Gwec Global Wind Report 2022

GWEC | GLOBAL WIND REPORT 2022
GLOBAL WIND ENERGY COUNCIL

3
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Table of Contents
Forewords 2 Market outlook 2022-2026 139
Executive summary 7 Appendix 147
Wind energy: The next era of growth 15 Methodology and terminology 148
Part One: System Design 21 Global Leaders 152
Part Two: Society 43
Part Three: Supply Chain 57
Part Four: System Technology 67
Part Five: Infrastructure 79
Part Six: Workforce 89
Market status 2021 101
Markets to Watch 113
Vietnam 114
The Philippines 117
China 119
India 124
Brazil 127
Colombia 129
South Africa 131
Egypt 134
Exploring New Markets: Onshore Wind 137
Exploring New Markets: Offshore Wind 138
Global Wind Energy Council Lead Authors Valuable review and commentary Published
Rue de Commerce 31 Joyce Lee, Feng Zhao for this report was received from: 4 April 2022
1000 Brussels, Belgium •Dan Wetzel (IEA)
Contributors and editing by Design
[email protected] •D
olf Gielen, Roland Roesch, Michael Renner, Celia
Ben Backwell, Emerson Clarke, Rebecca Williams, lemonbox
www.gwec.net García-Baños (IRENA)
Wanliang Liang, Anjali Lathigara, Esther Fang, Reshmi www.lemonbox.co.uk
•Nils Askær-Hune, Emil Damgaard Grann (Ørsted)
Ladwa, Marcela Ruas, Wangari Muchiri, Ramón Fiestas,
•J on Lezamiz, Song Cheng, Carolina Clemente,
Liming Qiao, Mark Hutchinson, Thang Vinh Bui,
Fergus Costello, Aidan Cronin (Siemens Gamesa
Lisias Abreu
Renewable Energy)

GWEC | GLOBAL WIND REPORT 2022 1
Forewords
More than ever action cannot be a carbon-neutral economy by 2050 this part of the energy transition.
delayed if we want to deliver the is technologically possible, Two decades ago, we were a
necessary wind capacity to reach economically feasible and socially pioneer in onshore wind energy.
climate objectives on time. As was necessary. The decarbonisation of We have invested €120 billion in
made clear at the Glasgow the economy is a tremendous the energy transition since then,
Climate Summit, there is broad opportunity to create wealth, and now we are also pioneers in
consensus on the urgency of generate employment and improve offshore wind. During 2021,
promoting rapid and effective both the condition of the planet offshore wind energy has
decarbonization. Electrification and people’s health. established itself as one of our
with renewables should act as a company’s major growth drivers.
lever for global change as the most As is already well known at this
cost-efficient way to decarbonise point, wind is a key and strategic The wind industry is doing its part,
Xabier Viteri Solaun the economy. part of the mix to achieve a green ready and committed to step up,
Managing Director,
Iberdrola Renewables
The latest geopolitical events have
put a spotlight on the urgent need The decarbonisation of the economy is a
to reinforce security of supply,
reduce energy dependency and
tremendous opportunity to create wealth, generate
shield against market disruptions employment and improve both the condition of the
caused by high prices. Again, this
can only be achieved with a planet and people’s health.
massive deployment of
renewables.
economy. 2021 was a record year however permitting is the main
There is a clear understanding on for the industry, but we need to roadblock hindering our progress.
the role of wind in the race to reach keep moving at pace. The new Policy barriers must be lifted.
the Paris Agreement goal of 1.5°C report of the UN’s Overcoming permitting
global warming. GWEC is playing Intergovernmental Panel on bottlenecks should be a priority by
an important role in supporting the Climate Change (IPCC) stated that all countries and policymakers.
development of the wind industry the Earth is already 1.1°C warmer
around the world, and this report than before industrialisation. Our A massive deployment of
shows we are moving in the right response to this is still not enough; renewables requires huge levels of
direction, but there is still a way to we need to push harder to achieve investments and this requires clear
go to reach the path of zero- the goals on time. and stable regulatory frameworks.
carbon. Any unexpected changes on rules
We have always believed strongly causes uncertainty and will result
I firmly believe that the transition to in wind and committed to leading in a reduction in the appetite to

2 GWEC.NET
Forewords
deploy new renewable capacity. and regional supply chain hubs,

Policy is critical for the industry sometimes linked to new
and needs to be consistent and opportunities at technological
progressive in its thinking. level. These initiatives would
reduce geopolitical risk and
It is also paramount to create an improve energy security, as well as
environment that boosts innovation creating new green jobs and
to be able to harness every economic growth for those regions.
opportunity to unlock the full This is the core that underpins the
potential of wind. Technology industry, and it is of extreme
improvements will be one of the importance to strengthen every
main enablers of the energy link of the chain, from design, to
transition. One of the key game- manufacturing to equipment.
changers is floating offshore wind,
which is ready to take off and will Iberdrola Group seeks to create
soon bring wind technology to economic, social and
dozens of new sea basins. environmental value in all its
markets, and we operate with a
Together with innovation in supply, more sustainable future in mind.
optimal grid planning and Ensuring a strong co-existence
dimensioning is crucial. with local communities and other
Investments should also be wind power interests should
directed towards smart grids, remain one of the top priorities for
transmission and distribution our industry. Our desire is to
networks, as well as in energy promote this new model in
storage, essential infrastructures partnership with all the players
for the integration of the energy in involved in the sector, so that
the system and bringing society as a whole can share in its
renewable energy to users. benefits.
Last but certainly not least, we must A holistic approach is of the

also work on building a strong and essence. The goals are shared and
sustainable supply chain that will clear. Now, it is time to work
give the industry a robust platform together as an industry and focus
to support expansion and the high our efforts in the same direction.
production volumes required.
Some regions are promoting local

Forewords
Word from the Chairman

If the global journey to meeting the reap another, often overlooked, With wind and solar delivering 9%
Paris Agreement were a mountain benefit of the energy transition: and 3% of our world’s electricity,
to climb, the past months have enhanced energy security. Wind and electricity making up just 20%
shown that there is increasingly and sunshine don’t cost anything, of global total final energy
difficult terrain to navigate before and nations that embrace consumption, the challenge ahead
we reach the summit. renewables as the backbone of of us is significant - but so are the
their energy systems will be opportunities. Let’s embrace these.
Although political momentum to protected from the price swings of Let’s partner with stakeholders
accelerate the energy transition volatile fossil fuels. across the global energy system to
Morten Dyrholm increased over 2021, we see unlock the value creation of the
Chairman, Global Wind Energy Council short-term market stagnation Energy security has become a clean energy transition. Let’s step
instead of growing markets. critical issue alongside the climate up our involvement in key topics
Permitting bottlenecks around the crisis. Energy systems built on the such as removing permitting
world are still limiting the build-up foundation of wind and solar are bottlenecks, resilient supply chains,
of a net-zero compatible project not only critical to cut greenhouse market re-design, power system
pipeline. And while auctions gas emissions, they are necessary flexibility and electrification. And
incentivise decreasing bid levels, to ensure our resilience against the let’s continue to deliver on our
the wind industry needs to cope heightening volatility around fossil sustainability ambitions. Seizing
with skyrocketing raw material and fuels, and to the uncertainty stirred these engagement opportunities is
transport prices, supply chain by geopolitical conflicts. As these the only way to ensure we are
disruptions and protectionist trade uncertainties become more building a brighter future for
measures, leaving wind turbine complex, governments around the generations to come.
manufacturers and their supply world would be advised to respond
chain squeezed up- and by accelerating the energy At GWEC, we are committed to
downstream. transition and not by slowing it supporting our industry through
down, thereby increasing planetary the imminent obstacles, and
By removing permitting and societal return on investment. ensuring we are ready for the
bottlenecks, drastically scaling up prosperous future ahead. I look
renewable energy build-out, To unlock wind energy’s next era forward to this transformation.
expanding power grids and of growth, GWEC’s role is
incentivising flexibility solutions on becoming more important than
the supply and demand side (e.g. ever. Our growing industry alliance
storage, demand-side across GWEC will be an asset in
management), governments will driving progress.

4 GWEC.NET
Forewords
Welcome to the Global Wind Report 2022

Taking decisive action to put the sector, with a total of 94 GW of impacted economic growth and
energy transition on track and wind installed around the world living standards across the entire
ensure energy security – 21 GW in offshore. world.
Welcome to the Global Wind However, despite progress in It is clearer by the day that we are
Report 2022. As I write this policy commitments and the witnessing a colossal policy and
foreword, the world is facing an hopeful messages from the world’s market failure in terms of providing
unprecedented challenge to governments at COP26 – many of the necessary investment signals
energy security and the vital goals whom met with GWEC in Glasgow for the energy transition. Fossil fuel
of achieving climate targets and – we need to be honest: We are not companies, including coal Ben Backwell
averting dangerous global heating. currently on-track to meet the producers, are seeing record CEO, Global Wind Energy Council
objectives of net zero by 2050 or profits – ultimately paid for by
The current global power crisis the aims of the Paris Agreement. consumers – while renewable
has revealed the continued For wind energy alone, we should energy companies struggle to
dangers of depending on fossil be installing four times the current break even or invest in new
fuels for our energy supply, while level of annual installations to stay capacity. All of this makes a
the brutal Russian invasion of on a net zero pathway. mockery of the collective
Ukraine has seen entire countries international action promised at
held hostage to energy supply, There is strong appetite from both COP26.
used once again as a tool to the public and business to move
achieve geopolitical aims. decisively, but governments are The only permanent fix for the
simply not acting fast or effectively three related problems of energy
Economies and consumers have enough. security, climate change and
been left exposed to record high affordability is a determined and
power and fuel prices, while at the While Russia’s invasion of Ukraine accelerated effort to carry out the
same time, 2021 saw a historic has exposed the starkest energy transition and move away
high in global CO2 emissions, challenges of energy security and from fossil fuels to renewables.
putting the goals of the Paris fossil fuel dependence, the energy Policymakers have been both too
Agreement at risk. crisis is global. Global coal and slow and too hesitant in carrying
gas prices rose sharply throughout out the transition, leading to what
As the Global Wind Report shows, 2021, leading to massive price the IEA and others have referred to
2022 was another big year for spikes and even industry as a “disorderly transition,” where
wind installations and particularly shutdowns across Asia and Europe. the world is exposed to extreme
for the fast-growing offshore wind The resulting high power prices fossil fuel volatility.

Forewords
expansion, public acceptance and

The only permanent fix for the three related the threat of organised
disinformation.
problems of energy security, climate change and
affordability is a determined and accelerated Working together constructively
and determinedly among
effort to carry out the energy transition and move policymakers, community, investors
away from fossil fuels to renewables. and industry, we can resolve
today’s challenges and those that
lie ahead, and play our part in
moving the world to a peaceful,
prosperous and sustainable future.
Unfortunately, the effects of the remove permitting and other
current crisis will be with us for administrative barriers.
several years at least. However, we
can take decisive actions now that Looking to the mid-term, an even
will immediately improve the bigger wave of construction and
situation, while avoiding policy investment can be unlocked if
decisions which further lock us governments come forward with
into fossil fuel dependency and simpler, more practical frameworks
risk even worse crises in the future. for market access, pricing and
Taking urgent action to accelerate procurement. The Global Wind
the deployment of renewables will Report begins to outline these
start to ease economic pain, lower recommendations, and GWEC is
costs and put us on a net zero working with the wind industry to
pathway. compile a simple set of proposals
which – if adopted – will allow
The wind industry is a key policymakers to quickly enable
resource which will help the world progress on the transition.
to find a practical way out of the
current mess. There are literally This year’s report also looks
terawatts (TW) of “shovel-ready” further to the future to kickstart
projects that would lessen vital discussions about the
dependence on fossil fuels and emerging and evolving challenges
unlock huge amounts of investment to renewables in the energy
almost immediately, if governments transition, ranging from critical
take emergency measures to minerals and supply to spatial

6 GWEC.NET
EXECUTIVE SUMMARY
Executive Summary
The Data: 2021 was the wind industry’s

second-best year
The wind industry has enjoyed its drop in installations to 30.7GW as represents three times more than
second-best year ever, with growth the market caught its breath the previous year. New offshore
in 2021 only 1.8% behind a record following a rush to install within the installations represented 22.5% of
2020. Almost 94 GW of capacity FiT environment. In the United all new installations last year,
was added, despite a second year States, a 25% decline to 12.7GW helping bring the world’s total
of the COVID-19 pandemic. This is
Feng Zhao a clear sign of the incredible
Head of Strategy and
Market Intelligence,
resilience and upward trajectory of
the global wind industry.
Almost 94 GW of capacity was added, despite a
Global Wind Energy Council
second year of the COVID-19 pandemic. This is a
Market status
The 93.6 GW of new installations in
clear sign of the incredible resilience and upward
2021 brings global cumulative trajectory of the global wind industry.
wind power capacity to 837 GW,
showing year-over-year (YoY)
growth of 12%. was mainly due to COVID-19- offshore capacity to 57GW, which
associated supply chain issues and is 7% of global installations.
The onshore wind market added disruptions.
72.5 GW worldwide. That is 18% China contributed 80% of that
lower than the previous year due Onshore wind additions in Asia- offshore growth, the fourth year
to a slowdown in China and the US, Pacific and North America have that China has led the way in new
the world’s two largest wind decreased by 31% and 21% installations. Once again, an FiT
markets. However, there was compared to the enormous growth cutoff at the start of 2022 drove this
record-high growth in Europe, rates seen in 2020, but the two growth – a situation replicated in
Latin America and Africa & the regions combined still made up Vietnam, where 779 MW of
Middle East, where new onshore more than two-thirds of global intertidal (nearshore) projects
installations increased by 19%, onshore wind installations in 2021. were commissioned – making it
27% and 120%, respectively. the third -largest market for
The offshore wind market enjoyed offshore installations in 2021.
In China, the termination of the its best ever year in 2021, with
Feed-in-Tariff (FiT) led to a 39% 21.1GW commissioned. That Europe is the only other region to

8 GWEC.NET
Executive Summary
report new offshore wind China played a leading role by public auctions last year as a result
installations last year, driven by a awarding a total of 52 GW wind of policy barriers and COVID-19
record year for the UK, where capacity in 2021, of which 49.2 GW related issues in key markets.
more than 2.3 GW was connected are onshore “grid parity projects”, However, the cost-competitiveness
to the grid. Even though the UK demonstrating that wind power is of wind energy has enabled
relinquished its title as the world’s economically competitive and the private auctions and bilateral PPAs
largest offshore market to China, it country is on-track to reach its to gain popularity in this region,
leads the way with floating offshore ambitious “30-60” targets. and helped Brazil to achieve a
wind, with 57 MW installed last record year with nearly 4 GW in
year, bringing total capacity to 139 In Europe, the picture was more new installations in 2021.
MW. mixed with the reality of permitting
and regulation-associated Floating offshore wind has the
Market dynamics challenges showing in auction potential to expand rapidly to
The wind industry is continuing to results. Procurement was deliver the capacity the world
manage disruptions from undersubscribed in key markets needs, and 2021 witnessed further
COVID-19. Sky-high freight costs including Germany, Italy and breakthroughs into the sector from
and increasing commodity prices Poland, with only 10 GW of the 20 oil and gas majors. Large
last year further squeezed the GW of new onshore capacity put to European oil and gas companies
margins from turbine and auction being awarded. Offshore won offshore wind project auctions
component suppliers and wind brings Europe to 18.1 GW in in Europe and North America, and
developers, which were already 2021, but it is simply not enough won seabed leasing tenders on
under price pressure as the result volume, considering that the EU either side of the Atlantic Ocean.
of market design that has created needs 32 GW of new wind capacity These companies have
“race to bottom” conditions. each year until 2030 to reach its unparalleled offshore engineering
carbon neutrality target by 2050. skills and financial strengths which
Uncertainty around COVID-19 may will take floating wind from the
have slowed down project The effect of clear policy direction current demonstration stage into
commissioning in markets such as was shown in the US, where 2021 full commercialisation by the
the US, India and Taiwan, but was a record year for offshore middle of this decade.
auction activities in 2021 wind solicitation. Four states
demonstrate the desire to continue awarded 8.4 GW, reflecting a Last year was also the year carbon
wind’s growth around the world. strong desire to deliver on neutrality went mainstream.
Auctioned capacity was up 153% President Biden’s target of 30 GW National net zero targets set by
on 2020, with 88 GW awarded offshore wind by 2030. November 2021 covered more
globally. Onshore wind makes up than 80% of global GDP and 77%
69 GW (78%) of that, with offshore In Latin America, less than 1 GW of 1. https://www.ox.ac.uk/news/2021-11-01-80-world-
counting for 19 GW. wind power was awarded through economy-now-aiming-net-zero-not-all-pledges-are-equal

Executive Summary
of global greenhouse gases in 2021 to 31.4 GW in 2026 under

(GHG).1 But these ambitions won’t current policies, bringing its share
be delivered without clear plans: of global new installations from
Countries which have strong today’s 22.5% to 24.4% by 2026. In
targets and clear plans to deliver total, more than 90 GW of offshore
net zero only cover 10% of global capacity is expected to be added
GDP and 5% of GHG emissions. worldwide from 2022-2026.
Market outlook Despite two years of enormous

Commitment to Net zero gathered numbers, the current rate of wind
global momentum at COP26 in growth is simply not rapid enough
Glasgow. Wind power is poised to to allow the world to reach its Paris
play a vital role in accelerating the Agreement targets or a net zero by
global energy transition. Coupled 2050 goal. It is important to
with growing energy security emphasise that the energy policy
concerns triggered by Russia’s environment is in flux and GWEC
invasion of Ukraine, the mid-term expects a wave of new policy
outlook for wind energy is positive. initiatives to address the gap
between current installation rates
The CAGR for the next five years and the trajectory needed to
under current policies is forecast achieve net zero and energy
as 6.6%. GWEC Market security.
Intelligence expects that 557 GW
of new capacity will be added in Given the energy system reform
the next five years – that equates to packages underway in Europe and
more than 110 GW of new other regions, in light of the
installations each year until 2026. Ukraine crisis as of Q2 2022,
GWEC Market Intelligence notes
The CAGR for onshore wind in the that its five-year forecast could be
next five years is 6.1%, with average significantly revised upward this
annual installations of 93.3 GW. In year. But policymakers must
total, 466 GW is likely to be built in accelerate permitting procedures
2022-2026. The CAGR for offshore for wind projects in the near term
wind in the next five year is 8.3%. and initiate structural market
design changes in the mid-term to
The annual global offshore market enable an acceleration in
is expected to grow from 21.1 GW renewable energy deployment.

10 GWEC.NET
Executive Summary
The Story: Wind energy’s next era of growth

In 2021, the wind industry but a grave threat to geopolitical Wind energy’s role as a
continued its global expansion. We and energy security. protagonist of the energy transition
reached new shores and seabeds, will depend on ensuring the
and installed more than three times Wind energy is not growing nearly industry’s growth is sustainable,
the volume of offshore wind fast or widely enough to realise a just and socially responsible, while
compared to 2020. We were at the secure and resilient global energy resting on a clear and viable
heart of international climate transition. At current rates of economic proposition.
negotiations both leading up to installation, GWEC Market
and during COP26, as Intelligence forecasts that by 2030 We can already see a landscape of
Joyce Lee
governments and institutions we will have less than two-thirds of challenges ahead, both in the short Head of Policy and Projects,
increasingly recognised the central the wind energy capacity required term and beyond 2030. Evolving Global Wind Energy Council
role of wind energy in achieving for a 1.5°C and net zero pathway, events, like the global
our Paris Agreement goal of 1.5°C effectively condemning us to miss reverberations of Russia’s invasion
global warming by 2100. our climate goals.2 of Ukraine, will also impact the
growth trajectory for wind energy.
However, we are collectively falling This year’s Global Wind Report In some countries, the crisis has
behind in our climate action goals. examines the full challenges of intensified pressure to switch to
The first instalment of the scaling up wind energy in an renewables and decrease
Intergovernmental Panel on increasingly interconnected world. dependency on - mostly Russian -
Climate Change’s (IPCC) AR6 As the industry gains scale and natural gas, while in other countries
report, provides a reality check: mass, its impacts will reverberate it has revived calls for shale gas
Without immediate, rapid and in the political, socioeconomic and extraction and nuclear power.
large-scale reductions to environmental settings in which it
greenhouse gas (GHG) emissions operates. As it grows, the industry The long-term effect these
in this decade, limiting global will confront old and new frontiers challenges have on wind energy’s
warming to close to 1.5°C or even like supply chain geopolitics, growth depends on how prepared
2°C will be beyond reach. social impacts, disinformation, the industry is to meet them. The
cybersecurity and industry could suffer the casualties
Russia’s invasion of Ukraine in cryptocurrencies. of boom-bust cycles and
February 2022 provided another
The IEA Net Zero by 2050 Roadmap sets out a global electricity generation mix of wind (35%), solar (33%), hydropower
clear message to governments: (12%), nuclear (8%), bioenergy (5%), hydrogen-based (2%) and fossil fuels with carbon capture utilisation and storage
Dependency on imported fossil (2%). The IRENA World Energy Transitions Outlook: 1.5° Pathway report sets out a global electricity mix of two-thirds wind
and solar (comprising 8,174 GW of wind and 14,878 GW of solar by 2050, with wind generating a slightly higher overall
fuels is not only dangerous for share of global electricity) and the remainder comprising hydropower, bioenergy, geothermal, tidal/wave and hydrogen-
environmental and human health, based generation.

Executive Summary
Lagging growth in this decade leads to wind energy shortfalls by 2030 Trust and cooperation between
countries and communities will be
400 3,200 ever more important for an
effective response to climate
350 Or we reach only 64% of the wind power required by 2,800
2030 to stay on-track for a netzero/1.5C pathway change. If countries and
communities work against each
300 2,400 other, the transition to clean
Installations need to grow 4x
Cumaltive global installations (GW)

energy will be slow and
New global installations (GW)
250 2,000
disorderly.
200 1,600
3. System design is struggling
to meet the pressures of the
150 1,200
transition: The current energy
crisis is the consequence of
100 800
energy markets built around fossil
fuels. Governments and
50 400
regulators must tackle the
enormous demands of energy
0 0
market reform to increase
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
security of supply, support
New Wind Capacity Projected New Wind Capacity Based on Current Growth Rates sustainable pricing for renewable
Annual Capacity Gap to Meet Net Zero by 2050 Scenarios energy generation and develop
Cumulated Wind Capacity to Meet Zero by 2050 Scenarios more flexible and resilient energy
systems.
Source: GWEC Market Intelligence; IEA Net Zero by 2050 Roadmap (2021). Projected new wind capacity from 2026-2030 assumes a ~6.6-7.0% CAGR, based on GWEC’s projected
CAGR from 2021-2026. It also accounts for ~34 GW in global decommissioned capacity from 2026-2030 based on 25-year turbine lifetime. Capacity gap figures are estimations based
on the IEA Roadmap milestone for 2030. Cumulative global installations for wind energy are roughly in alignment with the IRENA World Energy Transitions Outlook: 1.5°C Pathway (2021). 4. The wind industry faces
This data represents new capacity, cumulative capacity and decommissioned capacity, and does not include an estimate of repowering installations to replace the ~34 GW in
decommissioned turbines globally.
higher costs amid perverse
market design: Auctions are
disorderly system transformation. ensure that wind energy can world. The global clean energy leading to a “race to the bottom”
Or a stronger and more achieve sustainable and transition is in everyone’s self- in cost, heaping financial pressure
sustainable industry could emerge unprecedented growth in the interest and will bring net-positive on developers and the wind
from holistic system planning, three decades ahead to 2050: socioeconomic value. supply chain. Current energy
supply chain transformation and systems are disincentivising
positive community engagement. 1. Scaling up to 2030: We need to 2. The energy system is investment in the wind business.
scale up annual wind energy increasingly complex and Policymakers need to reevaluate
Here are 10 takeaways from this installations by four times in this interconnected: Energy remains markets to align with economic
year’s Global Wind Report to decade to get on-track for a 1.5°C at the epicentre of geopolitics. and social objectives

12 GWEC.NET
Executive Summary
Transversal challenges to wind energy’s growth in the short and long term
System Design Coal phaseout: The pace of countries exiting and retiring coal-based generation.
Coal phaseout Proposition versus gas: The enabling policy environment for wind energy versus natural
Just transition and inclusion Proposition versus gas
gas/LNG, based on market and socioeconomic value.
Workforce Policy ambition: The visibility and predictability of countries’ wind energy growth targets,
System Design
and the reflection in transparent and long-term procurement schemes.
Skilled workforce Policy ambition
Adopting system value: The shift away from marginal value-based electricity markets
towards a system value framework.
Society Permitting timelines: The ease of obtaining the necessary permits, licenses and approvals
Energy access Adopting system value for wind project deployment, including legal challenges.
Social acceptance: The scale of support versus opposition encountered by wind projects
Infrastructure in host communities.
Public consensus: Public education and awareness about climate change and the needs
Grid and transmission Permitting timelines of the energy transition, and the resulting social and political support for wind energy.
Land use: Availability of land and seabed for wind energy projects.
Supply Chain Supply chain costs: The rise and certainty of market prices for materials, minerals, metals
and other inputs to the wind energy supply chain.
Reliability of RE supply Social acceptance Circularity: The reuse, repurposing, recyclability and recovery of wind farm components
including wind turbines, and the reduction of waste and environmental impacts
Technology generated in the wind project lifecycle in line with a circular economy approach.
Society
Technology Storage and green hydrogen: The pace of cost reduction and commercialisation of
Storage and green hydrogen
Public consensus enabling storage and green hydrogen technologies, which will boost demand for wind
energy.
Land use
Reliability of RE supply: The pace of cost reduction and integration of enabling
Circularity
balancing and flexibility technologies, such as demand-side response tools, which will
Supply chain costs enable large-scale integration of wind energy.
Infrastructure Grid and transmission: The pace and scale of grid reinforcement, buildout and
Supply Chain modernisation, ensuring sufficient grid availability to increase wind deployment.
Energy access: The expansion of infrastructure to enable universal clean energy access
and electrification of power and other sectors.
Short Term (next 5 years) Long Term (10 years and beyond)
Workforce Skilled workforce: The availability of a ready and able workforce with the necessary
training and skills for the wind industry.
Short term (within next 5 years) and long term (more than 10 years ahead) challenges which could slow down Just transition and inclusion: The socioeconomic welfare of stakeholders concerned with
deployment of wind energy. Nodes closer to the outer circle are considered more severe challenges, while nodes closer the energy transition, and the development of a diverse and inclusive workforce which
to the centre are considered low or moderate challenges can harness all talents to grow the wind industry.
Sources: GWEC Market Intelligence and a survey of GWEC’s national wind and renewable energy industry association members, Q1 2022. Note: This graphic is not inclusive of all challenges and factors impacting the growth of wind energy in different markets, and is
meant to be used as a general guide to transversal issues.

