   37% 16%           China52%
                                                                     38%

                          60
                          50
                          40
                     GW

                          30
                          20
                          10
                          0
                                    Wind                Solar PV              Hydro        Bioenergy

                                                                                 Source: WindEurope, SolarPower Europe, IEA

35   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     2.7 WIND ENERGY
     GENERATION
     In 2020, renewables will be able to power approximately         & waste (190 TWh) would become the third renewable
     35% of the EU’s electricity mix. With 468 TWh in the Cen-       electricity source, followed by solar PV (155 TWh).
     tral Scenario, wind will overtake hydro (375 TWh) as the
     main source for renewable electricity generation. Biomass

     FIGURE 25
     Evolution of the EU’s electricity mix

                              100%

                              90%

                              80%
     Share in the power mix

                              70%

                              60%

                              50%

                              40%

                              30%

                              20%

                              10%

                               0%
                               20 0
                               20 1
                                  02
                                  03

                               20 4
                               20 5
                                  06

                               20 8
                                  09
                                  10

                               20 1
                                  12
                                  13

                               20 4
                                  15
                                  16

                                  18

                               20 9
                                  20
                               20 7

                                  17
                                  0

                                   1
                                  0
                                  0

                                  1
                                  0

                                  1
                                  0
                                 0

                                20

                                20
                               20
                               20

                               20

                               20
                               20
                               20
                               20
                               20
                               20

                               20

                              Wind   Solar   Hydro   Biomass-waste   Geothermal and other renewables        Others

                                                                                                  Source: WindEurope

36   Wind energy in Europe: Outlook to 2020
Mid-term wind energy market outlook

     The share of wind energy in electricity demand has in-           by wind energy. With an expected 30% share of wind
     creased significantly in the last 15 years, going from just      in 2020, Germany will be the second highest country of
     1% in 2000 up to 11% in 2015. And it is expected to con-         wind energy penetration rate. Ireland, Portugal and Spain
     tinue growing, between 15.7% and 17.4% by the end of             would follow with 29%, 27% and 24% of wind energy in
     2020. WindEurope’s Central Scenario foresees a share of          their electricity demand respectively.
     16.5% of wind in the EU’s electricity demand. Wind ener-
     gy is thus expected to contribute significantly to the 2020
     EU Renewable Energy target.                                           WIND ENERGY WILL
                                                                           COVER 16.5% OF EU’S
     Denmark will remain the country with the highest share
     of wind power in its electricity demand. It will be the only          ELECTRICITY DEMAND BY
     country with more than half of its electricity supplied
                                                                           2020
     FIGURE 26
     Evolution of wind energy share in EU’s electricity demand

                 EU28

          Denmark
         Germany
            Ireland
          Portugal
              Spain
                 UK
            Estonia
       Netherlands
           Belgium
           Sweden
          Romania
          Lithuania
            Greece
            Austria
            Poland
            France
            Croatia
            Cyprus
               Italy
           Bulgaria
            Finland
       Luxembourg
              Malta
             Latvia
          Hungary
     Czech Republic
          Slovenia
           Slovakia
                       0%              10%            20%              30%            40%             50%            60%

                                              2000    2005          2010     2015     2020
                                                                                                         Source: WindEurope

37   Wind energy in Europe: Outlook to 2020
3.
     TECHNOLOGY
     TRENDS
     Wind turbine technology is facing a dramatic shift in both
     onshore and offshore markets, with a constant increase of                MOST ONSHORE TURBINES
     turbine capacity.
                                                                              ORDERED IN H1 2017 ARE
     Towards 4 MW onshore wind platforms

     In the first quarter of 2017, above 90% of onshore wind
                                                                              ABOVE
     turbines ordered for delivery in 2018 to 2020 were above
     3 MW10 , a trend that is set to continue toward larger and
                                                                              3 MW
     FIGURE 27
     Capacity rating of ordered onshore wind turbines in Europe

                                                                                                                Average rating per turbine (MW)
          100%                                                                                            3.5
          90%
                                                                                                          3
          80%
          70%                                                                                             2.5
          60%                                                                                             2
     MW

          50%
          40%                                                                                             1.5

          30%                                                                                             1
          20%
                                                                                                          0.5
             10%
             0%                                                                                           0

             1.5 to 2MW         2 to 2.5MW           2.5 to 3MW          3 to 3.5MW   3.5 to 4MW     4.5 to 5MW

                                                        Average turbine rating
                                                                                                   Source: WindEurope

       10.    See WindEurope’s quarterly turbines order monitoring (members only)

38   Wind energy in Europe: Outlook to 2020
Technology trends

     In 2017, 4 MW platforms have appeared in almost every               to IEC III (light winds). Within these platforms, there is a
     European turbine manufacturers’ book and will be ready              very wide range of rotor diameters from 117 metres (for
     for installation as of 2018. The product diversity will allow       high winds) to 150 metres (light winds).
     operations from all wind sites between IEC I (high winds)

     FIGURE 28
     3.8 MW+ onshore turbines currently available in Europe (size of the bubble represents the rotor diameter)

