OVERVIEW - Emerging markets climb up the top wind markets chart
Brazilian wind park. Featured image by Carla Wosniak. License: Creative Commons, Attribution 2.0 Generic.
Emerging markets are undeniably today's hot spot when considering wind power projects and there are clear indications that developing economies will soon dominate the chart with top markets to invest in.
It is important to remember that renewable energy development in emerging markets follows a path very different from the one set by the centralised grids of the industrialised world.
Renewables growth in developing countries is fueled not so much by government subsidies and environmental concerns but by pure energy demand that needs to be met in a quick and relatively inexpensive way. The lack of centralised grid infrastructure is not a barrier, but rather an opportunity to distributed renewable generation. And last but not least, thanks to technological advances some renewable energy sources are today cost competitive with their fossil fuels counter parts. For example, according to the Climatescope 2014 report, put up by research firm Bloomberg New Energy Finance (BNEF), the average electricity price for industrial users in 55 emerging markets in Africa, Asia, Latin America and the Caribbean was USD 147.9 (EUR 133.7) per MWh in 2013, well above BNEF’s levelised cost of electricity for wind of USD 82.
Considering that, it is no wonder that the year 2014 brought a new record in wind power installations. According to figures released by the World Wind Energy Association (WWEA), more than 50 gigawatts (GW) of new capacity went online last year, bringing the total close to 370 GW. The market volume for new wind capacity in 2014 was 40 % bigger than in 2013 and saw three emerging markets enter the top ten in terms of installed wind power.
THE BIG THREE
Ambitious targets, combined with sustained levels of support and efforts to open up to foreign investors have launched three emerging economies -- China, India and Brazil -- to the top.
China added just over 23 GW of new capacity in 2014, the highest annual number for any country ever, bringing the total to 114 GW. The Asian country aims to nearly double its wind capacity to 200 GW by the end of 2020.
India is the second largest wind market in Asia with 2.3 GW in new capacity for 2014. The sector has struggled in the last couple of years but 2014 seems to signal the onset of a recovery phase. The Indian government has also recently committed to a target of 170 GW of renewables by 2022.
Brazil is one of the most promising onshore markets for wind energy, for at least the next five years. The Brazilian wind industry has the objective to maintain growth of at least 2 GW per year and possibly provide 12% of national generation capacity by 2023.
MID-TERM MARKET OUTLOOK
Asia, mainly China and India, but Pakistan and the Philippines as well, will continue to dominate the wind market, according to Global Wind Energy Council (GWEC). Having surpassed Europe in terms of cumulative installed capacity at the end of 2014, Asia will be bringing 40%-45% of the annual global total going forward.
Latin America will also continue to grow, with Brazil at the lead, and also with important boosts from Chile, Uruguay, Peru, and the Central American markets.
The African market reached nearly 1 GW of annual installed capacity for the first time in 2014, and it is expected to keep up the pace, driven primarily by South Africa and Egypt.
Morocco, Ethiopia, Kenya, Tanzania and Ghana are some emerging markets to pay attention to as well.