5. Wind energy must be a 8. The demise of baseload:
custodian of the energy Flexibility will be the chief
transition: The journey to here has currency of a renewables-led
involved fractious debate and system, which will require greater
disinformation, blurring the investment in enablers like
boundaries of public interest. To digitalisation, hybrid projects,
continue building social consensus green hydrogen and energy
around large-scale renewables storage. System operators will
deployment, the industry must need to develop the tools and
ensure that social and regulatory frameworks to send
environmental values are accurate signals to the market.
synonymous with wind power.
9. Unprecedented grid
6. Cut the red tape for a green investment is needed to keep
future: Too many countries are pace with renewables:
unable to leverage the enormous Infrastructure is a global challenge
interest from investors to deploy affecting economies of all stages of
wind energy projects due to development. Electricity networks
overly complex and permitting are the primary area of need for
schemes. Without streamlining transition-enabling infrastructure.
the procedures to grant permits, Investment in grids must treble
including land allocation and grid from current levels through to 2030.
connection, there will be a
surplus of projects “stuck in the 10. The wind energy industry has
pipeline.” a primary role in a just and
equitable energy transition:
7. Public-private cooperation is Workers from carbon-intensive
needed to confront the new industries can find a place in the
geopolitics of the wind supply wind industry as it grows. Social
chain: There must be a stronger uncertainty from the transition can
international regulatory framework be mitigated with sensitive and
to address the increased participatory dialogue, as well as
competition for commodities and greater public-private collaboration
critical minerals. Threats to price on training and education.
and supply risk must be mitigated, Workforce planning for large-scale
while materials recovery and renewables deployment should be
recycling must advance. an early policy priority.

14 GWEC.NET
WIND ENERGY:
SECTION PAGE
THE NEXT ERA OF GROWTH
Introduction
Introduction
In 2021, the wind industry in this decade, limiting global electricity than any other energy
continued its global expansion. We warming to close to 1.5°C or even source.1 These roadmaps put us
reached new shores and seabeds, 2°C will be beyond reach. on-track to reach global carbon
and achieved huge technological neutrality by 2050, under measures
milestones in areas from blade Russia’s invasion of Ukraine in for widescale electrification,
sustainability to floating offshore February 2022 provided a second energy efficiency, grid and green
wind models. We installed more reality check to energy consumers infrastructure buildout and
than three times the volume of around the world: Dependency on renewable energy deployment.
offshore wind compared to 2020 imported fossil fuels is not only
and are closing in on 850 GW of
total wind installations worldwide.
We were at the heart of international At current rates of installation, we will have less than
climate negotiations both leading
up to and during COP26, as
two-thirds of the wind energy capacity required by
governments and institutions 2030 for a 1.5°C and net zero pathway.
increasingly recognised the central
role of wind energy in achieving
our Paris Agreement goal of 1.5°C
global warming by 2100. dangerous for environmental and But wind energy is not growing
human health, but a grave threat to nearly fast or widely enough to
And yet, we are collectively falling geopolitical and energy security. realise this future. At current rates
behind in our climate action of installation, GWEC Market
goals. The first instalment of the In the International Renewable Intelligence forecasts that by 2030
Intergovernmental Panel on Energy Agency (IRENA) and we will have less than two-thirds
Climate Change’s (IPCC) AR6 International Energy Agency (IEA) of the wind energy capacity
report, published in 2021, roadmaps for a 1.5°C pathway required for a 1.5°C and net zero
provided a reality check from the published last year, wind energy pathway, effectively condemning
global scientific community: becomes a central pillar of the us to miss our climate goals.
Without immediate, rapid and global energy system by 2050, Without drastic action to scale up
large-scale reductions to with more than 8,000 GW of wind wind energy installations, the
greenhouse gas (GHG) emissions capacity generating more industrial footprint of wind energy
1. The IEA Net Zero by 2050 Roadmap sets out a global electricity generation mix of wind (35%), solar (33%), hydropower (12%), nuclear (8%), bioenergy (5%), hydrogen-based (2%)
and fossil fuels with carbon capture utilisation and storage (2%). The IRENA World Energy Transitions Outlook: 1.5° Pathway report sets out a global electricity mix of two-thirds wind and
solar (comprising 8,174 GW of wind and 14,878 GW of solar by 2050, with wind generating a slightly higher overall share of global electricity) and the remainder comprising
hydropower, bioenergy, geothermal, tidal/wave and hydrogen-based generation.

16 GWEC.NET
Introduction
faces critical financial pressures, scenario is closer to our Paris Lagging growth in this decade leads to wind energy shortfalls by 2030
and we miss the opportunity to Agreement goal, and will require
maintain and grow a productive unprecedented rates of renewable
economic sector that employs energy deployment and action to 400 3,200
more than 1.25 million people lower barriers to growth. Full
Cumaltive global installations (GW)

350 Or we reach only 64% of the wind power required by 2,800
worldwide. Finally, we will also fail compliance will the Paris goals will
New global installations (GW)

2030 to stay on-track for a netzero/1.5C pathway
to decarbonise the power, industry, require even more decisive action. 300 2,400
transport, heating and other sectors, Installations need to grow 4x
250 2,000
and significantly expand green As outlined in this report, the
hydrogen production. experience of wind energy’s global 200 1,600
expansion to date has already
150 1,200
Wind energy installations shown some of the challenges to
worldwide must quadruple from growth: inconsistent policy 100 800
the 94 GW installed in 2021 within environments focused on short-
this decade to meet our 2050 term political aims; badly designed 50 400
goals. The longer we delay this markets which do not enable 0 0

dramatic scale-up of growth, the bankable renewable energy 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
more challenging it will be to meet projects; infrastructure and
our targets. transmission bottlenecks; a lack of New Wind Capacity Projected New Wind Capacity Based on Current Growth Rates
adequate industrial and trade Annual Capacity Gap to Meet Net Zero by 2050 Scenarios
Cumulated Wind Capacity to Meet Zero by 2050 Scenarios
In the current environment, there policies related to renewable
is much work to do to ensure that technologies; and hostile political Source: GWEC Market Intelligence; IEA Net Zero by 2050 Roadmap (2021). Projected new wind capacity from 2026-2030 assumes a
action to implement the clean or misinformation campaigns. All ~6.6-7.0% CAGR, based on GWEC’s projected CAGR from 2021-2026. It also accounts for ~34 GW in global decommissioned capacity from
2026-2030 based on 25-year turbine lifetime. Capacity gap figures are estimations based on the IEA Roadmap milestone for 2030. Cumulative
energy transition keeps pace these factors have led to global installations for wind energy are roughly in alignment with the IRENA World Energy Transitions Outlook: 1.5°C Pathway (2021). This data
with climate targets. Even with full underperforming or stop-go represents new capacity, cumulative capacity and decommissioned capacity, and does not include an estimate of repowering installations to
replace the ~34 GW in decommissioned turbines globally.
implementation of all countries’ growth across many areas of the
submitted Nationally Determined world. These lessons must be taken
Contributions (NDC) to 2030 to heart, so that wind energy can goes beyond the immediate
under the Paris Agreement as of continue to scale up in the three situation to examine the full
November 2021, the world is decades ahead to 2050, delivering challenges of scaling up wind
on-track for a 2.4°C global its role in mitigating climate change energy in an increasingly
temperature increase.2 If we factor and transforming communities for interconnected world. As the
in full achievement of longer-term good around the world. industry gains scale and mass, its
net zero pledges, global warming impacts will reverberate in the
could be limited to 2.1°C – this This year’s Global Wind Report political, socioeconomic and
2. https://climateactiontracker.org/global/cat-thermometer/. Climate Action Tracker further notes that the effect of net zero emissions targets adopted or being discussed in more than
140 countries could limit warming to as low as 1.8°C by 2100; as this scenario includes non-binding and unratified targets, it is not included in the main body of this report.

Introduction
environmental settings in fossil fuels phaseout which inhibits burdens and benefits across the The physical assets to support the
which it operates. renewables acceleration; wind value chain and wider next era of wind demand
These impacts investment imbalances that energy system. Or the industry monumental investment: grid and
will be generate crises like the current could suffer the casualties of transmission buildout;
nonlinear, as power price spikes in Europe and boom-bust cycles and disorderly electrification measures, including
the industry Asia; perverse price signals and system transformation. in sectors like transport and
confronts market design which challenge industry; energy efficiency; power
old and supply chain financial sustainability; Wind energy’s role as a system modernisation; large-scale
new the spatial impact of the industry on protagonist of the energy commercialisation of electrolysers
frontiers land and at sea, and social and transition – a far-reaching shift in for green hydrogen, with resulting
like supply political consensus to occupation of how the world produces and cost reductions; utility-scale
chain space by wind energy; supply consumes – will depend on storage solutions; interconnections
geopolitics, chain resource impacts on ensuring the industry’s growth which support response from the
social impacts, economics and on natural paradigm is sustainable, just and demand side; and last but not least,
disinformation, environments; the need for industry socially responsible, while logistical infrastructure like
cybersecurity and materials circularity; market resting on a clear and viable highways, ports and charging
cryptocurrencies.3 readiness of enabling technology economic proposition. stations, among others.
for renewables penetration;
Evolving events, like the sweeping buildout of grid and other Wind energy in a changing world IRENA estimates that annual
international sanctions applied to infrastructure; and availability of a We have set the destination: Scaling transition-related investment in the
Russian entities after Russia’s trained workforce, among others. up annual wind energy installations energy system must increase by
invasion of Ukraine, will also by four times in this decade to get 2.7 times in this decade, from $2.1
impact the growth trajectory for The impact of these challenges on on-track for a 1.5°C world. The trillion in 2019 to $5.69 trillion each
wind energy. In some countries, wind energy’s growth will depend global clean energy transition is in year to 2030; the IEA forecasts
the crisis has intensified pressure on how well prepared the industry everyone’s self-interest and will around $4 trillion each year to
to switch to renewables and is to meet them. A stronger and bring net-positive socioeconomic 2030 is required for clean energy
decrease dependency on more sustainable industry could value.4 But the landscape of actors investment.5
(Russian) natural gas, while in emerge from holistic system and dependencies on this journey
other countries it has revived calls planning, supply chain is vast and profound, forcing us to These investments will boost
for shale gas extraction and transformation and positive look beyond long-term forecasting global economic growth, while
nuclear power. community engagement, spurred based on ceteris paribus helping to avoid the costs of
by a fundamental redistribution of assumptions. adapting to and compensating for
We can already discern a
landscape of challenges, both in 3. Technological advances can have unforeseen consequences on the speed and stakes of the energy transition. For instance, Bitcoin mining now accounts for 0.4% of the world’s energy
consumption, using more electricity in a year than Belgium, according to the Cambridge Bitcoin Electricity Consumption index. Miners in China have an outsize impact due to reliance
the short term and beyond 2030, on coal-powered generation.
which could inhibit the growth of 4. A 1.5°C pathway would increase GDP growth by 2.4% within the decade to 2030, compared to current policies, and global economy-wide employment would be 1.4% higher than
average, translating to 26 million additional jobs. See: World Energy Transitions Outlook: 1.5°C Pathway, IRENA, 2021.
wind. These range from: a slow 5. IRENA (2021), World Energy Transitions Outlook: 1.5°C Pathway, International Renewable Energy Agency, Abu Dhabi. IEA (2021), World Energy Outlook 2021, IEA, Paris.

18 GWEC.NET
Introduction
unfettered climate change. “disorderly,” as some analysts have The global economy is still heavily reputation of the wider energy
Continued global economic labelled it.7 Areas which resist dependent on fossil fuels. Global sector – runaway growth at high
growth will benefit the expansion adapting to the transition will lose concentrations of CO2 in the cost to the environment and human
of renewable energy, with more competitive advantage, and be less atmosphere rose faster in 2020 health, procurement practices
resources and investment resilient to shifts in capital flows. than in the entire last decade, and which are not always equitable or
available for transition-enabling Those who do actively invest in the increased further through 2021.9 transparent, and misinformation
technology, infrastructure and transition must carefully manage The last five years (2017-2021) saw campaigns which breed public
systems. disruption to livelihoods to the hottest average surface distrust, to name a few. These
maintain social cohesion. Poorly temperatures on record in large practices have eroded social
But as global GDP increases,6 the regulated power markets could parts of North Africa, the Middle consensus around energy system
world is not necessarily growing create trading monopolies or East, East Asia, the eastern United priorities, and where space is
wealthier. Extraordinary devalue the cost of carbon, while States (US) and Latin America.10 needed for renewables to grow,
challenges have exposed geopolitical conflict could impact Despite its dimming economics, they have sometimes set the stage
inequality and disparities between global supply chain security and coal is not yet out the door, and is for false dichotomies between the
countries, from the COVID-19 grid integration. not leaving soon enough. Coal public interest and that of industry.
pandemic to spatial competition. power generation reached a
Major natural disasters linked to The march for clean energy has record-high in 2021, riding the We will have to prepare to
climate change are now a volatile been called “unstoppable.” This rebound of economic recovery, overcome these hurdles on the
threat to emerging markets and rhetoric is marked by the historic and coal demand is set to achieve path to a 1.5°C world and on the
developing economies (EMDEs). agreement on phasing out coal an all-time high from 2022 to Race to Zero.12 The sooner we can
The modes of trust and and inefficient fossil fuel subsidies 2024.11 acknowledge and address the
cooperation between countries in the Glasgow Climate Pact in known and unknown challenges of
and communities will become November 2021.8 But after two With such high stakes, we cannot the wind industry’s growth, the
ever more important for an tough years confronting a afford the future of renewable clearer our pathway ahead.
effective shared response to pandemic, to a great extent, the energy to be left on auto-pilot. The
climate change. world appears to be getting back energy transition calls for a hard
to “business as usual” (BAU) when look at some of the historical
We are in an age where energy is it comes to energy. practices which have damaged the
at the epicentre of geopolitics, and
renewables are equated with 6. The IMF World Economic Outlook forecasts real GDP growth increase of 4.4% in 2022 and 3.8% in 2023, with higher growth in emerging markets and developing economies. https://
www.imf.org/en/Publications/WEO/Issues/2022/01/25/world-economic-outlook-update-january-2022
freedom. If countries and 7. https://www.weforum.org/reports/global-risks-report-2022/shareables; https://www.mckinsey.com/business-functions/sustainability/our-insights/the-economic-transformation-what-
communities work against each would-change-in-the-net-zero-transition
8. https://gwec.net/cop26-a-wind-industry-score-sheet/
other on matters like job creation, 9. https://public.wmo.int/en/media/press-release/greenhouse-gas-bulletin-another-year-another-record. It is worth noting that inertia in climate systems means that global warming and
critical economic sectors, climate the resulting impacts will continue for some time, even after reaching net zero emissions (see: https://www.carbonbrief.org/explainer-will-global-warming-stop-as-soon-as-net-zero-
emissions-are-reached).
policy and integration of 10. https://public.wmo.int/en/resources/united_in_science
renewable energy, the transition to 11. https://www.iea.org/news/coal-power-s-sharp-rebound-is-taking-it-to-a-new-record-in-2021-threatening-net-zero-goals
12. The IPCC defines net zero emissions, or carbon neutrality, as “achieved when anthropogenic emissions of greenhouse gases to the atmosphere are balanced by anthropogenic
clean energy will be slow and removals over a specified period.” https://www.ipcc.ch/sr15/chapter/glossary/

Introduction
Transversal challenges to wind energy’s growth in the short and long term
System Design Coal phaseout: The pace of countries exiting and retiring coal-based generation.
Coal phaseout Proposition versus gas: The enabling policy environment for wind energy versus natural
Just transition and inclusion Proposition versus gas
gas/LNG, based on market and socioeconomic value.
Workforce Policy ambition: The visibility and predictability of countries’ wind energy growth targets,
System Design
and the reflection in transparent and long-term procurement schemes.
Skilled workforce Policy ambition
Adopting system value: The shift away from marginal value-based electricity markets
towards a system value framework.
Society Permitting timelines: The ease of obtaining the necessary permits, licenses and approvals
Energy access Adopting system value for wind project deployment, including legal challenges.
Social acceptance: The scale of support versus opposition encountered by wind projects
Infrastructure in host communities.
Public consensus: Public education and awareness about climate change and the needs
Grid and transmission Permitting timelines of the energy transition, and the resulting social and political support for wind energy.
Land use: Availability of land and seabed for wind energy projects.
Supply Chain Supply chain costs: The rise and certainty of market prices for materials, minerals, metals
and other inputs to the wind energy supply chain.
Reliability of RE supply Social acceptance Circularity: The reuse, repurposing, recyclability and recovery of wind farm components
including wind turbines, and the reduction of waste and environmental impacts
Technology generated in the wind project lifecycle in line with a circular economy approach.
Society
Technology Storage and green hydrogen: The pace of cost reduction and commercialisation of
Storage and green hydrogen
Public consensus enabling storage and green hydrogen technologies, which will boost demand for wind
energy.
Land use
Reliability of RE supply: The pace of cost reduction and integration of enabling
Circularity
balancing and flexibility technologies, such as demand-side response tools, which will
Supply chain costs enable large-scale integration of wind energy.
Infrastructure Grid and transmission: The pace and scale of grid reinforcement, buildout and
Supply Chain modernisation, ensuring sufficient grid availability to increase wind deployment.
Energy access: The expansion of infrastructure to enable universal clean energy access
and electrification of power and other sectors.
Short Term (next 5 years) Long Term (10 years and beyond)
Workforce Skilled workforce: The availability of a ready and able workforce with the necessary
training and skills for the wind industry.
Short term (within next 5 years) and long term (more than 10 years ahead) challenges which could slow down Just transition and inclusion: The socioeconomic welfare of stakeholders concerned with
deployment of wind energy. Nodes closer to the outer circle are considered more severe challenges, while nodes closer the energy transition, and the development of a diverse and inclusive workforce which
to the centre are considered low or moderate challenges can harness all talents to grow the wind industry.
Sources: GWEC Market Intelligence and a survey of GWEC’s national wind and renewable energy industry association members, Q1 2022. Note: This graphic is not inclusive of all challenges and factors impacting the growth of wind energy in different markets, and is
meant to be used as a general guide to transversal issues.

20 GWEC.NET
PART ONE: SYSTEM DESIGN
Part One: System Design

Following the darkest periods of bounced back nearly 5% last generation and accelerate efforts natural gas and power prices have
COVID-19 in 2020 and the first year. towards the phasedown of hit all-time highs, particularly in
half of 2021, economies are unabated coal power and phase- Europe and Asia – is a
re-opening and global energy On this road to economic recovery, out of inefficient fossil fuel consequence of an outdated
demand is on the rebound. The have we learned any lessons about subsidies.”2 system.
temporary curtailment of global decarbonising the global energy
CO2 emissions was reversed by system? The global community has But there is a dramatic mismatch Gas market tightness has been
the end of 2021, driven by a surge certainly reached a consensus on between clean energy targets in driven by downtime of gas
in coal and gas generation.1 what needs to happen: By the end NDCs and national energy infrastructure, reduced supply from
Worldwide oil consumption is set of COP26, all 197 Parties to the policies; according to IRENA, key exporters, a steep post-
to return to pre-pandemic levels, Paris Agreement agreed on a call energy policy in 178 countries is pandemic rise in energy demand
while natural gas consumption to “rapidly scale up clean power insufficient to achieve their and lower-than-usual storage levels
respective NDCs.3 There is a clear which have decreased system
gap between words and action, as flexibility.4 As many electricity
Contribution of NDCs and other pledges to limiting global warming, as of November 2021 NDCs themselves are non-binding markets depend on gas as a
pledges – national and sub- marginal resource to determine
2.8oC
national policy implementation is wholesale prices, the resulting
60 2.7oC urgently required to enact the wholesale price spikes have
2.1oC
50 -4 energy transition. imposed a heavy burden on all
GHG emissions (GtCO2e)
-5
-2
actors in these power markets, from
40
-23 Course corrections are not large businesses to households.
59
30 1.5oC happening with the urgency
20
required to stave off the risks of a Coal prices also spiked last year,
continued fossil fuel-based with a resurgence in power
25
10 global energy system, which demand driving prices up four-fold
0
must meet the rising pressures of from September 2020 to August
Business-as-usual Current policies Latest NDCs NDCs and other Gap to 1.5oC 1.5oC Scenario power demand, economic 2021.5 This was primarily due to by
2030 (including the mitigation pledges Scenario
(pre-1st NDCS) initial NDCS) such as net zero growth and electrification. The a return of industrial and economic
current energy crisis – where activity in coal-dependent markets
1. Global carbon emissions declined by 5.4% in 2020 due to pandemic-related impacts, but are forecast to have
Sources: IRENA (2022), NDCs and renewable energy targets in 2021: Are we on the right path to a climate-safe future?, International Renewable rebounded by 4.9% in 2021. See: https://www.globalcarbonproject.org/carbonbudget/21/files/Norway_CICERO_
Energy Agency, Abu Dhabi. The main data used in this analysis comes from UNEP (2021) except the ‘Pre-1st NDC’ estimate of 59 GtCO2e GCB2021.pdf.
which was sourced from (WRI, 2021a) also based on analysis from UNEP (2021a) and Climate Watch. Although the data and methodologies 2. https://gwec.net/cop26-a-wind-industry-score-sheet/
tends to vary in some aspects across different sources, the overarching message in all remains consistent. 3. NDCs and renewable energy targets in 2021: Are we on the right path to a climate-safe future?, IRENA, 2022
4. https://www.iea.org/commentaries/europe-and-the-world-need-to-draw-the-right-lessons-from-today-s-natural-gas-crisis
.