                           5.5
                                         G128 - 5.0                                        G132 - 5.0

                           5.0
     Turbine rating (MW)

                                                                                             E - 141 EP4         V150 - 4.0/4.2
                           4.5            E - 126 EP4

                           4.0       V117 - 4.0/4.2

                                      GE 3.8 - 130
                           3.5                                           V136 - 4.0/4.2
                                                                                                           N131/3900

                           3.0
                                 0                       1                       2                              3
                                                                   Main IEC class

                                     Enercon      Siemens Gamesa      GE Renewable Energy                Vestas         Nordex

                                                                                                            Source: WindEurope

39   Wind energy in Europe: Outlook to 2020
Technology trends

     Beyond 7 MW offshore wind platforms

     In the first quarter of 2017, all offshore wind turbines       already started in 2016 and is expected to continue lead-
     ordered were in the 7 to 9 range, following a trend that       ing towards larger machines.

     FIGURE 29
     Capacity rating of ordered offshore wind turbines in Europe

     100%                                                                                                          9

                                                                                                                        Average rating per turbine (MW)
      90%                                                                                                          8
      80%                                                                                                         7
      70%
                                                                                                                   6
      60%
                                                                                                                   5
      50%
                                                                                                                   4
      40%
                                                                                                                   3
      30%
      20%                                                                                                          2

       10%                                                                                                        1
        0%                                                                                                         0

                 0 to 3 MW       3 to 6 MW       6 to 7 MW         7 to 8 MW         Average turbine rating

                                                                                                      Source: WindEurope

40   Wind energy in Europe: Outlook to 2020
Technology trends

     FIGURE 30
     Recent 7 MW+ offshore turbines currently available in Europe (size of the bubble represents the rotor diameter)

                            11
                                       V164 - 9.0 MW
                            10
      Turbine rating (MW)

                                       V164 - 8.3MW                                               AD 8 - 180
                             9
                                       V164 - 8.0MW
                             8
                                                                                               SWT-8.0 - 154
                             7
                                                                                               SWT- 7.0 - 154
                                           SE6.2M 152
                             6
                                                                                               SWT-6.0 - 154

                             5
                                                                             S                                             1
                                                                                 Main IEC class

                     ADWEN                     MHI Vestas Offshore Wind                           Siemens Wind Power                         Senvion SE

                                                                                                                                     Source: WindEurope

     An increasing number of platforms above 7 MW have
     been introduced in turbine manufacturers’ book since
     2016. The rated capacity of offshore wind turbines has
     grown significantly over the past decade, facilitating the
                                                                                                 OFFSHORE TURBINES
     harnessing of sites with higher wind speeds (IEC 1) and                                     ORDERED SINCE 2016 ARE

                                                                                                 ABOVE
     capable of operating under extreme weather conditions
     (IEC S). Within these platforms, there is a very wide range
     of rotor diameters from 128 metres (for high winds) to

                                                                                                 7 MW
     180 metres (light winds).

     Floating offshore is coming of age

     Floating offshore wind (FOW) is on the rise. While FOW                                  in the offshore wind supply chain, enabling costs to fall
     technology was previously confined to R&D, the technol-                                 significantly in the years to come. 9 projects, with a total
     ogy has developed significantly in recent years, and FOW                                of 338 MW of capacity are planned to be commissioned
     is now ready to be deployed into the market. Semisub-                                   by 2021 in France, the UK, Ireland and Portugal. 11
     mersible and spar buoy floating substructures are now
     deemed appropriate for launch and operations, while the                                 The Hywind Scotland floating wind farm, the first com-
     barge and the tension leg platform (TLP) floating substruc-                             mercial project, is expected to go live before the end of
     ture concepts are still under development and will be op-                               2017, with the first turbines already towed to site in July
     erational in the coming years. The floating offshore wind                               2017.
     sector will benefit from the latest technologies available

        11.                 A detailed list of projects with capacity and commissioning date is available in WindEurope’s Floating vision statement, June 2017

41   Wind energy in Europe: Outlook to 2020
Technology trends

     FIGURE 31
     The four main technologies for floating offshore wind

                    Semi-
                 submersible

                                                                             Buoyancy
                                                                             stabilised
                                                                              “barge”
                                                             Tension leg   with catenary
                                                              platform       platform
                                                Spar                       mooring lines

                                                                              Source: WindEurope

42   Wind energy in Europe: Outlook to 2020
DO NOT MISS OUT:
     On the WindEurope Business Intelligence reports that will help you
     understand the wind energy landscape

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43   Wind energy in Europe: Outlook to 2020
WindEurope is the voice of the wind industry, actively
promoting wind power in Europe and worldwide. It
has over 450 members with headquarters in more
than 40 countries, including the leading wind turbine
manufacturers, component suppliers, research insti-
tutes, national wind energy associations, developers,
contractors, electricity providers, financial institutions,
insurance companies and consultants. This combined
strength makes WindEurope the world’s largest and
most powerful wind energy network.

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