22 GWEC.NET
in Asia, such as China, India, Japan gaining a footing. While wind Demand and supply shocks in coal and natural gas
and South Korea, as well as in companies are even paying back
Europe and the US. Some the difference between agreed 50 300
disruptions to coal exports from tariffs and inflated wholesale
Indonesia, Australia and other prices to governments under a Natural gas (Asia)
40 Natural gas (Europe) 250
countries also played a part. Contracts for Difference (CfD) Coal (RHS)
model, or are tied into long-term
US$/mmbtu
US$/mt
High power prices have depressed fixed-price power purchase 30 200
production in energy-intensive agreements (PPAs) which do not

industries like metals and allow for price readjustments, fossil 20 150
fertilisers production, further fuel generators are seeing record
inflating prices for these levels of windfall profits. 10 100
commodities. Transitory inflation
driven by high energy prices, and Energy market design which is
0 50
the ripple effect of price increases based on short-term marginal
February
March
April
May
June
August
July
September
October
November
December
January
across sectors, especially power- costs and does not account for
intensive ones, are being felt long-term system value has
across many economies.6 Elevated created a distorted set of signals.8
2021 16, 2021.
Sources: Bloomberg; World Bank. Note: Last observation is December
inflation is expected to near 4% in Instead of incentivising renewables,
advanced economies and 6% in wind and solar are now under
EMDEs through 2022, largely due pressure to compete at prices that system planners are serious about construction, grid connection and
to the surge in energy prices.7 lead to wafer-thin margins, while these priorities, then energy dispatch for renewables-based
fossil fuel supply shortages are market design must shift to reflect generation; accounting for the
The ongoing power price surges bolstering the continued the systems of the future: flexible, socioeconomic and environmental
have sharpened the call for shifting investment case for fossil fuels. responsive to demand, reliable and costs of carbon; and realigning
to indigenous and cost-competitive dependent on a majority share of electricity markets to consider
wind and solar energy. However, Governments and regulators renewable energy. system value more widely.
renewable energy developers and must untangle the Gordian knot Technology innovation and scale
supply chain actors are under around energy market design to The necessary actions include: are also necessary for supporting
intensive pressure to deliver clean shore up security of supply, removing direct and hidden stability, flexibility and
power at increasingly competitive support sustainable pricing and subsidies or advantages for fossil responsiveness as fossil fuels are
prices, even in markets where prepare for the clean energy fuels generation; prioritising land/ phased out (see Part Four:
utility-scale renewables are still transition. If policymakers and seabed allocation, procurement, Technology).
5. https://theconversation.com/the-coal-price-has-skyrocketed-in-2021-what-does-it-mean-for-net-zero-166117
6. https://www.spglobal.com/platts/en/market-insights/latest-news/lng/090221-analysis-high-lng-prices-trigger-gas-demand-destruction-in-chinas-downstream-sectors; https://www.brookings.edu/wp-content/uploads/2021/12/FP_20211214_global_
energy_crisis_gilbert_bazilian_gross.pdf
7. https://blogs.imf.org/2022/01/28/global-inflation-pressures-broadened-on-food-and-energy-price-gains/
8. A system value approach, as opposed to comparison of energy sources on Levelised Cost of Electricity (LCOE) alone, accounts for Interplay of positive (e.g. lower carbon emissions, high market value, reduced fuel costs etc.) and negative effects
(e.g. additional grid infrastructure costs, re-dispatch costs/curtailment etc.) of a power generating technology on the system. See: GWEC, Global Wind Report 2019.

System value, a “holistic investment.9 System value Fossil fuels-based generation

framework that evaluates accounts for a range of factors, should be more accurately priced
economic, environmental, social, including the costs attached to for the costly social, economic and
and technical outcomes of externalities like carbon environmental burdens attached to
potential energy solutions,” should emissions, water footprint, them. Once the impacts of
be adopted by governments for impacts to human health and air externalities like climate change,
impactful policy and cost-effective quality and resilience and security human health and air pollution are
of energy supply. It also addresses factored into electricity market
investments required in design and taxation systems,
Sustainable energy market design
electricity access, grid flexibility, market signals should provide a
system upgrades, energy clear pathway to a rapid
Infrastructure productivity and systemic replacement of fossil generation by
Adequate grid efficiency. Finally, these are renewables, as well as electrification
infrastructure investment
weighed against the economic of key non-power sectors. It is
benefits of jobs and positive essential that markets are designed
Decarbonisation solutions Proactive permitting socioeconomic impacts, and the to enable a rapid transition to
Sector coupling, energy Streamlined processes for
permitting and consenting of
market attractiveness for FDI and renewable energy sources like
efficiency, storage and other
technologies RE projects competitiveness of investment. onshore and offshore wind energy,
which carry the lowest quantifiable
As volumes of wind and renewable external costs to energy systems
energy increase in energy systems, and society.10 Inappropriate market
Procurement Fair Pricing this approach also highlights where signals not only confuse investors,
Transparent RE procurement Fair renumeration for RE and investment is needed to develop but even penalise those willing to
pipeline, guided by amitious
capacity targets A sustainable prcing mechanisms
that reflect burdens of carbon
more flexible and resilient energy take the lead.
energy market systems, such as in grid and
transmission infrastructure, Systems with high shares of
digitalisation, balancing solutions renewables (around half of power
and storage. The result of supply scaling up to 100%) are
expanding our focus from already in operation around the
Policy environment Revenue opportunities Levelised Cost of Electricity world, from Norway to Costa Rica to
Long-term political Enabling bilateral PPAs, in
commitment to enacting the addition to incentives like tax (LCOE) to whole system value is New Zealand. Renewables-based
energy transition credits and RPS inclusive and wide-lens decision- systems are technically and
making for the clean energy economically feasible but require
transition. robust investment and a level
System value
Emphasis on system value of
RES and a level playing field 9. https://www.weforum.org/projects/system-value#:~:text=System%20Value%20is%20a%20holistic,beyond%20cost%20
for energy sources to compete to%20include%20value
10. https://trinomics.eu/wp-content/uploads/2020/11/Final-Report-External-Costs.pdf

24 GWEC.NET
playing field to enable large-scale Global power demand is Average external costs of electricity technologies, US$/MWh
renewable energy deployment. projected to double by 2050 A comparison of the weighted average external costs of electricity technologies, including those related to: climate change; particulate matter
They will also require widescale under current policies. The IEA’s (disease damages to human health from air pollution); resource use of fossil fuels, minerals and metals; non-cancer human toxicity; land use and
soil quality.
electrification to ensure that 1.5°C pathway requires a trebling
renewables can displace the role of of electricity demand by 2050; Wind - Offshore
fossil fuels in powering the transport, IRENA’s 1.5°C pathway has even Wind - Onshore Non-EU G20 EU27
heating and industry sectors. stronger emphasis on
Solar - CSP
electrification and the role of
Solar PV (rooftop and utility)
Security in the age of the clean renewable electricity.11 As
energy transition electricity takes a larger role in Small hydro (<10MW)
As in the 1970s energy crisis, powering economies, it is Large hydro (>10MW)

geopolitics and ongoing imperative to insulate the power Geothermal
turbulence in power markets sector from the boom-bust cycle Nuclear
demonstrate the hazards of of hydrocarbons by promoting
Biomass
economies relying on finite (and renewables-based generation.
Natural gas
for many, non-indigenous) fuel Oil
sources. Market dynamics are The stakes are high: Energy price Hard coal (including CHP)
vulnerable to supply-side volatility can lead to outages, Lignite coal (including CHP)
geopolitical events, externalities supply insecurity and 0 50 100 150 200 250 300
like pandemic-related lockdowns affordability issues. Consumers 2018 US$/MWh
and adverse weather patterns. are already shouldering
unexpectedly high tariffs in the Source: Final Report External Costs: Energy costs, taxes and the impact of government interventions on investments, European Commission,
authored by Trinomics, 2020. Note: Values originally provided in 2018 Euros, and have been converted to US Dollars at the average 2018
The impacts of climate change will present crisis; in the UK, for conversion rate. External costs include national internalisation of carbon tax and pricing.
further impose pressure on example, electricity bills are set
markets, for instance with drought to increase by nearly 50%,
and La Niña weather patterns pushing 10% of households into nor a bug in current energy The reserve capacity which serves
already affecting hydropower energy poverty.12 systems; it is a feature, created by as the conventional security buffer
generation. Severe winter or energy system design choices that to ensure sufficient generation
summer periods can trigger Liquefied natural gas (LNG) spot value short-run marginal capacity for power systems, as a
spikes in energy demand for market prices in Asia have hit both optimisation, largely ignore percentage of peak power demand,
heating or cooling purposes, an all-time low and an all-time high interconnected markets, and fail to may be an outdated approach. To
tightening supply of gas and in the last two years. As one balance between central enable greater shares of wind and
driving up power prices once Brookings Institute report notes, regulatory control and solar generation, energy systems
again. this “volatility is neither accidental decentralised market forces.”13 need to become responsive to daily
11. For instance, IRENA foresees 78,700 TWh generation by 2050 in its scenario, and more than half of total final energy consumption (TFEC) comprising electricity. See: IEA, World Energy Outlook 2021; IRENA, World Energy Transitions Outlook, 2021.
12. https://www.bloomberg.com/news/articles/2022-02-02/u-k-price-shock-will-pitch-1-in-10-into-energy-poverty
13. https://www.brookings.edu/wp-content/uploads/2021/12/FP_20211214_global_energy_crisis_gilbert_bazilian_gross.pdf

Growth of global electricity demand to 2050 in three scenarios for the EMDEs most vulnerable to Lack of grid reliability has led to
the impacts of climate change.14 load shedding in several countries
in Africa, while energy demand is
80 100% Oil The bottom 50% of the world’s only increasing with population
Unabated natural gas
population by income level and economic growth. Public and
Unabated coal
60 75%
Fossil fuels with CCUS
represent only 8.5% of total global development finance should target
Thousand TWh
Hydrogen based income, and contributes a fraction investment in grid stabilisation and
40 50% Nuclear of total CO2 emissions.15 This transmission expansion for such
Other renewables bottom half is concentrated in countries, which can help to
Hydropower sub-Saharan Africa, South Asia, mobilise private-sector investment
20 25% Offshore wind Southeast Asia and to an extent, in renewables. This is especially
Onshore wind
Latin America and the Caribbean. the case in places where
Solar PV
2010 2020 2030 2040 2050 STEPS APS NZE
In these regions, there are higher renewable energy resources are
STEPS APS NZE 2020 2050
shares of households which lack high, and power demand is
modern energy access.16 growing rapidly.17 Africa has some
Source: IEA, World Energy Outlook 2021. Note: STEPS = Stated Policies Scenario based on prevailing policy settings; APS = Announced of the most attractive wind and
Pledges Scenario where all announced net zero pledges and NDCs as of mid-2021 are met in full and on time; NZE = Net Zero Emissions by
2050 Scenario where the global energy sector achieves net zero CO2 emissions by 2050.
System design for the clean solar resources in the world, and
energy transition will require a energy demand is expected to
different approach in regions double on the continent by 2040.
and seasonal energy demand and reserve margin calculation. where energy access is a
supply profiles, as well as more challenge. Deploying large-scale Governments, communities and
flexible with grid-based storage, Leapfrogging the legacy energy wind and solar projects may industry must persist in working
hydropower and other forms of sector where electrification is low depend on the adequacy of grid together to carry out the energy
renewable energy. Integrated Unequal distribution of global infrastructure and affordability of transition in countries with lower
planning is needed between grids income and CO2 emissions access, leading to a combination of electricity access and weaker
operating at subnational, national undoubtedly raises challenges on-grid and off-grid solutions. This network infrastructure. This can
and international level, as well as around “fair shares” of resources may be the case for areas like East include public-private initiatives
forecasting and modelling for dedicated to the mitigation of and West Africa, which have for mobilising investment in grid
demand scenarios that account for climate change. This debate has electrification rates around 50%, as infrastructure, scaling up
increased electrification, become particularly acute in the well as Central Africa which has dispatcher training and increasing
renewables generation and face of the undelivered $100 billion rates closer to 30%. regional integration between
transmission buildout. As discussed in annual climate finance pledged electricity authorities and grids, as
in the Technology section of this at the COP conference in
report, with decentralised and Copenhagen in 2009. The 14. “Climate meeting of ministers discusses national plans to cut methane emissions,” Financial Times, 28 January 2022;
“The broken $100-billion promise of climate finance — and how to fix it,” Nature, 20 October 2021.
real-time response to demand, a discussion has since shifted to the 15. Income level is measured at Purchasing Power Parity after pension and unemployment benefits, and before income
power system becomes dynamic creation of a loss and damage and wealth taxes. See: https://wir2022.wid.world/.
16. Energy access is defined as access to electricity and clean cooking capabilities, such as through the use of improved
and would not be reliant on a static facility under the COP framework stove equipment.

26 GWEC.NET
seen in the West African Power and regionally holistic spatial Global energy-related CO2 emissions by sector
Pool (WAPP). planning, electrification measures
and buildout of green infrastructure Others 5%
A prolonged dependence on can support a low-carbon and
often-imported fossil fuels leaves resilient pathway to urbanisation in Buildings 10%
such countries even more fast-growing EMDEs. Power coal 29%
vulnerable to commodity price
volatility, undermining their energy No half measures in the phaseout
security and curtailing social and of fossil fuels
economic productivity. It also Public and private investors are Industry 23%
deteriorates balance of payments increasingly betting against fossil
at national level, endangering fiscal fuels, due to the political and
autonomy. commercial risks attached. Nearly Power gas 9%
1,500 institutional investors
Where countries have primarily representing more than $39
fixed energy tariff regimes, like in trillion assets under management
Indonesia and to an extent in (AUM) have committed to some Transport 23% Power oil 2%
India, government subsidies are form of fossil fuel divestment –
required to step in at times of high including entities like the Source: IEA, Global energy-related CO2 emissions by sector, Paris, 2021.
prices; the alternative is for state Rockefeller Foundation, founded

utilities to operate at a deficit. by oil profits.19 From shareholder and 2023, while gas demand in imports – a Pyrrhic victory of the
Either way, the public ultimately activism to stakeholder capitalism North America and Europe has transition now reflected in
bears the cost of underinvestment to Environmental, Social and increased to replace coal and consumer bills.
and reliance on obsolete Governance (ESG) investment nuclear generation.20
technology. criteria, there is a deteriorating Improvements to energy security A system transformation to
case for coal generation and a and balance of trade by diversify the energy mix will
Where energy access is a contentious case for gas. decreasing dependency on require coherent demand- and
challenge, renewables-based imported fossil fuel commodities supply-side reform. It cannot be a
power generation should However, this political and are being left on the table. Some series of half-measures, where
leapfrog the legacy energy commercial momentum has not yet countries have transitioned coal energy consumption is targeted
sector, and the risk of stranded translated into a decline in fossil power generation almost entirely (e.g. electric alternatives to gas
assets should be avoided as fuel demand. Coal demand is to natural gas, and still depend on boilers in homes) without efforts to
much as possible.18 Integrated on-track for record highs in 2022 inelastic and unsustainable fuel scale up renewable power
17. https://www.giz.de/en/downloads/Study_Renewable%20Energy%20Transition%20Africa-EN.pdf
18. Stranded assets are assets which cannot provide an economic return before the end of their economic lifetime, due to economic, physical or regulatory changes associated with the clean energy transition. For example, a coal plant which still has
30 years of operating lifetime but can no longer sell power to a state offtaker due to policy shifts away from fossil fuels generation. See: https://carbontracker.org/terms/stranded-assets/.
19. https://oilprice.com/Energy/Energy-General/Investors-With-392-Trillion-In-Assets-Pledge-To-Divest-From-Fossil-Fuels.html
20. https://www.iea.org/news/coal-power-s-sharp-rebound-is-taking-it-to-a-new-record-in-2021-threatening-net-zero-goals

will also likely incorporate is only possible with strongly

hydrogen fuels for shipping and coordinated cross-sector policy
possibly aviation. The ramp up of across multiple levels of
hydrogen production will be most government. Renewable energy
effective if large-scale renewables ambitions should be mainstreamed
deployment is coordinated with across energy, economic and
demand centres for green national security portfolios, not to
hydrogen, such as steel mention workforce departments
production centres. that help develop the human capital
to serve a future renewables-based
For policymakers, power sector system. This level of policy
policy should take advantage of coordination will be needed to
the cost-competitiveness and strengthen market signals in
value contribution of wind and support of the energy transition
solar projects, as well as the and sustain economic productivity
falling costs of battery energy while exiting fossil fuels.
storage systems (BESS), when it
comes to designing an energy Is coal in a death spiral yet?
mix.21 Mitigation requirements The share of cancelled coal plants
should be integrated into the in the global pipeline has been
design stage of infrastructure, increasing steadily over the past
such as buildings and coastal five years, and in 2021, major
planning where ports may be public financiers of coal projects
equipped for large-scale offshore like China, Japan and South Korea
wind projects, and considered in pledged to end international
the industry sector, such as in the financing of coal projects. At
standards for refining processes COP26, nearly 40 signatories
generation. Similarly, the renewables deployment. and construction materials. For pledged to end international
strengthening of carbon heavy industry, cleaner fuel public support for unabated fossil
compliance markets, such as in Undertaking a transport alternatives and methods demand fuels by 2022, including
the EU’s Emissions Trading decarbonisation scheme will investment in research and development banks like the
Scheme and proposed Carbon require investment in large innovation. Agence Française de
Border Adjustment Mechanism volumes of utility-scale wind and Développement (AFD), East
(CBAM) and China’s National solar projects, as well as This virtuous cycle of African Development Bank (EADB)
Emissions Trading Scheme, must transmission and distribution decarbonising the energy system and European Investment Bank
be accompanied by rapid and infrastructure, to provide clean
sustained efforts to accelerate power to passenger vehicles. It 21. https://about.bnef.com/blog/global-energy-storage-market-set-to-hit-one-terawatt-hour-by-2030/

28 GWEC.NET
(EIB).22 But the global consensus to the environmental and social Global coal plants in operation by plant age and type
phase down coal generation has hazards this poses, coal capacity
not been accompanied by also yokes countries to a Plant Age
concrete international initiatives for dependency on a volatile and often 0-9 years
rapid retirement or cancellation of imported energy commodity. 10-19 years
plants. 20-29 years
In late 2021, coal shortages in 30-39 years
Nearly 700 GW of current China sparked widespread power 40-49 years
operating coal generation, outages and industrial shutdowns 50 plus years
equivalent to one-third of global in the northeast of the country, 0K 100K 200K 300K 400K 500K 600K 700K
capacity in operation, have a plant while India experienced rolling Megawatts
age of 9 years and below; without outages due to coal stockpiles Combustion technology
early retirement, these plants could nearing a three-year low amid Ultra-supercritical Supercritical
Subcritical IGCC
continue to operate for another 3-4 high coal prices.25 Due to coal CFB Unknown
decades.23 Asia accounts for the shortages at home, in January 2022
Source: Global Energy Monitor, Global Coal Plant Tracker, as of July 2021. Note: IGCC = Integrated Gasification Combined Cycle.
vast majority of the new coal Indonesia, the largest exporter of CFB = Circulating Fluidized Bed.
capacity built over the last two coal globally, temporarily banned
decades, primarily in China, India coal exports. This caused a spike current backlog of consumer and especially felt in EMDEs, where
and Southeast Asia. A further 300 in global coal prices to $249/tonne industrial demand built up over the recovery is projected to be slower.
GW of global coal plant capacity is (from a historical $50-90/tonne pandemic has been met and Energy transition-related
currently under construction or range) and brought uncertainty to lending facilities retract, the World investments already fell 10%, or
approved, as of mid-2021. regional markets.26 Bank estimates that global growth $67 billion, from 2019 to 2020, as
will decelerate through 2023.27 investors shifted capital to more
The existing global coal fleet is set The knock-on effects of coal- developed economies amid the
to generate power and emit GHGs related energy insecurity and This deceleration will detract from pandemic.28
for decades to come. Without early stranded asset risk will only government resources to enact
retirement, the cumulative CO2 increase as the world faces a energy system transformation, EMDEs will be more vulnerable to
emissions of existing coal bumpy road to economic such as through a grid a slow transition, especially those
generation by 2040 will be five recovery, factoring in inflation, modernisation programme or which rely on domestic
times the entire energy sector’s national debt burdens and energy efficiency measures. commodities like coal and gas for
CO2 emissions in 2018.24 Beyond income inequality. Once the Thinning public resource will be export revenue (e.g. Indonesia or
22. https://ukcop26.org/statement-on-international-public-support-for-the-clean-energy-transition/
23. https://globalenergymonitor.org/projects/global-coal-plant-tracker/dashboard/
24. “On the basis that plant operations and economics are in line with stated policies, CO2 emissions from the existing coal fleet would emit a cumulative 175 GtCO2 over the period to 2040 – equivalent to 5 times total energy sector emissions in
2018 – despite annual emissions steadily declining to about 60% of today’s levels.” See: https://www.iea.org/reports/the-role-of-ccus-in-low-carbon-power-systems/the-co2-emissions-challenge.
25. https://www.reuters.com/world/china/china-energy-crunch-triggers-alarm-pleas-more-coal-2021-09-28/; https://www.bloomberg.com/news/articles/2021-10-04/energy-crisis-deepens-in-india-as-power-plants-brace-for-outages
26. https://www.fitchratings.com/research/corporate-finance/apac-thermal-coal-prices-to-ease-on-end-of-indonesia-export-ban-14-02-2022
27. https://www.worldbank.org/en/news/press-release/2022/01/11/global-recovery-economics-debt-commodity-inequality
28. https://about.bnef.com/blog/emerging-market-clean-energy-investment-slid-as-covid-19-spread/

Case study: Capturing green recovery opportunities from wind

power in developing economies
The benefits of wind energy are The five countries examined in the
wide-ranging and expand beyond report are Brazil, India, Mexico, South
clean power generation – they include Africa and the Philippines. Across these
sustainable job creation, public health five countries, a green recovery
cost savings which would otherwise be approach could generate nearly 20
spent redressing the impacts of fossil GW of additional wind power capacity
fuel generation, water consumption and an additional 2.23 million jobs
savings which would otherwise be compared to a BAU scenario. This
used for thermal generation, and a would in turn potentially save an
significant capital injection in a local additional 714 million metric tons of
value chain. CO2e over the 25-year wind farm
For developing economies facing the lifetimes.
difficult balance of restarting economic In Brazil, for example, the potential
growth while maintaining energy upsides compared to a BAU scenario
security and resilience, investment in equate to nearly 5 GW of additional
the wind sector offers a pathway to a installed wind capacity, half-a-million
robust and sustainable recovery. more jobs created in the wind value
In Q1 2022, GWEC released a report chain, 8 million more homes powered
in collaboration with BVG Associates, by clean electricity, and more than 180
“Capturing green recovery million metric tons of CO2e saved.
opportunities from wind power in The study identifies three common
developing economies,” which barriers facing wind energy
reflects a study of wind energy deployment in developing economies
potential in five emerging economies and provides recommendations on
over the next five years, from 2022- how these barriers can be overcome:
2026, with the aim of highlighting the greater clarity and ambition for wind
vast and largely unexploited energy policy; investing to expand
socioeconomic and environmental transmission system infrastructure; and
opportunities attached to wind simplifying permitting frameworks for
energy. renewable energy.

30 GWEC.NET
Russia) or which draw a large

portion of GDP from high-
emissions sectors like
manufacturing and agriculture
(e.g. India, South Africa, Thailand
or Turkey).29 Drastic expansion of
renewables capacity and industrial
decarbonisation will be needed to
avoid the risk of stranded assets
and energy insecurity.
The economics of renewable

energy technology are there: It
would be cheaper to build new
wind and solar plants than
continue operating two-thirds of
the world’s existing coal capacity
as of 2021, according to analysis
by TransitionZero.30 The rapid concerns around transparency, construction (30.3 GW in given the international solidarity
closure of coal plants worldwide accountability and valuation of Indonesia and 5 GW in the around coal phaseout and
beginning in 2022, and assets to reach a fair and Philippines, as of July 2021).32 deteriorating financing
compliance with decommissioning balanced formula for environment for coal. It will be
and phaseout schedules already in compensation and future But without effective guardrails, an important to ensure that financing
place, is crucial to enacting the investment. For instance, the Asian early retirement mechanism could for coal retirement is not used to
transition. This will result in Development Bank’s (ADB) provide a source of revenue to coal subsidise further fossil fuels
enormous savings in energy Energy Transition Mechanism asset owners, often state-owned or generation, but shifted into projects
procurement and public health initiative aims to purchase high- state-affiliated entities, under a which enable the energy transition.
costs, which can then be funnelled emissions coal plants locked into valuation covering the full
towards investment in clean long-term PPAs in Indonesia and remaining lifetime of the plant. Natural gas in a disorderly and
energy, storage and flexibility the Philippines, and retire them Book values for buyouts should delayed transition
technologies. within 15 years.31 Both countries neither be fully insulated from the The phaseout of coal is inevitable
have a significant pipeline of coal market pressures of – the question is whether it will be
Early retirement mechanisms are projects which have been decarbonisation or enacted in time. Along the way,
being piloted, but must address announced, permitted or under underperformance, particularly natural gas and LNG are seen by
29. https://www.mckinsey.com/business-functions/sustainability/our-insights/how-the-net-zero-transition-would-play-out-in-countries-and-regions
30. https://www.transitionzero.org/blog/world-must-close-nearly-3000-coal-plants-by-2030
31. https://ieefa.org/ieefa-coal-lock-in-in-southeast-asia-presents-a-challenge-for-the-asian-development-banks-coal-retirement-plan/
32. https://globalenergymonitor.org/projects/global-coal-plant-tracker/summary-tables/

some as “transition technologies” previously formed around Market volatility and uncertain prices in the EU measured over the
or “bridge fuels” which can regional hubs in North America, public support same period.39 This is a deeply
support countries in the period the Asia Pacific and Europe – To date, LNG procurement has not unfavourable comparison to
between reducing coal and exacerbates this risk, as the rise followed the more generous coal renewable energy prices captured
nuclear dependency and of LNG and long-distance model, which benefits from at auction worldwide, which
increasing renewables transport pipelines link regional long-term agreements and averaged $49.2/MWh in 2019 for
generation. Today, the global gas markets closer together.35 government guarantees.38 onshore wind and $55.8/MWh for
plant capacity totals around 1,800 Contracting in the LNG industry solar.40
GW, with the largest absolute LNG, offering easier transport of has slowly evolved over the last 15
volumes operating in the US, gas in a liquefied state, has made years away from long-term Gas is still generally exempt from
Russia, China, Japan and Iran.33 market interconnectedness more contracts (characterised by price the type of financing restrictions
There is more than 615 GW acute. Trade of LNG grew by caps, floors, “S” curves, etc.) imposed by development donors
further under proposal or more than 80% between 2006 and towards shorter and more flexible and export credit agencies (ECAs)
construction, with the largest 2018, while its share of the global contracts supplemented with sport on coal. But as with coal, continued
pipelines in Asia (China, Vietnam gas trade rose from 26% in 2000 market purchases. public support for gas production
and Bangladesh) as well as the US to 45% in 2020.36 The main and storage is not guaranteed –
and Brazil. exporting countries are Australia, This does not, however, account for this was already targeted in an
Qatar, the US, Malaysia and power consumption fluctuations, international pledge at COP26 –
Competition with coal has Algeria; other countries which changes in weather patterns, or which will impact pricing
generally stabilised wholesale have ambitions to become large policy shifts towards carbon pricing dynamics in the sector.41
prices in the power sector, as producers are Russia, and a cleaner energy matrix which
both coal and gas function as the Mozambique and Argentina. would impact the demand side. State-owned or state-affiliated
marginal resources to set Demand for LNG is concentrated European Title Transfer Facility entities are somewhat insulated
prices.34 But as coal is being in Asia (Japan, China and South (TTF) spot market gas prices hit from shareholder pressure;
phased out, power markets are Korea), although the recent $135/MWh in December 2021 – a however, they are still subject to
left exposed to the volatility of Russia-Ukraine conflict is likely to 429% increase from prices in 2019, public opposition. For instance, the
gas prices. The increasingly prompt demand for LNG to pick which in turn contributed to a 230% Netherlands amended legislation in
global nature of gas markets – up in Europe.37 increase in wholesale electricity 2018 to prohibit new buildings from
being connected to the natural gas
33. https://globalenergymonitor.org/projects/global-gas-plant-tracker/
grid, while New York City followed
34. This is the general case in most hours of the year, with gas plants providing the price-setting units for the largest share of hours. Other factors include market prices in interconnected suit with the same measures in
countries, carbon pricing floors and other determinants. See: https://neon.energy/Blume-Werry-Faber-Hirth-Huber-Everts-2021-Eye-on-the-price.pdf
35. https://www.brookings.edu/wp-content/uploads/2021/12/FP_20211214_global_energy_crisis_gilbert_bazilian_gross.pdf
2021. For companies exposed to
36. https://www.enerdata.net/publications/executive-briefing/lng-rise.html capital markets, there is a growing
37. https://www.offshore-energy.biz/germany-to-break-free-from-russian-gas-with-two-lng-terminals/
38. Most coal contracts are still settled against benchmark indices, which still exposes them to price fluctuations.
movement of institutional and
39. TTF is a natural gas trading point in the Netherlands which uses Euros/MWh for trades. See: https://fsr.eui.eu/skyrocketing-energy-prices/. private investors pledging to divest
40. https://www.irena.org/Statistics/View-Data-by-Topic/Policy/Renewable-Energy-Auctions
41. The pledge sought to “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited and clearly defined circumstances
fossil fuels assets, including all or
that are consistent with a 1.5°C warming limit and the goals of the Paris Agreement.” See: https://ukcop26.org/statement-on-international-public-support-for-the-clean-energy-transition/. some types of gas projects.

32 GWEC.NET
IEEFA estimates that fundamental gas generation under a “Do No Methane emissions by sector and region, 2017
project constraints and unfavourable Significant Harm” (DNSH) principle
market conditions could already of decision-making which would
reduce the pipeline of LNG projects avoid activities that undermine
Metric tons (millions)

40
in South Asia and Southeast Asia by climate change mitigation,
more than 60%, as of December environmental protection, pollution
2021.42 These market constraints prevention and protection of 20
include commodity price volatility, biodiversity.
foreign exchange volatility, higher
power tariffs for end-users, higher Scope 1 and 2 emissions only
public subsidy burdens, fuel supply account for around one-quarter of
Northern Africa
Equatorial and Southern Africa
Southeast Asia, Korea and Japan
South Asia
China
North America
Brazil
Rest of Latin America
Europe
Central Asia
Middle East
Russia
insecurity, stranded asset risk for average full lifecycle GHG emissions
investors and more. A further 20% of for natural gas.43 There is a wide
the remaining pipeline faces risk of spread in emissions intensity
delays in reaching financial close, depending on the source and trade
particularly in Vietnam, the route; the IEA has found that the top
Philippines, Myanmar and 10% of production is around four Coal mining Oil and gas Landfills and waste
Bangladesh. times more emissions-intensive than Livestock Rice cultivation
the bottom 10%. LNG projects, which

Accounting for the environmental must cool the LNG with massive Source: Saunois et al, The Global Methane Budget 2000-2017. Earth Syst. Sci. Data, 12, 1561–1623, 2020.
impact of gas compressors before shipping, are

Investment in technologies which among the most emissions-intense in An increasingly prominent factor that of CO2, when measured over
can lower emissions intensity have the oil and gas sector.44 The undermining the comparative a 20-year period.45 This prompted
been floated as a solution for investment in enhancing traditional environmental benefits of gas 105 countries to sign the Global
“cleaner” gas, from reducing gas operations to make them generation to other fossil fuels is Methane Pledge at COP26,
methane leakage to procuring “state-of-the-art” could instead be methane leakage and emissions, whereby the EU member states,
renewable power for gas plant shifted to renewable energy, from the production stage to the US, Japan, Brazil, Canada,
operations. However, taking full GHG especially to sectors like offshore distribution. The IPCC’s 2021 Vietnam, the Philippines and other
lifecycle emissions into account and wind where oil and gas companies report found that methane countries commited to reducing
including emissions from can leverage their experience in concentration in the atmosphere is methane emissions by 30% by
combustion of natural gas, it is large-scale engineering and at an all-time high, and has a 2030, compared to levels in
difficult to justify investment in new construction projects. global warming impact 84 times 2020.46
42. http://ieefa.org/wp-content/uploads/2021/12/Examining-Cracks-in-Emerging-Asias-LNG-to-Power-Value-Chain_December-2021.pdf
43 Scope 1 emissions cover direct emissions from the gas industry, while Scope 2 emissions originate from the generation of energy purchased by the gas industry. Scope 3 emissions cover the combustion of gas by end users. See: https://iea.blob.
core.windows.net/assets/4315f4ed-5cb2-4264-b0ee-2054fd34c118/The_Oil_and_Gas_Industry_in_Energy_Transitions.pdf.
44. https://www.woodmac.com/news/opinion/carbon-capture-and-the-future-of-lng-in-asia/
45. https://unece.org/challenge; https://www.ipcc.ch/2021/08/09/ar6-wg1-20210809-pr/
46. https://ec.europa.eu/commission/presscorner/detail/en/statement_21_5766

While coal mining, livestock, rice facilitate financing for assets, Plants unable to meet efficiency – among “transition sector”
fields and landfills are also projects and sectors which support targets may become stranded investments from 2030 to 2035.
sources of methane emissions, climate and sustainability assets, while funding for the This has been criticised as
the gas sector is the primary objectives. They provide a merit technologies and retrofitting work incompatible with the country’s net
source of methane emissions in order for investment screening to modify existing plants could zero by 2050 goal.50
North America, the Middle East, based on national and international otherwise be used for clean
Russia and Central Asia. Driving environmental and socioeconomic energy research and innovation. The first version of the Association
down emissions in these regions standards. They encourage Some estimates have found that of Southeast Asian Nations
will require intervention in the transparency of disclosures, and the large-scale modifications to (ASEAN) Taxonomy for Sustainable
sector, such as cancelling new alignment of investment with allow existing Combined Cycle Finance released in November
plants in the pipeline. science-based targets and DNSH Gas Turbine (CCGT) plants to 2021 avoids labelling gas as a “red
criteria. Green taxonomies also co-fire with hydrogen and meet EU activity” and includes carbon
Gas in the merit order of green provide confidence to public, taxonomy standards may require capture, utilisation, and storage
investment private and institutional investors to months of downtime – further (CCUS) as an “enabling sector.” 51
Despite these investment and allocate trillions in capital in exacerbating the transitional
environmental risks, in some compliance with the Paris supply gap which gas plants are Other countries and financial
48
jurisdictions gas has found a home Agreement targets of a 1.5°C being positioned to resolve. institutions will use these
in the green taxonomies designed pathway and net zero goals. frameworks to set their own merit
to direct sustainable finance China has opted to exclude gas order of sustainable investments.
towards climate and net zero goals. Inclusion of gas generation in and “clean coal” from its green The implications will be significant
A focal point in this debate has taxonomy frameworks is risky and finance rulebook, the Green Bond in the Global South, given gas
been the inclusion of gas short-sighted, reshuffling financial Endorsed Project Catalogue.49 projects in low- and middle-
generation in the European Union’s resources away from other green However, other countries are income countries currently receive
(EU) Taxonomy for Sustainable technologies in the precise time leaving room for gas in their as much as four times more
Activities, approved by the when a boost to renewables sustainable finance frameworks. international public finance than
European Commission in February investments is required to reach South Korea’s K-taxonomy system, wind or solar projects.52 Public
2022.47 The taxonomy, a voluntary net zero targets on time. It finalised in late December 2021, finance flows play a large role in
framework that sends signals to encourages new gas generation in includes LNG and mixed-gas mobilising private investment, and
investors on criteria for climate this decade, which will lock in generation below a generous should be directed with DNSH
and net zero compliance, labels emissions along the full value chain emissions threshold of 340g CO2/ criteria and wider sustainable
gas plants as a transitional of gas, from production to end-use, kWh – more than three times the growth principles in mind. It is
investment until 2030 if specific for decades to come. threshold in Russia’s taxonomy important that governments tighten
emissions intensity targets and
47. https://ec.europa.eu/info/publications/220202-sustainable-finance-taxonomy-complementary-climate-delegated-act_en
proportions of low-carbon gases 48. https://www.transitionzero.org/blog/including-gas-in-eu-taxonomy
are met. 49. https://www.climatechangenews.com/2022/02/02/european-commission-endorses-fossil-gas-transition-fuel-private-investment/
50.https://energytracker.asia/south-korean-green-taxonomy-declared-gas-is-green/
51. https://asean.org/wp-content/uploads/2021/11/ASEAN-Taxonomy.pdf
Green taxonomies are designed to 52. https://www.iisd.org/publications/natural-gas-finance-clean-alternatives-global-south

34 GWEC.NET
their signals on the role of natural

gas in the energy transition, so that
the international financial sector
and developer community can
respond effectively.
Easing gas dependence with

effective market signals
While investor and social
pressures heat up in the gas
industry, policymakers must
support the transition with
effective market signals that can
shift gas demand. The majority of
GHG emissions from the oil and
gas sector is attributed to end-use
sectors like transport, covering
passenger vehicles, aviation and
industry. This means that a
coordinated reduction of demand
for natural gas end-use may also
be needed to curb the sector’s geopolitical clout in a global value like PetroChina, Gazprom and Fuel price volatility can spill over
emissions, such as government chain. Here it is worth noting the Petronas.53 into political instability and social
schemes to fit buildings with concentration of national oil anxiety about welfare and
efficient heating solutions, companies (NOCs) and state- The concentration of state-owned livelihoods, as observed in the
incentivise investment in hydrogen owned entities in gas production. entities adds a geopolitical political and military ramifications of
and biofuel alternatives for the Around 60% of gas reserves and dimension to control of the supply European dependence on imported
transport sector and encourage 50% of global production are under chain, which only grows stronger in Russian gas in the context of Russia’s
behavioural change in travel. the control of state-owned entities times of market instability. It also invasion of Ukraine, as well as recent
worldwide, from national oil means that international disputes or unrest in Kazakhstan, protests over
Otherwise, as gas production ramps companies like Saudi Aramco, strategic controls of supply on the the lifting of fuel subsidies in
down due to depletion or policy Qatar Petroleum, Petrobras and the other side of the world could impact Ecuador in late 2021 and the “yellow
change in some regions (e.g. Nigeria National Petroleum fuel availability at home, driving up vest” protests over fuel taxes in
Southeast Asia), other suppliers will Corporation to international NOCs prices and stoking social discontent. France which began in 2018.
gain an outsize share of the market
and could end up wielding 53. https://www.iea.org/data-and-statistics/charts/shares-of-gas-reserves-gas-production-and-gas-upstream-investment-by-company-type-2018; https://www.iea.org/reports/
significant commercial and the-oil-and-gas-industry-in-energy-transitions

The geopolitical and supply risks the supply of renewable electricity, LCOE nearly halved to reach
in the gas supply chain increases hydrogen and green energy $0.08/kWh.56
as the commodity becomes more carriers. This will require
expensive, making it ever more investment in the technologies and Indeed, this steady reduction in
imperative for countries to avoid infrastructure which can store and costs, accelerated by a global
dependency on natural gas in the deliver renewable energy – less tendency to move towards
course of the energy transition. A than 30% of public and private procurement through competitive
diversified energy mix based in energy investment today targets auctions, has been a major factor
indigenous energy sources like storage and grid management in persuading policy makers that
wind improves energy self- solutions, and this needs to step wind energy can play a central role
sufficiency and security. up.55 Countries which can adapt by in energy decarbonisation efforts,
becoming sources of low- as wind has shown definitively that
Fundamental shifts in commodity emissions energy and fostering it is more cost efficient than fossil
value are already visible in the hubs of clean technology and fuel-based generation in most
transformation of oil and gas innovation, rather than of fuel, will markets around the world.
companies, as they move from fuel be more resilient to the thumps
actors to diversified energy and shocks of the transition. However, there is increasing
investors and suppliers. As evidence that the wind industry
demand for coal, natural gas and Industry sustainability: Higher has become a victim of its own
crude oil ultimately decreases, the costs, perverse markets success. International institutions,
use of electricity, green hydrogen The wind industry has been think tanks and policymakers have
and hydrogen derivatives will rise. highly successful over the last a misguided assumption that
IRENA has predicted that the 2020s decade, showing itself capable of LCOE will continually fall in the
will be the era of a big race for both scaling up production coming years and decades. The
technology leadership, as regional volumes and capacity installations, industry faces increasing
infrastructural hubs of large-scale while dramatically reducing the challenges related to global trade
renewable energy and green LCOE of both onshore and barriers and local content
hydrogen production emerge. 54 offshore wind. According to requirements. Without addressing
IRENA, global weighted-average underlying energy market
A key consideration for countries LCOE for onshore wind declined dynamics, auctions are leading to a
undertaking rapid economic by nearly 60% over the last “race to the bottom” which leaves
growth and industrialisation is the decade to $0.04/kWh by 2020, the wind industry supply chain
competitive advantage attached to while fixed-bottom offshore wind with wafer-thin or negative
54. https://www.irena.org/publications/2022/Jan/Geopolitics-of-the-Energy-Transformation-Hydrogen
55. https://www.strategy-business.com/article/A-rising-tide-of-green-capital
56. Renewable Power Generation Costs in 2020, IRENA, 2021. We note that further information on cost reduction for onshore and offshore wind are provided in GWEC’s Global Wind
Report 2021 and Global Offshore Wind Report 2021, while floating wind LCOE is charted in GWEC’s 2022 report Floating Offshore Wind – A Global Opportunity. See: https://gwec.net/

36 GWEC.NET
margins, while developers and

suppliers are highly vulnerable to
shifts in commodity prices or
financial conditions.
Recent seabed leasing auctions in

the UK and New York saw enormous
bids for fixed and floating offshore
wind development sites. These
totalled $1.1 billion in option fees
for around 8 GW in the UK Offshore
Wind Lease Round 4, $955 million
in option fees for 25 GW in the
ScotWind Leasing round and $4.37
billion for up to 7 GW in the New
York Bight auction. These volumes
of investment reflect the intense
appetite for investment in offshore
wind – but they also take up greater
shares of project CAPEX, leaving
developers more exposed to cost
fluctuations and PPAs at low prices.
The Financial Times described the The introduction of qualitative learning curves, as well as
These dynamics have intensified situation in the global wind industry criteria reflecting social and introducing uncertainty into
the financial pressure on wind in February 2022 as a “perfect economic value in auctions is a project investment. This will be
turbine original equipment storm” of higher costs and logistics step towards recognising the value particularly acute in EMDEs at the
manufacturers (OEMs), component challenges, which have squeezed creation of wind energy, but does early stage of renewables
manufacturers and wind energy wind energy companies margins not itself fix market failures. If left development, where supply chain
producers. Over the last year, and wiped tens of billions off stock unresolved, these pricing infrastructure is often less
these pressures have been prices.57 With auctions becoming dynamics can intervene in the developed and investments can
compounded by a sustained rise more prevalent and competition for medium- and long-term growth carry higher premiums – yet wind
in the cost of key commodities and critical minerals and commodities trajectory of wind energy by developers and investors are
logistics, just as the post-pandemic only set to increase in the clean inflating project costs, reversing under high pressure to deliver the
recovery has squeezed supply energy transition, the current the cost reduction achieved first wave of wind projects at
chains and created bottlenecks “storm” cannot be dismissed as a through technology innovation and extremely low cost.
and fierce competition for raw temporary setback and upward
materials (see Supply Chain). pricing pressure is set to continue. 57. https://www.ft.com/content/29832c31-b3be-43cf-8dab-6970daa57ebb

As a result of narrowing margins ongoing bottleneck in manufacturing 70% of total CAPEX; viewed as a commodities make the wind
for cost recovery in clean energy, capacity and transport logistics such measure of LCOE across a supply chain highly sensitive to
current energy systems are as shipping. This has had a 25-year project lifetime, nearly upstream cost inflation and trade
disincentivising investment in the significant impact on the wind 50% of onshore wind project protection measures. Price spikes
business of wind, when more industry as procurement and freight LCOE is made up of turbine for raw materials, as well as price
resources than ever are needed to for raw materials and commodities costs.58 For offshore wind, turbine fluctuations for the electricity to
power wind expansion and of wind turbines, including steel, capital costs are estimated to power heavy manufacturing
innovation. concrete, copper, nickel and a small contribute 34% of total CAPEX; operations, affect cost recovery
but high-value volume of rare earth viewed as a measure of LCOE and timely delivery for suppliers
Price sensitivity in the wind elements (REE), and their across a 25-year project lifetime, fulfilling contracts for wind
supply chain subsequent manufacturing into wind 23% of offshore wind project turbine components. Changes in
The sudden recovery of industrial turbine components make up the LCOE is made up of turbine costs. electricity and fuel prices,
production following the pandemic lion’s share of wind project CAPEX. commodities and raw materials,
shock of 2020 has led to both fierce These substantial capital freight and logistics can in turn
competition among different For onshore wind, turbine capital expenditures on turbine significantly impact the economic
industries for raw materials and an costs are estimated to contribute procurement of raw materials and feasibility and commissioning
timelines of projects.breakdown
for typical fixed-bottom offshore
Materials breakdown for onshore and offshore wind farms wind farm operating for 25 years,
2020.
Offshore wind farm Onshore wind farm To illustrate the changes in some
key cost inputs over the last two
4% Steel Steel years, steel prices have increased
5% by 50% from the start of 2020 to
Electronic scrap Electronic scrap
24% the end of 2021 (and have seen
GFRP GFRP further dramatic increases since
Copper Copper the invasion of Ukraine), while
221 640
CFRP CFRP copper prices have increased by
t/MW t/MW
Rare earth Rare earth 60%. Prices for neodymium and
Aluminium Aluminium dysprosium, the two key REEs for
direct drive and hybrid drive wind
Lead 72% Lead
90% turbines, have tripled in price
Concrete Concrete over the same period.
Source: BloombergNEF. Note: GFRP = Glass fiber reinforced plastic. CFRP - Carbon fiber reinforced plastic. 58. https://www.nrel.gov/docs/fy22osti/81209.pdf

38 GWEC.NET
CAPEX for typical onshore wind farm, 2020 Component-level LCOE breakdown for typical onshore wind farm operating
for 25 years, 2020
40
Construction Finance 1.5% 34
35
Contingency 6%
Electrical infrastructure 9% 30
Operation and Maintenance
Assembly Rotor 21.4% 25
LCOE ($/MWh)
and installation 2.8% Financial
Financial 7.5%
Site Access 20
Balance of System 1.4
0.3 11.5
and Staging 2.8% Balance of 0.6
2.1
system 22% 15 0.6
3.2 0.4 0.2 1.2
Foundation 5.2%
10
Engineering and Turbine 70.4% 8
Turbine
Management 0.7%
Nacelle 35% 5
Development 1.6% 4.9

0
Tower 14%
Nacelle
Development
Engineering and Management
Foundation
Site Access and Staging
Assembly and installation
Electrical infrastructure
Contingency
Construction Finance
LCOE
Rotor
Tower
Source: 2020 Cost of Wind Energy Review, Tyler Stehly and Patrick Duffy, National Renewable Energy Laboratory, 2021.
Note: The reference project represents a typical 600 MW fixed-bottom offshore wind project comprising 75 wind turbines
at 8.0 MW each, operating for 25 years with no major O&M events.
Where most industries would be commodity price volatility can be Source: 2020 Cost of Wind Energy Review, Tyler Stehly and Patrick Duffy, National Renewable Energy Laboratory, 2021. Note: The reference
project represents a typical 200 MW onshore wind plant in the interior US, comprising 73 wind turbines at 2.8 MW each, operating for 25 years
able to pass on such costs to hedged at a cost, but commodity with no major O&M events.
consumers, turbine prices for hedging does not protect the
projects are negotiated years in industry against the simultaneous
advance of manufacturing and squeeze on logistics. Delivery of risen: By the middle of last year, As a result, turbine prices for future
delivery, meaning that prices are some key components has spot rates for a 40-foot ocean projects are forecast to rise by 9%
already locked in. In the interim, increased from 5 weeks to as much freight container from Asia to the in the second half of 2021,
this leaves OEMs exposed to price as 50 weeks, and these disruptions US reached a record-high 10 times according to the BNEF turbine
volatility and logistics risks out of make turbine manufacturers higher than rates just a few years pricing index. The hike in total
their control. vulnerable to penalties related to ago, particularly as freight contract CAPEX and project lifetime cost
delivery deadlines and delayed rates rose after the Suez Canal calculations will make it even
It is important to note that projects. Freight costs have also crisis in March 2021. more challenging for wind

CAPEX for typical fixed-bottom offshore wind farm, 2020 Component-level LCOE breakdown for typical fixed-bottom offshore wind farm operating
for 25 years, 2020
Insurance During Construction 0.9% 80 77

Construction Finance 3.9%
Operation and Maintenance
Contingency 9.3%
LCOE ($/MWh)
60
Decommissioning 3%
Soft Costs
Turbine 34.7%
Plant 40
Commissioning 0.9%
Balance of System
Lease Price 4.5% Soft Costs 20
17.9%
Turbine 34.7%
Turbine
0
Balance of System
Dvelopment
Substructure and Foundation
Site Access, Staging and Port
Electrical Infrastructure
Assembly and Installation
Lease Price
Insurance During Contraction
Decommissioning Band
Construction Financing
Contingency
Plant Commissioning
Operation
Maintenance
LCOE
Turbine
Engineering Managment
47.5%
Assembly Development 2.3%

and installation 10.4%
Electrical Infrastructure 17.6%

Substructure and Foundation 12.6%
Source: 2020 Cost of Wind Energy Review, Tyler Stehly and Patrick Duffy, National Renewable Energy Laboratory, 2021. Source: 2020 Cost of Wind Energy Review, Tyler Stehly and Patrick Duffy, National Renewable Energy Laboratory, 2021. Note: The reference
Note: The reference project represents a typical 600 MW fixed-bottom offshore wind project comprising 75 wind turbines project represents a typical 600 MW fixed-bottom offshore wind project comprising 75 wind turbines at 8.0 MW each, operating for 25 years
at 8.0 MW each, operating for 25 years with no major O&M events. with no major O&M events.
energy to continue to compete ease as more transport capacity term crunch in commodities caused industry is among these drivers of
for razor-thin margins in tenders comes into the market to meet by the rebound of industrial demand demand, and is also in direct
and procurement schemes demand, and backlogs related to and fulfilment of demand built up competition with other cleantech
around the world. historical incidents like the Suez during the pandemic, or if this will industries, such as the REEs used for
Canal blockage are cleared. be a longer-term super-cycle. It is electric vehicle (EV) motor
One of the key questions for the clear that the long-term effects of the manufacturing.
industry is how long the current However, there is fierce debate energy transition will translate to a
cost crunch will last. On the one among economists and experts as continually expanding need for In the long term, the wind industry
hand, logistics bottlenecks should to whether we are facing a short- particular raw materials. The wind will respond to price shocks by

40 GWEC.NET
optimising supply chains and Rare earth elements demand by sector and breakdown of magnets, 2020
innovating to substitute expensive
materials through alternatives or
recycling solutions (see Supply Catalysts 20% Drivetrain (xEV)
Chain). For now, however, we can
expect turbine prices to continue Polishing 13% Wind turbines
Other consumer
increasing as key commodities electronic Other automotive
and materials become more
valuable. Air-con
Others 9%
Magnets 29% Acoustic transducers
Competitiveness in the new HDD
energy market E-bikes
The increase in turbine prices Metallurgy 9% Electric power steering
means average prices are back to Robotics

levels not seen since 2015, Batteries 8% Phosphors 1%
reversing several years of cost Others
reduction in the supply chain. A

Glass 8% Ceramics 3%
“sandwich effect” has left OEMs
squeezed on costs at either end
of the wind value chain. This Source: Rare Earths Market Outlook Report, Roskill, 2021.
presents a market dilemma, as

the subsequent higher LCOE for
wind energy will make it more global increase in power prices Addressing systemic market renewables, policymakers need to
difficult for wind and renewable due to volatility in gas and coal failures look towards the full system value
energy to rapidly replace fossil supply, which has only continued While the immediate crisis for of competing energy technologies
fuel generation. to spike through Q1 2022 amid wind energy companies has been and design markets that provide
Russia’s military invasion of caused by spikes in the prices of investment signals compatible with
These changing dynamics exist Ukraine. raw materials and logistics vital societal objectives and needs.
against a background of two challenges in the post-pandemic The current pressure on renewable
major trends: first, increased Wind is already extremely recovery period, the underlying energy providers will not be
urgency to phase out fossil fuel competitive on LCOE terms with causes of the industry’s profitability sustainable, and only serves to
generation, including schemes to fossil fuels, and is likely to remain squeeze lies in market design (see demonstrate the deep and
adequately price the cost of so. However, the current crisis has System Design). systemic market failure that is
carbon through regional carbon also shown the need to move preventing us from reaching global
markets, carbon border tax beyond making policy decisions In order to reach net zero and climate and energy system goals.
mechanisms, removal of subsidies and market regulations based achieve a more secure and
and other initiatives; second, a solely on LCOE. resilient energy system based on To illustrate this colossal market

Share performance of fossil fuel companies versus clean energy companies,

December 2020 - January 2022
140
120
100
80
60
Dec Apr Jul Oct Jan

2020 2021 2022
S&P Global Clean Energy Index Bloomberg World Oil & Gas Index
failure, the current situation has recognised, and that investment in

seen sharp increases in electricity the clean energy industry is
prices driven by fossil fuel-related economically viable.
supply issues but shouldered by
consumers. In parallel, there are The energy transition cannot be a
record profits for fossil fuel race to the bottom on prices,
companies, including a revival in otherwise the wind industry cannot
fortunes for “Big Coal”, and a continue to deliver at scale and at
simultaneous squeeze on pace. It is important that the wind
profitability for renewable energy industry continues to deploy circularity, social and community is not providing perverse
companies. Governments must projects on a large scale and to programmes and other areas incentives which will add friction to
urgently intervene if the world is expanding geographies, especially which will enable sustainable the push for net zero. Whether this
going to get on track to reach the in this crucial decade of action. growth. involves higher carbon taxes or
Paris Agreement and net zero The industry also needs the even windfall taxes on fossil fuel
targets, both through short-term margins to maintain well As well as ensuring that sufficient profits, it is essential to address the
fixes which can ease supply developed global supply chains incentives exist for investment in current market failure through
tightness and longer-term market and industrial footprints, make renewables, stronger market robust measures to push carbon
reform. It is essential that the crucial investments in research, signals are needed to discourage generation off the system and
economic and social value of technology and innovation – such investment in further fossil fuel incentivise faster and sustainable
green electrons are adequately as hybrid projects, supply chain generation and ensure that society deployment of renewables.

42 GWEC.NET
PART TWO: SOCIETY
Part Two: Society
Part Two: Society

Public support for renewable energy system. This means can the wind industry shift away Ocean Energy Management
energy has been building, as confronting accepted social and from the traditional orthodoxies of (BOEM) on the approval of the
reflected in public opinion polls, commercial value systems. growth in the legacy energy sector 800 MW Vineyard Wind offshore
international strikes and protests Despite the broader trend of which have eroded public trust or wind project in Massachusetts.2
and institutional support for general public support for – alternatively – won fealty in niche An offshore wind farm near Jeju
campaigns like Race to Zero and renewables, challenges around communities? The industry must Island in South Korea was the
RE100. Meanwhile, the number of social acceptance continue to develop under cohesive and subject of public protests in 2020
climate change-related litigation manifest locally when it comes to inclusive policies which dedicate by haenyeo, or female divers
cases more than doubled from building wind projects. public and private resources to a belonging to a local fishing
2015 to 2021, including 37 people-centred transition. village. 3
“systemic mitigation” cases which With disinformation and recent Otherwise, the industry’s
challenge government inaction on populist movements blurring the expansion may generate enough l Overzealous restrictions which
climate goals around the world1 boundaries of the public interest, a friction to significantly slow down limit the available space for
social consensus around the deployment rates – at a time when wind projects to be built, as in
But as wind energy enters new and energy transition cannot be it is more urgent than ever to the case of the now-relaxed
diverse geographic domains and guaranteed. The energy transition accelerate. 1-kilometre minimum distance
continues to penetrate mature may be perceived to have a setback rule proposed by the
markets, and as its constituents regressive impact on some This friction has already federal German government.4
grow to become the next green communities, reflected in labour manifested around the world into The relaxation allowed states to
supermajors, the industry will displacement in sunset industries delays for project development set their own rules up to a
undoubtedly disrupt the global to shifting consumer demand, as and construction, commonly maximum of 1-kilometre,
businesses chase localities which initiated by: although Bavaria maintained a
can supply them with renewable “10-H,” or 10 times height, rule
energy. These short-term setbacks l Challenges or lawsuits by which mandates that projects
could foment resistance and interest groups which fear with a 200m tip height are
dangerous resentment of the disruption and discord with the located at least 2 kilometres away
“winners” of the transition. wind industry, as in the recent from dwellings. This is fairly
case of a US fishing group filing a extreme, given the setback rules
Wind energy must be a legal challenge to the US Interior are around 500 metres in Spain
custodian of the energy Department and Bureau of and France.
transition, and not merely one of
the winners. As wind energy 1. https://www.lse.ac.uk/granthaminstitute/publication/global-trends-in-climate-litigation-2021-snapshot/
expands and green supermajors 2. https://renews.biz/75330/roda-to-sue-us-government-over-vineyard-approval/
3. http://koreabizwire.com/jeju-haenyeos-call-for-cancellation-of-offshore-wind-power-project/170413
become global powerhouses, how 4. https://windeurope.org/newsroom/news/german-government-drops-the-idea-of-a-nationwide-1000m-distance-rule/

44 GWEC.NET
Part Two: Society
l Environmental challenges on town or county level since 2015.6 reached and before construction Highlighting and equitably
the grounds of biodiversity can begin. As outlined below, these distributing the net-positive
protection. A robust, inclusive l Land acquisition conflict owing procedures are too often overly value creation that renewable
and sensitive siting process to multiple shareholder models, bureaucratic and inefficient, energy brings can improve
combined with thorough outdated and un-digitised land managed by under-resourced social cohesion around the
Environmental Impact registries or protracted approval bodies. In some cases, energy transition. IRENA analysis
Assessments (EIA), which are negotiations on compensation.7 permitting and government legal shows that enacting a
required to develop any onshore For instance, leasing revenue aid favours the actions of small, 1.5°C-compliant development
and offshore wind project, will land for wind project unrepresentative groups that pathway results in a loss of 14
indeed address most concerns. construction in India is incredibly object to wind farm projects, even million jobs related to fossil fuels,
However, the industry’s complicated, requiring when these projects enjoy strong but a gain of 40 million jobs from
expansion into new geographic clearances from numerous public support among the community as transition-related investments such
areas has raised the need for entities including the state a whole. as large-scale wind and renewable
further studies. For instance, $2.5 revenue department and local energy deployment, grid
million in long-term and panchayats. Private land Delays arising from complex enhancement and energy
continuous bird surveys have purchases are often slow due to regulatory procedures or interest efficiency.9 These jobs are spread
been commissioned for the 640 high costs and several smaller groups which represent a minority across different disciplines,
MW Yunlin offshore wind farm parcels owned by multiple interest pose impediments for including marketing and
under development in Taiwan.5 entities; lack of digitisation and government, civil society and administrative personnel,
inconsistent record-keeping has industry to work together engineers, professional experts,
l NIMBY-based (Not In My also resulted in multiple effectively to meet common labourers and technicians. Overall
Backyard) challenges by local claimants for the same parcel.8 climate goals. When social discord human welfare, according to an
communities which oppose resulting from industry expansion index of social, environmental,
wind projects for visual purposes A common barrier is extremely is left unaddressed, the economic, distributional and
or anxiety about turbine noise or complex permitting schemes, consequences can be long-lasting. access dimensions, increases by
declines in property values. One which straddle the social and Anxiety and disagreement with 11% by 2050 and global GDP is
individual tracking purported regulatory domain. Obtaining the community developments can lead boosted by 1.2%, compared to a
community opposition of wind right licenses and consents for a to political change, which can in scenario of current energy
projects has found that more than wind project to proceed is turn lead to policy U-turns and policies. Further public benefits
320 wind projects in the US have necessary before a financial variability. extend from water consumption
been the subject of opposition at investment decision (FID) is savings to compatible co-location
5. https://www.4coffshore.com/news/yunlin-bird-survey-collaboration-between-germany2c-japan2c-and-taiwan-nid17553.html
6. It should be noted that this individual has written articles in opposition to the expansion of wind energy, especially in rural areas; while not a neutral source and not independently vetted, the collection of incidences is nonetheless telling: https://
robertbryce.com/renewable-rejection-database/.
7. The Politics of Renewable Energy in East Africa, Oxford Institute for Energy Studies, 2018.
8. https://shaktifoundation.in/wp-content/uploads/2018/01/Study-Report-Addressing-Land-Issues-for-Utility-Scale-Renewable-Energy-Deployment-in-India.pdf; Kumar, A., Pal, D., Kar, S.K. et al. An overview of wind energy development and policy
initiatives in India. Clean Techn Environ Policy (2022).
9. World Energy Transitions Outlook: 1.5°C Pathway, IRENA, 2021.

Part Two: Society
Dimensions of social acceptance of wind energy fostered by institutions applying public strategy on environmental
ESG criteria to wind project protection and biodiversity must
investments. According to the UN therefore recognise the need to
Principles for Responsible accelerate renewable energy
Investment, the ‘S’ pillar of ESG is a deployment to displace fossil fuels.
Socio-political Market Acceptance challenge to assess as “social
Acceptance Acceptance of issues are less tangible, with less Further research and technical
Acceptance of Social
renewable energy as Acceptance
renewable energy mature data to show how they can studies can yield information to
of Renewable technology by investors, impact a company’s performance. help redesign project structures or
a viable energy source Energy financial institutions and But issues such as human rights, layout to mitigate adverse
and supported in
consumers of energy
government policy and labour standards and gender environmental impacts. Where
by the general public equality—and the risks and impacts cannot be avoided or
opportunities they present to meaningfully mitigated, the
Community Acceptance
Acceptance of specific investors—are starting to gain industry has also provided
renewable energy prominence.”11 As more qualitative compensation measures to restore
project developments and quantitative criteria are or replace nature, such as peatland
by host communities outlined for social performance, restoration around wind farms in
wind project developers can Scotland. Some wind projects go
Credit: Wüstenhagen, R., Wolsink, M. and Bürer, M. J., ‘Social acceptance of renewable energy innovation: An introduction to the concept’,
Energy Policy, Vol. 35, No 5, 2007, pp. 2683-2691; REN21, Renewables 2020: Global Status Report, 2020.
strengthen their practices beyond maintenance to generate
accordingly. “nature-positive” outcomes, such
as offshore wind farms in the North
models with the farming industry.10 would be relevant for the wind While wind power is seen as a Sea which provide artificial reef
industry to implement as it grows. climate change solution, it must habitats and restore degraded flat
The public and private sector must also consistently be seen as a oyster beds to a healthier
work together to provide Social and environmental value win-win for nature preservation condition.12
meaningful change as the wind must become synonymous with in order to foster community,
industry expands. Steering the wind power, whether captured by socio-political and market Early, effective and sensitive siting
transfer of benefits to communities workforce transition schemes that acceptance. Renewable energy and spatial impact assessments,
is a critical component of a fair and identify alternative sustainable and the protection of nature are which account for biodiversity
just energy transition. The concept employment opportunities in clean both inherently necessary for protection needs and natural areas
of a social license to operate (SLO) energy for workers in sunset sustainable growthand harmonious which may already function as
which emerged primarily from the industries, or participatory co-existence of society and the natural carbon storage, are crucial
mining industry, wherein energy dialogues with civil society during natural world. A comprehensive for ensuring that project design
projects need to foster long-term project development.
10. See: http://socialacceptance.ch/.
relationships with host 11. https://corpgov.law.harvard.edu/2020/06/28/time-to-rethink-the-s-in-esg/
communities and be sensitive and Social responsibility and 12. Bennun, L., van Bochove, J., Ng, C., Fletcher, C., Wilson, D., Phair, N., Carbone, G., (2021). Mitigating biodiversity impacts
associated with solar and wind energy development. Synthesis and key messages. Gland, Switzerland: IUCN and
responsive to ongoing issues, responsiveness are increasingly Cambridge, UK: The Biodiversity Consultancy.

46 GWEC.NET
Part Two: Society
and implementation does not decisions made in this decade will distribute burdens and benefits.
come into conflict with NGOs and set the course for this century. But taking several years to
other stakeholders down the road. complete, they are weakening
This process needs to be For the wind industry, this means national energy transitions all over
participatory, inclusive of industry, getting on-track for a massive the world.
relevant government agencies, increase in installations and
conservation NGOs and local civil industrial capacity exceeding Permitting lead times – which
society. 8,000 GW of wind energy by 2050 cover spatial planning,
– around 10-fold the existing environmental and social impact
Without localised social capacity today.13 At the same time, assessment, planning
consensus on the pace and scale the wind sector is committed to authorisation, grid connection and
of wind energy expansion, the grow in alignment with sustainable legal challenges – are slowing
industry will continue to face development, circular economy, down wind energy deployment in
protracted battles with harmonious co-existence with host countries at various stages of the
communities and bureaucracy communities and local energy transition. Without
on the ground, and we will miss stakeholders and adherence to streamlining the procedures to
our Paris targets. While high environmental and social grant permits, including land
policymakers and scientists have standards. allocation and grid connection,
convened around the need to there will be a surplus of projects
deploy renewable energy at speed But current policy and market “stuck in the pipeline” and we will
on a global scale, an enabling frameworks are creating a miss our climate targets.
social and regulatory environment widening gap between ambition
is crucial to delivering a and reality. Too many countries are Labour- and resource-intensive
sustainable pipeline of projects. unable to leverage the enormous permitting processes increase
interest from investors to deploy transaction costs and development
For a green future, wind energy projects due to overly risks for wind projects, and
cut the red tape complex and bureaucratic undermine the investment case.
The window to act for a 1.5°C permitting schemes. These The number of jurisdictions
pathway has been called “narrow schemes are critical – they are involved in a utility-scale wind
but achievable,” “tough but designed to understand, assess project, from ministries of finance
possible,” “ambitious but within and mitigate impacts of wind to transport, is large; without a
reach,” and other phrases which projects to local environments and centralised system or authority, the
reflect the same truth: The communities, as well as equitably process of navigating approval
procedures among multiple
institutions is formidable. These
13. World Energy Transitions Outlook: 1.5°C Pathway, IRENA, 2021; Net Zero by 2050: A Roadmap for the Global Energy delays mean deferred
Sector, IEA, 2021.
opportunities to realise capital

Part Two: Society
Wind energy faces permitting barriers around the world
UK: Onshore wind must meet strict planning

requirements, with under-resourced local
US: Offshore wind projects generally authorities and a lack of guidance on
require at least 6 years for permitting. It demonstrating community support for a
took almost eight years to obtain permits for project. Between 2016 and 2020, only 16
the two-turbine 12 MW Coastal Virginia turbines in 7 locations received planning
offshore wind pilot project. permission.
Japan: Up to 8 years to complete the

complex EIA process for onshore and
offshore wind projects.
Vietnam: A complex permitting environment

requiring nearly 20 approvals from dozens
of different authorities at national, provincial
and local levels.
Indonesia: Permitting is slow and uncertain,

with numerous government agencies
Mexico: Permitting for renewable energy involved and some permits discretionary in
projects can take more than three years, nature. Land ownership evidence is hard to
due to local opposition and slow approvals obtain and can be disputed with traditional
from conservation authorities. tenants, while there is no guaranteed
timeline for land certification.
India: Land acquisition for wind projects

takes 6 to 24 months. Some states such as
Spain, Italy, Greece, Sweden, Belgium and Kenya: Acquiring land is laborious and has Rajasthan lack a streamlined dispute
Croatia: Permitting can take more than 8 led to legal challenges for wind projects in resolution process, resulting in extended
years for onshore wind, including the time Lamu County, partly due to an under-re- delays for wind projects.
taken by any legal challenges. sourced National Lands Commission. Wind
projects often face local opposition and
disagreement regarding compensation or
resettlement.
Source: GWEC Market Intelligence.

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Part Two: Society
investment in communities, job implement the Energy Virtual at the country level. extensive inventory of reviews and
opportunities and growth. One-Stop Shop (EVOSS), an online authorisations. At the federal level,
platform to coordinate data and While Europe is generally viewed these include reviews or approvals
Elongated timeframes also lead to information for energy project as a climate leader, many under the Business Resource
projects reaching the construction applications. The task group was countries in the region Lease, Clean Water Act, Bald and
stage with outdated technology in directed to work with the Anti-Red demonstrate how administrative Golden Eagle Protection Act,
their plans, including wind turbine Tape Authority government office, procedures can become Military Mission Impact Process,
models which may no longer be and report annually to the Office of significant bottlenecks to the Endangered Species Act, Fish and
manufactured at optimal scale or the President. phaseout of fossil fuels. For Wildlife Coordination Act,
cost-efficiency. Developers may instance, onshore wind Floodplain Assessment, Native
need to modify the wind project The European Commission construction permits in Italy take American Graves Protection and
design or layout by the time launched a public consultation on five years on average, rather than Repatriation Act and more.17
approvals are granted, triggering a renewables permitting in January the six months required by law. Federal agencies take an average
permit extension and further 2022, with the aim of accelerating These delays have dragged of 4.5 years to complete
delays. As noted by the Australian progress towards the 40% deployment rates down to roughly environmental impact statements
Energy Infrastructure renewable energy target by 2030. 200 MW per year – a far cry from under the National Environmental
Commissioner, it is therefore This consultation will include an the levels needed to deliver Italy’s Policy Act alone. 18
“feasible that a period spanning 20 examination of the rules around 70 GW renewable energy capacity
years or more can occur between spatial planning, viability of target by 2030.16 The impact on Transmission projects which
the original prospecting at the “one-stop shop” models, investment is brutally clear: Italy’s would widen renewable energy
wind farm site, permitting intervening bodies for extensive recent renewable energy tender supply are also burdened by slow
approvals and the wind farm being legal challenges, as well as human went undersubscribed, awarding bureaucratic procedures. The
constructed.”14 and digital resource requirements only 975 MW of utility-scale $2.5 billion Clean Line Energy
for permitting bodies. The 2018 projects out of a total 3,300 MW on project which would have
This bottleneck has already EU-wide Renewable Energy offer. transferred wind energy from
garnered wide attention and Directive already introduced Oklahoma to the southeast of the
prompted government action. In guidelines for permitting including The US goal for carbon-free US received a green light from the
China, largely due to strong central single contact points and electricity by 2035 is also Department of Energy in 2015,
steering, regulated timelines for maximum durations for the project threatened by permitting but was stymied by legal
permitting and consents (12-24 approval process.15 But this has not challenges, where wind projects challenges and community
months for onshore wind and yet been successfully implemented are required to undergo an opposition until a crucial
24-36 months for offshore wind)
are generally followed, and the 14. https://www.aeic.gov.au/observations-and-recommendations/chapter-4-planning-permits
15. https://ec.europa.eu/info/sites/default/files/amendment-renewable-energy-directive-2030-climate-target-with-annexes_en.pdf
attrition rate for wind projects is 16. GWEC Market Intelligence reflects 192 MW of onshore wind installed in Italy in 2020 and 201 MW in 2021. Additional information: https://www.xm.com/research/markets/allNews/
low. In the Philippines, an executive reuters/italy-promises-quotbrutalquot-cuts-to-red-tape-delaying-renewable-energy-projects-42462524.
17. https://www.permits.performance.gov/sites/permits.dot.gov/files/2020-03/Environmental%20Review%20and%20Authorization%20Inventory%20%281.17.20%20Update%29.pdf
order in 2021 prompted the 18. Average of 4 years for Department of Energy and 2 years for the Bureau of Ocean Energy Management, measured over the period 2010-2018. See: https://ceq.doe.gov/docs/
creation of a task group to nepa-practice/CEQ_EIS_Timeline_Report_2020-6-12.pdf.

Part Two: Society
Case study: Making wind energy growth a political priority in Germany

In recent years, the expansion rate of The new Federal Minister for
wind energy in Germany has Economic Affairs and Climate Action Wind energy installations in Germany (GW)
severely declined. After a historic announced two major policy
low in 2019, numbers are increasing packages in January 2022: 20
slowly, but far stronger expansion Onshore Offshore Necessary annual expansion
l The reform of the Renewable to reach goal of 80% renewable
rates are crucial to meet Germany’s
Energy Sources Act will be at the 15
electricity by 2030
climate goals.
core of the first package, which
Tackling climate change and also includes proposals for reform
10
accelerating wind energy of citizen energy projects,
deployment are now becoming regulations regarding pilot project
priorities of Germany’s new coalition facilities and community profit- 5
government. In 2021, after 16 years sharing schemes with wind
of Angela Merkel’s chancellorship, a projects. A cabinet decision on this
0
new government led by Social set of legislation is expected in
2010
2011
2012
20103
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Democrat Olaf Scholz came into April 2022.
office.
l The second package, to be
The coalition agreement between presented in mid-2022, will
the Social Democratic Party, the address some of the core issues wind energy sites is also a major renewables, is the optimal remedy
Greens and the Liberal Democratic that have constrained expansion of focal area to reach the 2% allocation to the current power pricing crisis
Party emphasises the need for a wind energy in Germany: reform goal and improve the energy yield of and to achieve Germany’s climate
rapid and massive expansion of of the highly bureaucratic already existing farms. goals.
renewables and commits to a 1.5°C permitting process for wind
Taken altogether, these measures With input from: Bundesverband
pathway for climate neutrality by projects, as well as a mandatory
should streamline the permitting WindEnergie e.V. (BWE)
2045. To reach this goal, 80% of the allocation of 2% of each federal
process, which currently takes six Note: While this case study was written in early 2022, energy
power mix must come from state for wind farms. Reforms in
years for onshore wind, and lead to policy in Germany continues to evolve following European
renewable sources by 2030 – this the field of environmental efforts to reduce reliance on Russian natural gas after Russia’s
significant reduction of costs. invasion of Ukraine in February 2022.
would require annual installations of protection and biodiversity
However, these measures are not
more than 10 GW of wind energy conservation are expected to
likely to take effect until at least
from 2026 onward. Therefore, the pre-emptively address challenges
2023 and require strong federal-
coalition intends to reform the around conservation and the
state alignment. Once in place, the
Climate Change Act and initiate all urgency of the energy transition.
growing share of wind and
necessary policy reforms within the
Simplifying and speeding up the renewable energy, combined with a
first half of 2022.
repowering prospects for existing market framework that works for

50 GWEC.NET
Part Two: Society
interconnection agreement of energy productivity from these can bring modifications in which prioritises DNSH, green
expired in 2018.19 sites with newer and more efficient physical structure and farm economy and nature-positive
technologies. In aggregation, this design. Simplified permitting initiatives, and even identifies
Finally, permitting for repowering greater yield can help to enhance should also include expansion of areas suitable for wind projects
of older wind projects should be wind generation profiles in the grid connections to integrate where planning could be
accelerated. Repowering offers an wider energy system, increasing the larger turbines with higher fast-tracked.
efficient pathway for more mature installed capacity base and power ratings.
wind markets to maximise contributing to grid balancing and l Active dialogue between
productivity and socioeconomic improved system stability. l Digitised, searchable and communities and industry
benefits from sites already up-to-date databases for land throughout the lifecycle of a wind
permitted for wind power Streamlined and sensible registrations and siting of project, particularly in
production. Around 4,700 wind permitting schemes for renewable energy projects, developing economies where
turbines in Europe could be renewable energy projects are including an inventory of local energy justice and energy
decommissioned by 2023, and needed to accelerate ordinances and records of where sovereignty are emerging
nearly one-quarter of the onshore deployment and minimise energy projects have met narratives.
wind in North America will reach project attrition. The following community resistance, which can
end of lifetime by 2030 – these measures should be considered, support local authorities with l Where local opposition and
turbines could be replaced with among others: zoning for projects. NIMBYism is particularly
fewer and larger models in challenging, policymakers can
accordance with the most l Mandated maximum lead times l Dedicated centralised consider encouraging
advanced technology, unlocking to permit wind energy plants, authorities and single focal community benefit schemes
increased energy yield and cost such as 2 years for greenfield points who can work with attached to renewables projects
reduction for offtakers, consumers onshore wind projects, 3 years renewable project developers to to improve public support.
and asset owners and operators.20 for offshore wind projects and 1 streamline the siting and
year for repowering projects, permitting process. l A clearing house mechanism
The benefits of repowering go with additional discretionary time for legal disputes to prevent
beyond extending the operating allowance under extraordinary l More staff and digital resources extended delays to critical
lifetimes of wind projects. The first circumstances. for the various authorities which infrastructure projects, and a
generation of projects developed in make decisions during the structured and time-limited
countries often benefit from l Repowering should be enabled permitting process of a wind process for developers to
allocation of sites with best-class via regulatory fast tracks which project. provide evidence.
wind resource. Repowering with full allow streamlined permits and
or partially upgraded turbine EIA procedures and extensions l Transparent land and ocean The energy transition calls for
system components allows the for site licensing and use, as use guidance, aligned at system-wide transformation,
project to obtain the maximum value upgraded turbine technology national and sub-national level, powered by renewable energy.
Policymakers must ensure that
19. https://talkbusiness.net/2018/01/controversial-2-5-billion-clean-line-project-stalled-will-evaluate-options-officials-say/
20. https://windeurope.org/wp-content/uploads/files/about-wind/reports/WindEurope-Accelerating-wind-turbine-blade-circularity.pdf; GWEC Market Intelligence. regulation is set up to enable a

Part Two: Society
Case Study: Permitting – the make-or-break of Europe’s decarbonisation ambitions

The EU wants to be climate neutral built only 11 GW in 2021 and is set to simplifying procedures. The full
by 2050. Renewables-based build 18 GW a year over the next five results of the project are expected by
electrification across the economy years. Permitting delays lead to the end of 2022.
will be key to this ambition. uncertainty over project pipelines
So far the preliminary conclusions
Electricity covers only 24% of and undermine the health of the
show a fragmented picture for wind
Europe’s energy demand today. But European wind supply chain.
energy deployment. 75% of total
the EU decarbonisation scenarios
2022 will mark a make-or-break wind installations happened in only
foresee it is set to cover directly 57%
moment with regards to permitting in six markets in the past 10 years.
of final energy uses and 18%
the EU. The EU Member States Buildout has been particularly weak
indirectly through renewable
should have already implemented for onshore wind. And administrative
hydrogen. Wind will play the biggest
shorter permitting procedures as and grid barriers presented more
role in providing clean and
mandated by the EU Renewable than half of all barriers linked to
competitive power: it is set to
Energy Directive. EU law says new permitting for wind installations.
generate 50% of Europe’s electricity practice and common sense rules on
renewable energy installations
by 2050. In the meantime the European wind spatial planning such as minimum
should be permitted within 2 years
industry is making its distance to housing, tip/hub height
This all means that the EU is now and repowered ones within 1 year.
recommendations for improving the restrictions, exclusion zones around
calling for 1,000 GW onshore and The majority of Member States fall
permitting situation in Europe. These military/aviation radars. This will
300 GW offshore wind in 2050, up behind these deadlines. So the
include the clarification of allow Europe not to lock itself down
from 173 GW and 16 GW today European Commission is set to
responsibilities in the permit in old wind turbine technology and
respectively. This is doable: the present a new Permitting Guidance
granting process between the many will give a boost to repowering in
technology and finance are available, in summer 2022 to support Member
administrative authorities involved at major wind markets such as
and costs have come down. States with best practice in
national, regional, local level, with Germany, Spain, Italy. And Europe
simplifying permitting.
But the key challenge is permitting. clear decision deadlines to oversee. needs to develop rules on the
Permitting procedures across the EU To address the permitting situation, It’s also about EU countries simplified permitting and grid
are long and cumbersome. Europe is the EU has launched the RES- establishing a single contact point to connection for co-located renewable
not permitting enough new wind Simplify project to which the expedite the process. Permitting energy projects (e.g. wind/solar/
farms to meet the huge demand in European wind industry is authorities also need to ramp up storage) and offshore hybrid power
renewables, nor is it permitting them partnering up. The project looks at human and/or digital resources to plants.
fast enough. The EU-27 is building permitting barriers for all renewable handle the increasing number of
With input from: WindEurope
only half the wind volumes it needs energy sources in all EU Member renewable permits and here the EU
to reach climate neutrality. It needs States. It aims to provide an overview Recovery Plan could support
32 GW of new wind capacity each of permitting bottlenecks and to Member States with funding.
year until 2030 already. The region make recommendations for
EU countries could also apply best

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renewables-based system, and overhauling our entire energy energy policy environment. incident, which became known as
that bureaucracy and red tape are system will require hard choices in “Climategate,” falsely purported to
not obstructions to achieving our many cases. That being said, we For this reason, GWEC considers show a conspiracy by scientists to
climate goals. cannot afford for disinformation to hostile disinformation as a growing distort evidence and mislead the
disrupt decision-making processes and perhaps critical threat to the public to exaggerate certainty
Disinformation: A growing threat or mislead dialogues around the energy transition. around the human-made nature of
to a just energy transition relative cost and benefits,
Enduring political will among discrediting viable solutions and From climate disinformation to What is disinformation?
governments and policymakers is creating false polarisations and solution disinformation
Disinformation is the intentional and
required to push forward zero-sum choices. The history of climate change
organised diffusion of false information. It is
consistent and sustained policies denial has been well
often created and spread by extreme and
and enable a shift to renewables- In recent years, governments have documented. Since the early to
ideologically driven groups, such as groups
based energy systems. This struggled to deal with a political mid-1970s, increasing consensus
working to defend a particular economic
long-term political will must be animus that is both populist and around the basic tenets of climate
interest from which they directly benefit, and
based upon a wide-ranging social sceptical – much of it fuelled by change and, in particular, the
by bad actor governments and
consensus around the actions disinformation. Some policymakers causal link between human
bureaucracies which see a strategic
necessary to decarbonise and have struggled to win over public activity and climate change was
advantage in disrupting change.
carry out the energy transition. opinion on previously met by systematic attempts to
uncontroversial scientific question and throw doubt upon Disinformation can take a relatively small scale
In short, while we cannot expect arguments, while others have been climate science, much of this and spontaneous form, such as false claims
public opinion and political debate swayed by populist campaigns funded by incumbent fossil fuel repeated in an email chain or a single social
to be without fluctuations, society due to expectations of short-term interests. media page. It can also take the form of
will require a shared political benefit. These large-scale “lie machines”: well-funded
understanding based on rational opportunistic stances often have In the internet age, a key moment operations that involve the systematic creation,
decisions around social priorities little political cost to politicians – was the release of hacked distribution and marketing of false information.
and their implications for the but they can lead to serious correspondence between climate Lie Machines, Phillip N. Howard, 2020.
energy sector. Radically hiatuses and disruptions to the scientists in November 2009. The
Stages of Disinformation
Spread of
Disinformation
through echo Rumors Discredit Incite
Mainstream Media
chambers +
1 2 3 4 5 6
Echo
Vested interest in chamber Introduction of Social Media
creating disinformation fake evidence Influencers Social / Word of mouth /
local press
Results of
disinformation

Part Two: Society
exonerated and no evidence of powered by renewable energy, change denial blog posts from the
data manipulation or misleading with consistency across age, UK into a machine-learning
the public; the only wrongdoing education level and stated political programme. We found that science
established was the theft of emails ideology.22 A YouGov poll in denialism misinformation is
itself, purportedly carried out by a Indonesia, Pakistan, the gradually going down – and
hacker based in Russia. However, Philippines, South Africa, Turkey solution misinformation [targeting
the affair caused significant and Vietnam in 2019, found that climate policy and renewable
damage by undermining trust and the majority of citizens felt their energy] is on the rise.”25
focus at the crucial Copenhagen country should invest in renewable
COP15 summit, where the story energy to support long-term Given the increased sophistication
was cited by delegates of countries development.23 and capacity of “lie machines” to
actively opposing proposed spread disinformation through
agreements. The summit ended in Accompanying this has been much social media and messaging
failure in December 2009. stronger political consensus, which platforms, and an increasing
reached a key moment with the propensity in some countries to
Despite incidents such as this, signing of the Paris Agreement by accept irrational and misleading
consensus around climate change 196 Parties, accounting for 98% of ideas in opposition to established
and the need to urgently act on anthropogenic emissions in 2015. science, these “solution denial”
climate change.21 Fragments of mitigation has grown steadily since narratives have a significant
thousands of hacked emails stolen 2009 – backed by increasingly This has also led to a decline in capacity to disrupt and delay
from a UK academic server were clear, comprehensive and disinformation campaigns around climate action and the energy
selectively pieced together to form a undeniable scientific research. “classic” climate denialism and a transition.
narrative that suggested climate shift in narratives towards
change was an elaborate hoax. Large-scale public opinion polling discrediting climate solutions such Identifying the narratives
These email extracts were then on a global scale shows increasing as wind power. A recent paper Fundamentally, solution denial
released and distributed in a highly concern and prioritisation of reflects a study of machine- works in two main areas: arguing
organised fashion, with the storyline climate change across all learning to identify growing that policies aimed at addressing
being reported enthusiastically by geographies, with public disinformation narratives, and climate change do not work or
sympathetic media around the understanding and urgency demonstrates this decisive shift make the situation worse; and
world, led by outlets in Rupert particularly strong among younger from “climate denial to solution arguing that key decarbonisation
Murdoch’s media empire such as people. A 2017 survey by Ørsted denial.”24 One of the academics has technologies (wind or solar energy,
Fox News and the Wall Street Journal. and Edelman Intelligence, which noted, “We fed 21 years of climate for instance) do not work.
covered 26,000 people in 13
21. The New Climate War, Michael E. Mann, 2021.
Following two years of extensive countries in North America, 22. https://www.vox.com/energy-and-environment/2017/11/20/16678350/global-support-clean-energy
investigations in the US and UK, the Europe and Asia, found that more 23. https://www.e3g.org/news/polling-citizens-six-belt-and-road-countries-want-clean-energy-not-coal/
24.Computer-assisted detection and classification of misinformation about climate change, Coan, Boussalis, Cook and
“revelations” turned out to be than four-fifths of people believe it Nanko, 2021.
entirely baseless, with the scientists is important to create a world fully 25. We found that science denialism misinformation is gradually going down – and solution misinformation

54 GWEC.NET
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In the latter area, and particularly exaggerated or false

regarding narratives discrediting environmental impacts of wind Texas Disinformation Trail in 2021
wind energy, there is widespread turbines, which seek to engage
15 February
organised disinformation based on people who would generally be
false, antiquated or unsubstantiated supportive of decarbonisation
data. Common arguments include initiatives. These are centred
claims that: wind turbines do not around a series of claims
work or are inefficient; wind regarding wind turbines: having a
turbines use more energy than negative effect on biodiversity, both
they produce; wind energy is more onshore and offshore (a key claim AM, 15 February
expensive than fossil fuel; wind of anti-wind advocates in the Disinformation first appears
Luke Legate’s tweet first links a photo of a PM, 15 February
energy capacity needs an recent French election campaigns);
Swedish turbine from 2014, with Fox Business Disinformation echoed
equivalent amount of fossil energy wind turbines being a major soon sharing similar messages to a wider to new audiences
as “backup” thereby involving source of bird deaths; using large audience The message is spread to diverse audiences by
large “hidden costs”; and so on. amounts of fossil fuels to keep other voices, on the fringes and in the
These can be rebutted using spinning; creating more emissions mainstream
widely available LCOE numbers, in the supply chain than they 16 February
market data which reflects the remove from energy systems; AM
impact of wind energy on power creating large amounts of waste;
prices and analyses of the impact and creating massive
of wind energy production on environmental damage due to AM, 16 February
power systems. However, the wide mining of minerals used in wind Disinformation reaches
availability of such information has turbines. thought leaders
Mainstream thought leaders carry the message
so far not curtailed such arguments into the centre of the news agenda
from circulating. These arguments are often AM, 16 February
presented without context and Disinformation reaches
Significantly, in a trait common to without comparative analysis elected officials
A nationally elected Senator shares the
much disinformation, the concerns against other energy technologies. original tweet, while a local official
around cost often intersect with They are aimed at confusing declares ‘green energy’ is ‘killing people’
conspiracy-type theories based on stakeholders – some of whom can 16 February
the idea that renewable energy is a be mobilised against wind energy, PM
PM, 16 February “Our wind and our solar, they got shut
“scam” aimed at enriching an elite slowing the deployment of wind by Disinformation emerges down and they were collectively more than
group, rather than a genuine creating public opposition to new as blame by Texas Governor 10% of our power grid, and that thrust
response to the climate emergency. projects – and creating Texas Governor Greg Abott names wind Texas into a situation where it was lacking
justifications for vested interests energy as a key issue, despite having named power in a statewide basis”
More sophisticated campaigns that feel threatened by wind oil and gas in a previous tweet Texas Governor Greg Abott
have emerged around the energy.

Part Two: Society
Providing stakeholders and the understanding its spread and

public with facts and education emerging false narratives.
about wind energy is, of course,
important to rebutting l Identify
the bad actors that are
disinformation. But the fundamental creating and maintaining lie
risk is that these narratives are machines and exposing these to
based on organised and deliberate public scrutiny, thus allowing
falsifications or distortions of facts. people to understand attempts at
manipulation and make rational
In order to defend against and choices.
disarm the pernicious spread of
disinformation, there are a l Engage with platforms to ensure
number of actions which that false content is identified,
governments, communities and flagged and removed.
industry can undertake. On a
general level, it is more important l Educate through media literacy
than ever that political leaders campaigns so that the public is
behave responsibly, act according prepared to recognise false
to a shared understanding of information, scrutinise sources
scientific evidence and avoid and check against facts.
embracing forms of populist
discourse based on irrational Over the coming months, GWEC
distrust and suspicion. This will be working with a number of
means taking a principled partners to create a systematic
position based on the long-term framework that maps
societal challenges and disinformation in the wind industry.
opportunities of the energy The purpose is to understand how
transition in the face of short-term disinformation is being created
challenges. and distributed, so that the
industry can respond to it more
There are also a number of effectively.
practical steps that can be taken
by both public and private actors:
l Monitorthe creation, distribution

and marketing of false
information, mapping and

56 GWEC.NET
PART THREE: SUPPLY CHAIN
Part Three: Supply Chain

The global wind turbine supply maintenance (O&M) and other Asia-Pacific (APAC) region, mainly one-third rise in global weighted-
chain is diverse and includes the services. Manufacturers have China and India. The top three average capacity factors for
participation of full turbine OEMs sought to strike the most western turbine OEMs – Vestas, onshore wind to 36% in 2020, and
and key component suppliers for sustainable and competitive Siemens Gamesa Renewable driven down wind LCOE across
nacelles, blades, generators and balance between vertical Energy and GE Renewable Energy the world.
converters, gearboxes, bearings integration of component supply – are fairly globalised with local
and control equipment. The supply and full component outsourcing to partners. China is the primary In the offshore wind supply chain,
chain is further divided into fit their turbine designs.1 base for wind turbine components rotor diameters have increased by
sub-contracting for engineering manufacturing and also a global nearly 50% to 163 metres by 2020,
and construction, providers of raw GWEC Market Intelligence shows export hub for generators, blades while turbine sizes have ballooned
materials and heavy machinery, that out of 35 global wind turbine and gearboxes. Europe is the by 138% to an average 8 MW over
assembly, operations and suppliers, 23 are based in the second-largest provider of the last decade. These have
generators and blades globally, similarly allowed offshore wind
followed by the US. Latin America, capacity factors to reach new
Global wind turbine manufacturing capacity, 2020 primarily Brazil, serves as a blade heights, as much as 44% in Europe
export hub to North America and in 2020. The advancement and
other markets. technical standardisation of
Other 1%
floating wind technology over the
Latin America 4% This increasingly global supply next decade will usher in similar
India 8.5% chain has excelled in technological achievements in performance and
innovation over the last decade. utilisation.
Global average rotor diameters
US 10% have from 82 metres in 2010 to Still, technological advancements
nearly 120 metres in 2020, while and best-in-class innovation have
average hub heights have not sheltered the global wind
120GW China 58% sprouted from 81 metres to 103 supply chain from recent
metres over the same period.2 headwinds. From competitive
Europe 18.5% Turbine sizes have increased by tenders to geopolitics to circularity,
more than 100% in Sweden, Brazil forces of change are compelling
and Canada. Altogether, these the industry to react with greater
developments have led to a nearly consolidation and coordination.
Source: GWEC Market Intelligence, November 2021. Note: Wind turbine manufacturing capacity refers to wind turbine https://www.wind-energy-the-facts.org/supply-chain-key-to-delivery.html
nacelle assembly capacity and does not represent actual nacelle production in 2020. Renewable technology innovation indicators: Mapping progress in costs, patents and standards, IRENA, 2022.

58 GWEC.NET
Consolidation as a response to
global pressures
Over the last few years, revenue
pressure, pandemic-related
challenges to logistics and
workforce availability, the ongoing
US-China trade conflict and a rise
in prices for raw materials and
commodities have impacted
pricing and procurement of wind
turbine components. As price
pressure on supply chains
increases (see Industry
Sustainability), consolidation and
vertical integration are reshaping
the way the global supply chain
operates.
Around 40% of global generator

demand and 45% of global wind
blade demand can be supplied by ease of doing business, relatively component suppliers in East Asia The global wind supply chain has
the in-house production of 15 lower production and labour costs, and Southeast Asia, such as in consolidated for efficiency but is
OEMs today, according to GWEC availability of local wind Taiwan and Vietnam. still exposed to headwinds, from
Market Intelligence. The global engineering skills, suitable competition for critical minerals to
number of OEMs has almost infrastructure and seaways. India is Where wind manufacturing and local content requirements to
halved from 63 in 2013 to 35 in now taking off as the second- export hubs have emerged (the unexpected geopolitical events.
2020. This consolidation has largest export hub within APAC for top five globally are China, Europe, The need for long-term and
helped achieve economies of scale wind turbine assembly and key India, the US and Brazil), extensive adequately ambitious policy
and lower LCOE, by housing components such as gearboxes, local value creation has followed in frameworks, as well as
manufacturing of several supplying Southeast Asian, the development of highly remuneration mechanisms for
components (such as turbines, European and the US markets. qualified workforces with skills in stable cost reductions, will be
gearboxes and other equipment) Moreover, top offshore wind wind turbine technology design increasingly important for
within a single company or turbine suppliers are gradually and engineering, wind resource mitigating supply chain risks (see
network of local partners. strengthening the role of Europe estimation, business development System Design). In addition,
and China as export hubs, and and research, manufacturing, maintaining and regulating free
Production is shifting to markets giving rise to new localised transportation, installation and and open international trade for
with relevant domestic demand, partners and independent O&M. wind turbine components will

support healthy price competition total materials in an offshore wind cobalt. The primary materials used minerals for wind turbines are
and a more efficient global supply farm, while concrete, in the range for blades are balsa wood, glass concentrated in certain
chain. of 243-413 t/MW, accounts for fibres and epoxy resins, as well as geographies.4 This means that
roughly 72% of an onshore wind more sustainable alternatives such global supply depends on a
The new geopolitics of the wind farm.3 as polyethylene terephthalate limited number of primary
supply chain (PET) and pultruded carbon fibres. producers, presenting potential
A wind turbine is a substantial Other electric, electronic and logistics and security risks. For
piece of construction and magnetic wind turbine While steel, iron, aluminium and the REE neodymium and
technology, with advanced components ( such as nacelles, concrete have fairly global dysprosium, the primary supply
machinery and high-strength rotors, generators, gearboxes and production supply chains, the markets are China, the US and
materials. The amount of steel cables) demand a decent mass of mining and processing of critical Myanmar. For nickel, the main
used in one wind farm is in the critical minerals including copper,
range of 107-132 t/MW, accounting nickel, zinc, REEs like neodymium 3. In a 221 t/MW offshore wind and 640 t/MW onshore wind farm, according to BloombergNEF.
4. China dominates crude steel production, with 57% of the market, according to the World Steel Association in 2021.
for 24% of total materials in an and dysprosium for permanent The remainder of the market is fairly diversified across India, Japan, the EU, CIS countries, NAFTA countries and
onshore wind farm and 90% of magnet generators, chromium and other countries.
Material breakdown of onshore and offshore wind turbines

0. 1%
Concrete 59.9%
4%
4.6%
8.6%
35.7%
Onshore Offshore Typical
54.1% Wind Turbine Wind Turbine 51.9% Direct drive Boron 0.1%
(kg/MW) (kg/MW) PMSG
28.5% Aluminium 1.1%
(t/GW)
Polymers
5.9%
Glass/Carbon composites2%
Key critical minerals 2.6%
3.4% Iron (cast) 4.9%
1.6% 1.6%
Steel 29.4%
REE Chomium Copper Nickel Others Zinc
Sources: IEA, Carrara et al. (2020); Elia et al (2020); GWEC Market Intelligence. Note: PMSG = Permanent Magnet Synchronous Generator.

60 GWEC.NET
markets are Indonesia, the The IEA forecasts that clean

Share of top three producing countries in total processing of selected minerals and fossil
Philippines and China, while for energy technologies will become
fuels, 2019 (%)
copper the main markets are the primary source of demand for
China, Chile and Peru. most minerals, driving up global
demand for copper and REEs by
Oil refining Fossil Fuels
China dominates the processing as much as 40% by 2040, nickel
of many of the minerals and REEs and cobalt by as much as 60-70% LNG export
required to deliver the energy and lithium by nearly 90%, in a
transition. This applies not only to sustainable development Copper Minerals
the copper, nickel and REEs scenario.6
Nickel
required for wind turbines, but also
the lithium, nickel and copper Along the supply chain, China Cobalt
required for battery storage and dominates the processing and
EVs, the REEs needed for EV refining operations of key wind Lithium
motors and the nickel and turbine minerals, with a majority
Rare earths
zirconium used in electrolysers for share of the global market for
green hydrogen. copper (40%), nickel (35%) and 0 20 40 60 80 100
REEs (87%).7 There are several
According to GWEC Market implications of increased reliance
United States Russia Australia Indonesia Finland Argentina Estonia
Intelligence, nearly 30% of the on a wind supply chain which is China Qatar Chile Japan Belgium Malaysia
wind turbines installed in 2020 heavily concentrated in a small
used direct and hybrid drive number of geographies:
generators which required Sources: IEA (2020b), USGS (2021), World Bureau of Metal Statistics (2020); Adamas Intelligence (2020)
neodymium and dysprosium for l New geopolitical considerations
permanent magnets. That share is come into play, where security of
expected to increase to nearly supply and open trade could be standards, where geographic human rights and economic
50% of installed turbines globally impacted by international concentration of production and dimensions.
by 2025, given that most offshore conflict, trade disputes, political processing in a few countries
wind turbine models use instability or administration could give outsized influence to l Price exposure increases, as the
permanent magnet generators.5 By change. a few regulatory authorities on global supply chain must rely on a
2030, demand for REEs in the wind supply chain practices and legal market with few suppliers, leaving
industry is likely to double from l Regulatory frameworks less frameworks which cover actors worldwide vulnerable to
today’s number. exposed to international environmental, social, labour and price spikes caused by
5. Global Wind Turbine Generators Supply Chain Update, GWEC Market Intelligence, December 2021.
6. https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions/mineral-requirements-for-clean-energy-transitions. It is important to note that forecasts for commodity demand vary between different institutions.
7. The IEA notes that China’s market share of nickel refining is even higher when accounting for Chinese companies operating in Indonesia, which makes up 15% of the global market. https://www.iea.org/data-and-statistics/charts/share-of-
processing-volume-by-country-for-selected-minerals-2019

unforeseen externalities (e.g. required for climate and energy supply required over the next few
COVID-19 pandemic) or a targets. Governments can work with decades, investing in recycling
controlled tightening of supply. industry to establish reliable technologies and circuits and jointly
Mineral prices are already more long-term price benchmarks, plan calling for market transparency and
volatile compared to commodities voluntary stockpiling of critical open trade.
like crude oil. Some actors, minerals to shore up security of
including governments, may supply, impose regular evaluation of International coordination on
invest in strategic reserves, while ESG risks of importing and resource and material
others will be left to compete on exporting entities, implement sustainability
the open market.8 sustainability and recycling goals While the legacy energy industry
and invest in technology innovations, is associated with a pattern of
l Risk of a delayed energy materials efficiency and materials so-called “resource colonialism”
transition, as competition for alternatives. This work can also be which has transformed the
procurement of critical minerals steered by international energy geopolitical landscape today, the
and REE increases, actors in the authorities like IRENA and the IEA, clean energy transition will usher
renewables supply chain may which can convene governments in a shift in trade patterns and
experience disruptions or around the common interests of the production hubs. As certain
delays in manufacturing. global energy transition. The markets and export hubs emerge,
European Commission’s Action Plan it will be important to ensure that
l End-of-life recycling plays a on Critical Raw Materials published the dividends of supply chain
greater role, as the scale up of in 2020 offers an example of how activity are equitably distributed.
mining and production of critical governments can coordinate on
minerals will need to be foresight, analysis and strategic The wind industry must avoid the
accompanied by investment in actions to strengthen the clean models of exploitation which have
material recovery and recycling. energy supply chain.9 harmed the reputation of the
Currently, copper, nickel and legacy energy sector in
aluminium benefit from high It will be crucial for policymakers communities around the world.
recycling rates, while there are and actors in the critical minerals and This can be done by efforts such
no commercial recycling REEs supply chain, including the as intensifying ESG compliance
processes for REEs. wind industry to work together to across the value chain, raising
ensure secure and sustainable public awareness of project
Policymakers can play a role in supply. This includes prioritising the benefits through community
steering the timely and sufficient needs of clean energy technologies education and training
supply of materials to meet the to send a clear signal about the programmes, as well as public
demands of wind energy growth volume of critical minerals and REE campaigns for socioeconomic and
8. Japan has an official target for 80% self-sufficiency in mineral resources (base metals) by 2030 and 100% by 2050. This was prompted in part by a ban on export of certain REE from
China to Japan in 2010. See: https://www.argusmedia.com/en/news/2201049-japan-targets-100pc-base-metal-selfsufficiency-by-2050.
9. https://ec.europa.eu/commission/presscorner/detail/en/IP_20_1542
GWEC.NET
environmental responsibility in the components which complies with A simplified materials breakdown of the wind value chain
industry – particularly in countries such international standards.
with weaker governance and
under-resourced public authorities. In addition to critical minerals and Neodymium
Permanent
REEs, other components raise magnets PMG
Dysprosium generator
The intensifying focus on upstream sustainability and recyclability
Nacelle
materials in the wind supply chain issues in the supply chain,
Copper Generator
highlights the need for including balsa wood and epoxy (non-PMG)
international coordination for social resins for blade production. Balsa
and environmental sustainability. wood is one of the key components Aluminium Wind
Recycling,
repurposing
Supply chain risks are particularly of the blade core for many turbine turbine or disposal
high in the mining sector, which models, due to its flexibility, Steel Tower
Concrete
has been associated with issues strength and lightweight nature.
such as human rights violations, The vast majority of commercial
Carbon fibre Blades
land-grabbing, corruption, tax balsa wood is supplied by & fibreglass
avoidance and adverse Ecuador, although trade has been
environmental impact.10 disrupted by the pandemic and Mining & Processing Manufacturing End-use End-of-life
changing climatic conditions. As a
Global bodies such as the result of disruptions to supply and
International Labour Organization increased demand, the costs of
Source: Carrara S., Alves Dias P., Plazzotta B. and Pavel C., Raw materials demand for wind and solar PV technologies in
(ILO), the United Nations High balsa wood are also rising: the transition towards a decarbonised energy system, EUR 30095 EN, Publication Office of the European Union,
Commissioner for Refugees Ecuador’s balsa exports were Luxembourg, 2020, ISBN 978-92-76-16225-4, doi:10.2760/160859, JRC119941.
(UNHCR), the OECD Due worth $221 million in 2019 and

Diligence Guidance for jumped to $788 million in 2020.12
Responsible Business Conduct and balsa wood forestry practices and environmentally and socially
the UN Guiding Principles on As with the extractive industries, the export, as well as hastened R&D sustainable foresting practices.
Business and Human Rights balsa wood trade is vulnerable to efforts for alternative materials,
provide guidelines for international ethical and environmental such as Aerovide’s 2020 Epoxy resins are used as a
social criteria for the wind supply concerns, including illegal announcement of a balsa-free rotor lightweight and resilient material
chain.11 From OEMs to developers, deforestation practices and blade.13 Nonetheless, while balsa which can widen the diameter of
the industry should be stringent in displacement of indigenous wood remains a core material for blades. These are fabricated using
ensuring transparent and audited communities living in forest areas. blade production, the industry is fibre-reinforced composites with a
procurement processes, and This has raised public scrutiny of responsible for ensuring it procures balsa wood or foam core. Epoxy is
supply of materials and the wind industry’s involvement in from suppliers which adhere to a combustible thermoset resin and
not re-mouldable or currently
10. https://www.somo.nl/wp-content/uploads/2018/01/Final-ActionAid_Report-Human-Rights-in-Wind-Turbine-Supply-Chains.pdf
11. International social criteria focus on promoting international labour standards and human rights, including combating forced labour, slavery, child labour and unfair discrimination.
recyclable using commercial
12. https://english.elpais.com/usa/2021-11-26/how-the-wind-power-boom-is-driving-deforestation-in-the-amazon.html recycling processes, although
13. Global Wind Blades Supply Chain Update, GWEC Market Intelligence, 2021.

there are many public-private thermoset composites under the electrons. As a pillar of the world’s As a baseline, it is worth
initiatives underway to Circular Economy for Thermosets future energy mix, the wind comparing wind energy’s GHG
commercialise the value chain for Epoxy Composites (CETEC) industry bears greater emissions footprint with other
recycling of blades (see initiative, announced in 2021.14 responsibility for the environmental electricity generation technologies.
Sustainability initiatives in the wind impact of its own industrial supply Full lifecycle GHG emissions
industry). For instance, a coalition Moving from renewable to chain and activities. Simply put, assessments provide an important
of industry and academia are sustainable energy renewable energy must now be a benchmarking exercise to
undertaking research in new It is no longer enough for the wind sustainable industry, accountable understand the emissions attached
technology to enable circularity for industry to produce green to increasing scrutiny on the to various electricity generation
emissions related to its entire value technologies. The IPCC’s AR5
chain. report, representing the global
Comparative lifecycle GHG emissions by electricity technology scientific consensus on energy
Building on the SOL addressed in systems and climate change,
the Society section of this report, shows that a range of
Coal the wind industry’s licence to technologies can provide
operate is being held to an electricity with less than 5% of
Gas
increasingly high environmental the lifecycle GHG emissions of
Biomass* standard by governments, wider coal power, with the lowest
industry and civil society. emissions for wind power.15
Geothermal
This lifecycle assessment compares different ways
Accounting bodies such as the
Hydropower
to deliver the same functional unit, such as 1 kWh Science-Based Targets Initiative For wind and other renewable
of electricity, and quantifies GHG emissions,
co-benefits and detrimental side-effects of
(SBTi) and campaigns such as energy technologies, emissions
Nuclear mitigation technologies and measures, including Business Ambition for 1.5°C, SME are mainly associated with
other environmental problems and the use of
resources such as water, land, and metals.
Climate Hub and the Race to Zero manufacturing and installation
Solar PV-Utility
are creating a global direction of activities. Further reductions of
Wind Onshore travel for businesses in the green lifecycle GHGs in these segments
economy. The wind industry is could be attained through cleaner
Wind offshore already demonstrating proactive production, raw materials
responses to this challenge, and it alternatives and improvements in
0 500 1000 1500 2000
(gCO2eq/kWh)
is vital that it continues to invest in performance and efficiency.
innovation and circularity solutions
Direct Emissions Infrastructure and supply Chain Emissions Methane Lifecycle Emissions as estimated in AR5 to maintain its position at the The steel and concrete needed for
forefront of the energy transition. wind turbines are largely
Sources: AR5- IPCC WG III Fifth Assessment Report, (Caduff et al., 2012; Dale and Benson, 2013), (Arvesen and Hertwich, 2011) ,Wind
(Arvesen and Hertwich, 2012), PV (Kim et al., 2012; Hsu et al., 2012), geothermal power (Sathaye et al., 2011), hydropower (Sathaye et al., 2011; 14. https://www.vestas.com/en/media/company-news/2021/new-coalition-of-industry-and-academia-to-
Hertwich, 2013), nuclear power (Warner and Heath, 2012), bioenergy (Cherubini et al., 2012). Annex II, Annex II.6.3 and Section A.II.9.3 for commercialise-c3347473
methodological issues and core literature. *Note: Lifecycle emissions from biomass are for dedicated energy crops and crop residues. 15. https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_chapter7.pdf

64 GWEC.NET
produced from carbon-intensive Approximately 90% of the markets and from sharp increases
processes. However, enhanced materials and components of a in raw material and logistics costs.
collaboration between these key wind turbine’s total mass can be
upstream materials sectors and the recycled under current conditions. However, the industry is
wind industry is signalling demand This proportion consists of the proactively changing its production
for green steel and concrete, while foundation, components of the processes to support the
introducing a role for wind energy nacelle and the tower, made from recyclability of blades and improve
to power the decarbonisation of materials like steel, reinforced its circular economy. These include
upstream production processes. cement, copper wire and the company Modvion, which
Despite wind energy’s low full electronics, which can be produces wooden turbine towers,
lifecycle emissions, sustainability commercially recycled. The as well as Siemens Gamesa
challenges are being acted upon remaining 10% of a wind turbine’s Renewable Energy’s launch of the
with new innovations to reach net mass consists of composite first fully recyclable blade in 2021,
zero and “waste zero” through a materials – glass or carbon fibres with a new resin that can be more
circular economy approach within and a polymer matrix used in the easily separated to recover
this decade. production of wind turbine blades materials.16 Blade manufacturers
– which are more challenging to are also moving away from
Sustainability initiatives recycle. They are non-toxic and materials such as balsa wood,
in the wind industry safe for landfills, but the industry is which is harvested from forests in
GWEC forecasts more than 550 committed to a path of sustainable and around Ecuador, and replacing
GW of additional onshore and repurposing and recycling, rather them with recyclable foams such
offshore wind capacity will be than wasting resources. as polyvinyl chloride (PVC) or
installed by 2026. Conversely, polyethylene terephthalate (PET).
nearly 200 GW of onshore wind The main challenge is not a lack of
projects, mainly in Europe and the blade recycling technology, but the The three-year DecomBlades
US, will reach their end of economics and scalability of the project established in 2021 brings
operating lifetime by 2030. required composite recycling together a consortium of 10
Therefore, while reducing technologies. These are not yet partners, including manufacturers
emissions throughout the wind commercially viable to factor into Siemens Gamesa Renewable
supply chain is crucial, the project lifetime and Energy, GE subsidiary LM Wind
management of decommissioned decommissioning costs – Power, Vestas, developer Ørsted
wind turbines must also be especially as the industry faces and a number of technical and
addressed. increased pricing pressures, both academic institutions.17 It aims to
from downward pressure in commercialise the value chain for
the recycling of wind turbines, in
16. https://www.siemensgamesa.com/en-int/newsroom/2021/09/launch-world-first-recyclable-wind-turbine-blade
particular the shredding of blades
17. https://www.siemensgamesa.com/newsroom/2021/01/210125-siemens-gamsa-press-release-decomblades-launched and use of shredded blade

Case study: Global Alliance for material in cement production and

advancing pyrolysis, or a process
Sustainable Energy to separate composite materials
Established in 2021, the Global Alliance for Sustainable under extremely high
Energy is an independent global alliance open to all temperatures.
actors recognizing the urgency of tackling the climate
emergency according to ‘just transition’ principles and Increasing the commercial viability
the need to promote and embed sustainability and of composite materials recycling
social responsibility in the renewable energy industry. will require collaboration across
sectors, including other industries
The Alliance brings together 17 founding members
dependent on composites such as
comprising utilities and global players in the solar PV
construction, electronics, transport
and wind value chains, sector associations and
and shipping. A larger and more
innovation partners, including GWEC. The aim of the
diversified waste stream across
Alliance is to ensure the renewables sector is fully
multiple sectors will strengthen the
sustainable and respects human rights across the
business case for investment in
entire value chain. While wind and solar have distinct
recycling technologies and
characteristics as renewable technologies, they are
innovations.
highly complementary and share both similar growth
trajectories and similar challenges to their sustainable
In addition to the industry’s
deployment. Closer alignment between wind and solar
investments in circularity solutions,
is therefore critical for accelerating the energy
policymakers should also align
transition.
their climate plans with public-
To achieve this, the Alliance will work to define private research and innovation
sustainability standards and Key Performance programmes. These programmes
Indicators (KPIs), achieving ambitious targets together can focus on scaling recycling
and fostering collaboration. The Alliance’s current technologies and identify high-
membership spans NGOs, associations and civil performance sustainable materials,
society representatives, utility companies, material ensuring climate targets and
suppliers and equipment manufacturers, renewable circularity go hand-in-hand.
project developers and plant builders, technical and
technological partners, and, end-users, spanning
industrial, commercial and domestic energy
consumers.

66 GWEC.NET
PART FOUR: SYSTEM TECHNOLOGY
Part Four: System Technology

2021 represented a year of Electrification will be the primary Technology innovation has been a
gathering global momentum on decarbonisation pathway for the driving factor in the dramatic cost
decarbonisation. Ahead of and transport, heating and cooling reductions of renewables, allowing
during COP26, the industry sectors. Green hydrogen will wind power to move from the
witnessed a slew of new enable the abatement of emissions margins of the energy sector to the
announcements from countries in industrial sectors and long- mainstream. Innovation will once
committing to a net zero pathway range surface and marine again play a critical role in the
(e.g. India, Vietnam), as well as a transport. Delivering a stable and large-scale integration of wind,
number of renewables and secure low-carbon power system with technological solutions for
wind-specific targets.1 With the necessitates a seismic shift in how flexibility, storage at varying
technology and cost- we produce and manage energy durations and responsive
competitiveness of wind and solar writ large. management of demand and
energy proven, it finally feels like supply. Whole-systems thinking
the world is poised on the edge of The world therefore needs to plan will be of paramount importance.
a renewables revolution. for a transition that touches every
part of our energy system, from Many commentators such as BNEF,
Such a revolution will see a rapid how we use cars and heat our IRENA and the IEA have shown that
increase in the global installed homes to the interconnections with the energy system of the future will
capacity of wind power, which other countries and the not only be decarbonised but far
must scale up nearly 10-fold over decarbonisation of industrial more decentralised and digitised.
the next three decades to meet processes. The global wind Such a system will have important
growing demand for clean power. industry is confident that with co-benefits in terms of job creation
By 2050, 73% of the installed fit-for-purpose policies and and health outcomes, as well as
capacity and 63% of all electricity regulatory frameworks which drastically increasing energy
generation will come from wind cover the whole energy system, access in an increasingly
and solar PV energy. 2 an innovation-led approach to distributed energy system.
renewables integration can
But replacing coal and gas in the deliver a low-cost, stable and Based on recent evidence from
energy mix will necessitate new secure energy system that is countries with significant
ways of ensuring system stability better for people and renewables penetration (Costa
and flexibility. Integrating such communities. Rica, Sweden, UK and Denmark), a
high levels of renewables can no
longer be seen through the prism
1. https://www.wri.org/insights/how-countries-net-zero-targets-stack-up-cop26; Net Zero Action Tracker
of the power sector alone. 2. World Energy Transitions Outlook: 1.5°C Pathway, IRENA, 2021.

68 GWEC.NET
flexible, decentralised and beginning to witness the demise of centres. As EVs, microgrids and System operators will need to
renewables-led system will this traditional transmission-scale home power systems begin to play develop the tools and regulatory
ultimately be the most cost- arrangement and the breakdown increasingly significant roles in the frameworks to send accurate
effective and resilient option for of that linear relationship between energy system, decentralisation signals to the market, and to
energy consumers.3 This chapter supply and demand. This has led further increases. ensure that the right products and
sets out GWEC’s view of the future to the former CEO of prominent services exist to address system
energy system and explores how UK/US system operator, National Future energy systems will have requirements such as grid
technology innovation will once Grid, declaring that the concept of no need for large, inflexible power frequency and inertia. In markets
again support the next phase of baseload is outdated.4 stations which run constantly. In a with high renewables penetration,
renewables growth. renewables-led system, we increasingly see wind projects
First, electricity production from flexibility is the chief currency. themselves being able to offer
A changing paradigm and the renewables is highly predictable, On the supply side, technologies these system services.6
demise of baseload but output is variable. which can dispatch power quickly
In the conventional model of Renewables obviously produce will be rewarded for meeting Four key technology areas will be
supplying electricity in centralised most when the wind is blowing demand spikes or plugging the crucial enablers of a renewables-
energy markets, large thermal or and the sun is shining, flooding gap in any under-supply of led system: digitalisation; hybrid
nuclear power stations were power markets with a bountiful electricity. Generators with high projects; green hydrogen; and
located near cities or industrial supply of cheap generation. unit start-up costs, such as energy storage. These are
centres. These plants were always However, there are periods where traditional large-scale thermal and reviewed below:7
running to minimise start-up and renewables generate less. nuclear plants, will therefore be at
O&M costs, giving rise to the Reliance on an ever-increasing a disadvantage. Instead, battery Digitalisation
“baseload” concept. The supply margin to meet demand in and hydrogen storage, As the themes of digitalisation and
relationship between supply and this reality is inefficient, resulting accompanied by a small amount decarbonisation converge, the
demand was linear; if demand in significant oversupply of of highly efficient gas peaking renewables industry is undergoing
increased then supply increased capacity. plant with CCUS, can be utilised to rapid digital transformation. A
by burning more fossil fuels. respond to demand fluctuations.5 range of digital technologies will
Second, as a decentralised source On the demand side, dynamic enable the transformation of the
The rapid rise of low marginal cost of power, wind farms are sited in demand management and energy system and reduce friction
renewable generation is disrupting areas of best available wind demand-side response (DSR) will in the integration of renewables.
the established paradigm of the resources, often further away from be integral to the global energy Generators, system operators, and
global energy system. We are urban or industrial demand system. consumers will increasingly
3. This calculation includes the “system costs” of integrating renewable generation. See: https://nic.org.uk/studies-reports/smart-power/; https://ukerc.ac.uk/publications/cost-of-energy-review/.
4. https://energypost.eu/interview-steve-holliday-ceo-national-grid-idea-large-power-stations-baseload-power-outdated/
5. IRENA’s World Energy Transitions Outlook (2021) acknowledges a limited role for CCUS to abate energy and process emissions in industrial processes, like the cement, steel, chemicals and plastics sectors. Around 6% of the total carbon emissions
abatement required by 2050 under the 1.5°C Scenario are delivered by the CCUS industry, compared to 70% by renewables-based power generation, electrification of end-use sectors and energy conservation and efficiency measures.
6. https://www.nationalgrideso.com/future-energy/projects/pathfinders/stability/Phase-3 ;
7. The discussion on four technologies does not include other enablers, such as fostering hybrid offshore interconnections. Detailed overviews of innovative technologies which will enable a flexible renewables-led system are in IRENA’s “Innovation
landscape for a renewable-powered future” report (2019) and RenewableUK’s “Powering the Future” report (2020).

Case study: Cooperative control of wind turbines can increase site-wide AEP by up to 5%
Provided by: WindESCo
Site A Site B Site C Site D
In nature, many species have In wake steering, the yaw
OEM GE Renewable Multiple Suzlon Siemens Gamesa
realised the evolutionary benefits position of upwind turbines is
Energy Renewable Energy
of operating as a coordinated unit. modified so the yaw orientation
Swarming is the collective motion is no longer aligned directly into Capacity 145 MW 300 MW 32 MW 90 MW
of a large number of insects, the wind. As a result, the wind Estimated Annual 2.0 % 2.5 % 0.7 % 0.9 %
turbine wakes can be deflected Benefits in AEP and NPV $684,000 $820,000 $22,535 $99,959
birds, fish or animals. This is a
topic of active scientific research or steered away from the inflow
and is even being used to of neighboring downstream wake steering alone can range For a 1 GW fleet, the Swarm
develop AI algorithms. turbines. Yaw control anywhere from sub 1% to retrofit solution would provide a
At dusk, starlings swarm in the improvements adjust the nacelle greater than 2%: five-year net present value (NPV)
sky and fly in complex formations, position of the turbine to of up to $30 million. Through
When combining these
avoiding collisions by maximise energy capture and continuous 3-5% AEP
improvements with additional
communicating with their minimise wear and tear on the improvements, owners and
applications that allow the wind
neighbors. Migratory birds fly in a yaw drive components. investors can accrue a substantial
turbines to be controlled
V-formation which reduces their return on investment (ROI) from
WindESCo Swarm combines collectively, the applications can
energy expenditure between existing installations and enable
hardware and software as an predict wind direction from
12-20% while flying long them to compete more effectively
integrated system to allow nearby turbines to help capture
distances. with newer farms.
turbines to communicate with more energy and reduce extreme
Is it time to learn from nature and and learn from each other. The loading on other turbines. Find out more: https://www.
make wind plants more “social” system was developed over windesco.com/swarm
The AEP benefit of wake steering
and efficient? three years with a will depend on the site layout,
multidisciplinary approach wind and atmospheric turbulence
Combining wake steering
combining the fields of turbine conditions and the turbine model.
and collaborative control to
loads, controls, meteorology, However, when paired with other
boost AEP
sensing and machine learning. cooperative control applications
Wind plants lose anywhere which allow the turbines to share
The system has been tested on
between 5-20% of output to wakes information to optimise yaw
13 turbines across two wind
caused by the turbines’ upwind. among other factors like
plants. The first commercial
Wake steering is one strategy for predicting wind direction shifts,
implementation on three wind
mitigating wake losses to increase the system can deliver a 3-5%
plants with over 300 MW of
the overall plant’s annual energy improvement in site-wide AEP
capacity is underway in North
production (AEP), but this is without negatively impacting the
America. Assessments have
heavily site-dependent. lifetime of assets.
found that the AEP gains from

70 GWEC.NET
harness artificial intelligence (AI) physical infrastructure, but also Digitalisation and AI are also
to make better predictions and to intelligence. The grid in the future improving the performance of
improve operations. The industry energy system is likely to be a data renewable assets themselves,
is already witnessing the use of network grafted onto a physical reducing operating costs and
data to manipulate demand, network, enabling one-way flow of bringing down LCOE. AI can
improve predictability in energy distribution that we optimise output and algorithmically
weather patterns and renewables currently have, allowing for a detect potential equipment failures
output and enable consumers to multi-directional flow of energy before they become problematic,
become active “pro-sumers” in and information with effective and i.e. predictive maintenance.
the market. precise controls. Robotic solutions such as remotely
operated vehicles (ROVs) and
IRENA has found that “accurate Digitalisation is also driving autonomous drones/vessels can
weather forecasts and very innovation in business models. monitor and rectify equipment
short-term to long-term forecasting Increasing decentralisation of the failures in remote or challenging
are key for effectively integrating energy market will mean a much environments, such as at sea,
[variable renewable energy] larger number of actors in the improving onsite health and safety
generation into the grid.”8 power sector. In markets with high and project costs.11 small islands, hybrid solutions can
Innovation in weather forecasting renewables penetration, both bring value and security by
and modelling, such as through AI commercial and household Hybrid projects facilitating system integration, as
or machine learning, enables consumers are playing an Hybridisation, i.e. the combination well as enabling micro-grid/
generators and system operators increasing role in their energy use of wind energy with another off-grid solutions.
to more accurately predict weather to lower emissions and maximise energy source and/or storage
patterns and wind/solar output.9 efficiencies. EV ownership is rising, solution, is a key topic in the A hybrid power project can,
Machine learning is also enabling and the Internet of Things (IoT), renewables industry. Hybridisation therefore, use complementary
system operators to increase grid including smart appliances and offers opportunities to increase the renewable technologies to create a
stability; better short-term heating/cooling systems, is gaining share of renewables in the grid stable supply of power at project
forecasting can result in increased traction. Products and services while replacing fossil fuels in level. For example, wind combined
dispatch efficiency, thereby which use AI to aggregate demand mature markets like Europe, the US with solar PV can generate power
improving reliability and reducing can shift and delay demand on the and Australia, and high-growth during cloudy periods, less windy
operating reserves needed.10 system to better match generation markets like Southeast Asia. In periods and darkness. Such
Non-renewable plants can also be profiles. Business models and EMDEs and remote areas like systems can be provided at
adjusted and ramped up or down energy tariffs can incentivise
based on this forecasting. consumers to modulate power 8. Innovation landscape brief: Advanced forecasting of variable renewable power generation, IRENA, 2020.
usage at times of the day with 9. https://www.nationalgrideso.com/news/former-deepmind-experts-ai-tool-could-help-boost-national-grid-esos-solar-
Grids need comprehensive more plentiful and cheaper forecasts; https://www.nature.com/articles/s41586-021-03854-z
10. https://www.ey.com/en_uk/power-utilities/why-artificial-intelligence-is-a-game-changer-for-renewable-energy
upgrades not only in terms of generation. 11. Making Renewables Smarter, DNV, 2017.

Case study: Boosting turbine performance with the help of AI

Provided by: Kavaken
Forecasting and avoiding turbine operation and maintenance evaluate hundreds of features to before a costly failure occurred.
component breakdowns play an activities. The primary services produce a smart condition Had the fault not been detected, it
important role in reducing costs include fault detection, indicator that triggers flags upon would have likely had adverse
and increasing value. Data-driven diagnostics and prognostics, reaching certain thresholds. effects on adjacent components,
Software as a Service (SaaS) power curve analysis and causing costly repairs and
One case study is in the automatic
solutions can help turbine production forecasting. financial losses.
detection of a bearing fault in the
operators boost energy
The predictive maintenance high-speed shaft of a wind turbine Preventing costly equipment
production and value. For
module employs an ensemble of gearbox. Starting from March failures is only one of the ways
instance, Kavaken’s predictive
tailored anomaly detection 2020, the condition indicator of digitalisation helps improve
maintenance module helps
algorithms to determine each the gearbox subcomponent performance, reduce costs and
operators in determining the root
turbine component’s health status increased dramatically, which risks. With vast amounts of data
causes of faults and also spare
and prognose remaining useful triggered the system to raise a available at wind power plants,
part and maintenance planning.
life before a failure occurs. Built-in fault flag on 16 March. there is significant additional
Kavaken has been engaged with algorithms sift through large value to be created via other
The heatmap graph below
an IPP with a large fleet of wind volumes of vibration, SCADA and applications, such as power curve
depicts condition indicators
turbines to optimise wind farm other accessible data, and analyses, production forecasting
across time; the darker the cell,
and operations optimisation.
the more severe the condition.
Gearbox HSS NRE Kavaken’s algorithm raised flags Find out more: https://www.
First alarm
16 March 2020
Bearing Replacement
22 June 2020
on 16 March for the 2nd planetary kavaken.com/
stage (GBX_2PS), high-speed
stage (GBX_HSS) and
GBX_1PS 30
intermediate speed stage (GBX_
GBX_2PS
ISS) subcomponents as they
GBX_HSS 20 exceeded the learned and
GBX_ISS optimised thresholds.
GBX_Rot_Brg
10 Following a gearbox endoscopy
Gn_De
in June, maintenance personnel
Gn_NDe
0 confirmed that the high-speed
shaft non-rotor end bearing was
2019-11-16
2019-12-01
2019-12-16
2020-01-01
2020-01-16
2020-02-01
2020-02-16
2020-03-01
2020-03-16
2020-04-01
2020-04-16
2020-05-01
2020-05-16
2020-06-01
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2020-07-16
2020-08-01
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2020-10-01
2020-10-16
2020-11-01
faulty and required replacement,

proving that the algorithms
detected the fault three months

72 GWEC.NET
grid-scale, regional scale or at connection costs, as well as Green hydrogen its critical future industries in its
micro-grid level as a feasible expanding revenue opportunities. Last year, in the 2021 Global Wind current Five-Year Plan (2021-
solution for rural electrification and Report, GWEC set out the roles for 2025), alongside quantum
community energy access. To help speed up the global green hydrogen and Power-to-X information and aerospace
energy transition, hybridisation applications in the deep development.16 India launched its
Hybridisation as a solution has clear system value by decarbonisation of industrial sectors much-awaited National Hydrogen
combining several technologies is providing cost-efficient and the provision of long-duration Mission in 2021, targeting a
well underway in many markets. electricity, improving flexibility storage. It is worth noting that in scale-up of domestic green
Currently Australia, the US, China for integrating more renewables IRENA’s 1.5°C scenario envisions hydrogen production and potential
and India are known key hybrid into the grid and offering a one-quarter of global electricity mandates for refineries and
markets. According to GWEC better match of supply-demand generation by 2050 dedicated to fertiliser companies to integrate
Market Intelligence, developers in profiles. green hydrogen production, green hydrogen and green
the US brought 2,238 MW of requiring around 10,000 GW of ammonia into industrial processes.
hybrid project capacity online in Although these enablers are wind and solar capacity.14 The EU has made green hydrogen
Q4 2021 alone – nearly half of the recognised, political support, such a part of its European Green Deal,
total hybrid installations in the US as specific procurement Over the last year, global interest in which was announced in 2020,
in 2021.12 In China, 1,350 MW of frameworks, is still lacking in hydrogen has increased even marking hydrogen networks as
hybrid projects were awarded in current market design. Hybrids further with more countries vital for “a clean and circular
2021; while in India, 2,800 MW and also require technical enablers, announcing national hydrogen economy.”17
1,950 MW of hybrid projects were such as more economical and roadmaps or strategies. As of late
awarded in 2020 and 2021 efficient storage solutions to bring 2021, more than 30 countries from The wind industry is now
respectively. down the cost of storage as well as Paraguay to Morocco to New partnering directly with a range of
digital solutions/energy Zealand had a hydrogen strategy in industrial sectors to drive
Hybrid projects can be more management systems (EMS) to development or already decarbonisation via green
economic due to efficient project manage generation and dispatch. published.15 hydrogen as a fuel. For instance,
design, including the size of the With these enablers, the level of Vattenfall have collaborated with
total project, as well as market penetration of hybrid As an example, China issued a Swedish steel fabricator SSAB and
management and solutions is expected to grow hydrogen roadmap for the mining company LKAB on a pilot
commercialisation of the project’s sharply, especially in developing transport sector in 2016, and has plant to produce sponge iron with
power output. A suitable offtake economies.13 named hydrogen energy as one of green hydrogen.18 Ørsted and ITM
agreement can optimise the
capture of full output of the project
12. These figures include hybrid projects combining: wind and storage; solar and storage; wind and solar and storage; and wind and solar.
at suitable times of supply. Hybrid 13. For example, see the Zhangjiakou Energy Transformation Strategy 2050 developed by municipal authorities for Zhangjiakou City, in co-operation with the China National Renewable
projects are growing around the Energy Centre and IRENA, in 2019: https://irena.org/publications/2019/Nov/Zhangjiakou-Energy-Transformation-Strategy-2050.
14. World Energy Transitions Outlook 2021, IRENA, 2021.
world as corporates and investors 15. Geopolitics of the energy transformation: The hydrogen factor, IRENA, 2022.
seek the benefits of stable supply, 16. https://cset.georgetown.edu/wp-content/uploads/t0284_14th_Five_Year_Plan_EN.pdf
17. https://www.fch.europa.eu/news/european-green-deal-hydrogen-priority-area-clean-and-circular-economy
efficiencies in EPC, O&M and grid 18. https://group.vattenfall.com/uk/what-we-do/roadmap-to-fossil-freedom/industry-decarbonisation/hybrit

Case study: China calls for integrated energy solutions

In 2020, China upgraded its NDC hydropower and storage; or l Rely on regional power market
by targeting peak CO2 emissions wind, solar hydropower, coal and services, fully liberalise
before 2030 and carbon neutrality and storage. market-oriented transactions
by 2060. The government further and guide all kinds of market
l Fortowns, industrial parks and
proposed a new type of entities to adjust and interact in
large public facilities such as
renewables-based power system multiple directions.
airports and hospitals, an
as the mainstay, demonstrating
integrated power supply l Use modern information
variability and fluctuation, and
combines conventional and technologies such as 5G to
resulting in more complex and
renewable sources such as strengthen unified dispatch and
effective system balancing.
wind, solar, geothermal energy implement mechanisms for
Integrated energy solutions will
and biomass. generation, power users, energy
play a large role in increasing
storage and virtual power plants
power system efficiency and To support a renewables-led to participate in the market.
balanced energy supply in revolution, the NEA is targeting a
China. highly synchronised integration of At city level, China has also
source (supply), grid, load selected demonstration initiatives.
In March 2021, China’s National
(demand) and storage through Zhangjiakou in north-western
Energy Administration (NEA)
enabling technologies and power Hebei province is home to the
issued the Guiding Opinions on
market reform. largest wind capacity in China.
Promoting the Integration of
The city will give full play to the
Source, Grid, Load and Storage Three provinces (Zhejiang and big data industry to deeply
and Multi-Energy Fujian on the east coast and integrate energy resources, build
Complementarity. Qinghai inland on the Tibetan virtual power plants and maximise
To optimise the scale ratio of Plateau) have been selected as local consumption of renewable
various power sources to demonstration zones for this new energy.
maximise output and efficiency, power system. In January 2022,
Zhejiang released the In early 2022, China’s State
two types of hybrid projects are
“Construction Plan for Building a Council further issued a
promoted in China:
Provincial Demonstration Zone for comprehensive work plan for
l In
western rural regions, a New Power System with New energy conservation and
existing conventional power Energy as the Mainstay”. The emissions reduction as part of the
plants are used for large-scale guidelines for provincial 14th Five-Year Plan (2021-2025),
hybrid energy bases integration of source, grid, load encouraging industrial enterprises
combining: wind, solar, coal and storage are: and parks to give priority to the
and storage; wind, solar, use of renewable energy.

74 GWEC.NET
Power’s Gigastack project for a 100 reduce the cost of green hydrogen Case study: Green hydrogen and ammonia production in Spain
MW electrolyser system powered by 80% to $1/kg – foreseeing a
by offshore wind aims to potential five-fold increase in Wind energy is being relied upon Project to produce green hydrogen and
decarbonise the Philipps 66 green hydrogen use if achieved.21 across the world to decarbonise the green ammonia, which will connect
refinery processes in the UK by energy sector. This has led to renewable resources with industrial
2025.19 Analysis from WoodMac reported opportunities to decarbonise other consumption centres.
that renewable electricity would sectors, such as heavy industry and
In the first phase, the Catalina Project will
In 2021, Siemens Gamesa need to cost less than $0.03/kWh transport, through the production of
install 1.7 GW of wind and solar PV
Renewable Energy announced that by 2030 for green hydrogen to be green hydrogen or ammonia.
power, which will be connected to a 500
it had developed a project in fully competitive with grey Hydrogen can already be produced at MW electrolyser to produce 40,000
Denmark, the first of its kind, hydrogen in coal and gas- competitive prices in locations that have tonnes of green hydrogen per year. This
capable of producing renewable dependent markets like Australia, access to the richest renewable energy hydrogen will be transported through a
hydrogen in “island mode,” or Germany and Japan.22 Cost resources. New onshore and offshore “hydroduct” to a new ammonia plant,
connected to the grid, via an reduction in the price of wind farms producing energy at high which will have the capacity to produce
electrolyser connected to a wind electrolysers will further drive capacity factors, equipped with the 200,000 tonnes per year. The green
turbine; it has also added a battery down green hydrogen costs and latest infrastructure technologies such ammonia will be used to produce
system to the site to store excess provide supply chain and export as onboard electrolysers, are well- sustainable fertilisers, representing a
electricity.20 opportunities in some countries. positioned for the renewable hydrogen technological breakthrough for the
Where strong renewable energy production required to decarbonise decarbonisation of the agricultural
Of all renewable energies, offshore technical resources, lower LCOE, ‘hard to abate’ industrial processes that sector. The remaining green hydrogen
wind and wind/solar hybrid existing infrastructure and policy require significant amounts of energy. will be transported via the natural gas
projects have the highest potential factors (such as government grid and will be used to decarbonise
to improve the economics of green support, domestic demand for IRENA and the IEA have pointed out in
2019 that the high costs of renewable other ‘hard to abate’ industrial processes.
hydrogen projects due to cost- renewables, ease of doing
competitiveness, scalability, and for business, etc) exist, green hydrogen production can be The project, led by Vestas,
offshore wind projects, location. hydrogen production can take off. considerably lowered over the next 30 Copenhagen Infrastructure Partners
GW-scale wind projects paired years with sufficient investment, which (CIP), Naturgy, Enagás and Fertiberia,
with hydrogen highlight the Energy storage would also serve to facilitate a more will begin construction at the end of
opportunity for green hydrogen to Electricity storage will be a rapid deployment of wind energy. 2023, and in the second phase will
achieve commercial viability by critical enabler of integration of Countries such as Spain have committed reach 5 GW of wind and solar PV
the end of the decade. Accordingly, large volumes of wind and solar to renewable hydrogen, setting a target power to supply a 2 GW electrolyser,
in 2021 the US issued its first energy into the power system. In of 4 GW of electrolysis installed capacity with the goal of meeting 30% of Spain’s
“Energy Earthshot” framework to the case of battery storage, by 2030, and promoting the hydrogen demand for green hydrogen.
value chain and its integration into With input from: Tomás Romagosa,
19. https://gigastack.co.uk/
20. https://www.siemensgamesa.com/en-int/newsroom/2021/11/211110-siemens-gamesa-green-hydrogen-to-vehicles; different production processes. An Spanish Wind Energy Association
https://www.siemensgamesa.com/en-int/explore/journal/2021/03/siemens-gamesa-green-hydrogen example of this drive is the Catalina (Asociación Empresarial Eólica, AEE)
21. https://www.energy.gov/eere/fuelcells/hydrogen-shot
22. https://www.woodmac.com/press-releases/renewables-growth-may-close-green-hydrogen-cost-gap-by-2030/

Stages of the green hydrogen value chain market price signals. For example,
on windy days when power prices
are low due to significant supply,
PRODUCTION STORAGE AND TRANSPORT END APPLICATIONS asset owners can store surplus
power for dispatch when supply is
lower, therefore avoiding
Storage curtailment and maximising asset
Ammonia and
organic liquids, revenues. Increasingly storage
H2 Short periods and Long periods and
H2 carriers assets do not need to be located
low volumes large volumes Industry
RENEWABLE - Deposits - Natural geological near renewable sites; a virtual
ELECTRICITY - Solid Material storage power plant model can be utilised,
H2 whereby wind is sited in areas of
H2 and
liquefied H2 optimal resource, and storage is
Sector Integration sited closer to demand centres to
Transportation
improve price competitiveness.
Short distances Long distances and
CARBON Synthetic large flow rates
and small flow rates In markets with high renewables
FUEL Natural Gas - Gas pipelines
- Gas pipelines
(Power-to-gas) (pure or mixed GN) penetration, system operators are
(natural gas or
-Train, boat and Mobility increasingly procuring system
pure gas mix
CO2 -Trucks trucks (also known as ancillary)
Synthetic liquid fuels, services, such as contracts to
Power-to-liquid,
provide crucial technical
diesel, gasoline, Transportation and storage
methanol, kerosene Others
functions to maintain frequency
infrastructures for oil products
and inertia, as well as for
emergency grid services such as
Source: Hydrogen Roadmap. A commitment to renewable hydrogen, Government of Spain, 2020.
“black start,” or the synchronised
much greater level of flexibility to process of restoring generation to
lithium-ion battery pack prices The rapid cost reduction of battery power grids through the provision parts of the grid after a
have fallen dramatically, from storage has given rise to an of system services to power grid blackout.24 In renewables-led
$1,200/kWh in 2010 to $132/kWh increasing number of co-located operators. energy systems, it will be vital for
in 2021.23 These prices are taken generation and energy storage transmission and distribution
as an average across different projects. Such projects have Storage co-location also allows system operators to create an
end-uses such as EVs and multiple uses and benefits. First, generators to make the most of enabling framework for such
stationary storage projects but storage capability can alter the their assets by responding to services.
are even lower for battery EV time of power dispatch or smooth
23. https://about.bnef.com/blog/battery-pack-prices-fall-to-an-average-of-132-kwh-but-rising-commodity-prices-start-to-bite/
packs in particular ($118/kWh in renewable energy supply, allowing 24. https://www.nationalgrideso.com/balancing-services/system-security-services/black-start; https://www.nrel.gov/grid/
2021). a renewable project to contribute a black-start.html

76 GWEC.NET
Case study: The first carbon-neutral smart park in China

Provided by: Goldwind
Carbon neutrality initiatives can be by-products of cooled and heated water, electricity and gas
extensive projects requiring long- water can be used for the cooling and consumption in the park. Energy loss
term experience and practice. heating systems in the buildings. and consumption is displayed directly
There is also another 500 kW diesel on platforms, allowing for targeted
Since 2010, Goldwind has
generator to simulate the operation of analysis reports and improvements.
transformed its headquarters park in
an island micro-grid project.
Beijing into a “smart” park integrating The park also employs a smart
modern micro-grid technology, Energy storage devices, including operation system to improve
distributed wind power, distributed all-vanadium flow batteries, lithium operational efficiency and staff
solar energy systems, multiple energy batteries and supercapacitors, are experience with digitalisation. For
storage modes, energy-saving and used for peak cutting and valley filling example, the smart meeting
end-use scenarios. The park covers of the system and for regulating management system features online
an area of 120,000 square metres. power fluctuations to improve power room reservation and enables
quality in the park. improved energy consumption with
In 2021, the park became the first
automatic control of the air
carbon-neutral smart park in China
Smart management conditioning system and lighting
by developing a renewable energy
With energy-saving measures via devices based on the scenario and
system and undertaking China
buildings, air compressors, motors and number of people present.
Certified Emission Reduction (CCER).
precise aeration, the park saves
Power system 600,000 kWh/year of power and Project achievements
The power system includes two wind maximises efficiency by rationally Through renewable resources and
turbines, respectively 2.5 MW and 2.3 utilising the price difference between digitalisation, the park has achieved a
MW, and a distributed solar energy consumption peaks and valleys. Using a power generation of over 7,500,000
system with a capacity of 1.3 MW, chilled water thermal storage process, kWh/year, with over 50% green
enabling generation and consumption the air-conditioning system stores power consumption and carbon
of clean energy. energy during power consumption emissions reduction of 4,950 tonnes/
valleys and releases it during power year. At present, Goldwind is
Three micro-gas turbines, one 600
consumption peaks – saving 30-60% promoting zero-carbon services and
kW and two 65 kW, consume natural
power. Sensors controlling all air solutions to help others achieve a
gas to generate power that enables
conditioners and lighting devices green transformation and smart
the combined supply of cooling,
enable additional energy saving. upgrades of industrial parks.
heating and power in the park. The
power generated by the system is Smart efficiency management has Find out more here: https://www.
consumed locally. Meanwhile, the enabled digital and visual data on goldwind.com/en/

There will also be a significant role growth will rest on the integration l Afresh and holistic approach to and grid engineering specialists
for forms of long-duration storage of wind power at scale to create policy and regulation across on how to balance and maintain
(broadly defined as systems with a low-cost and secure energy sectors which embraces power grids with a high rate of
discharge range of anywhere from systems. To deliver this integration, technology innovation for a renewables penetration. It is vital
five to more than 1,000 hours), policymakers, industry and the renewables-based grid, and that this knowledge and best
such as pumped hydro, ammonia wider innovation community must invests in power grid operation, practice is shared globally.
and renewable hydrogen, to work together to ensure: responsiveness and balancing.
accompany high levels of
renewables and achieve low l Systems based around Policymakers committing to
emissions intensity.25 renewables undertake a new renewables and net zero targets
approach to system design should also develop cross-sectoral
A whole systems approach to based around the principal net zero delivery plans. There is a
regulation is needed concepts of innovation and now a growing catalogue of 25. https://www.energy-storage.news/longer-duration-
The next stage of renewables flexibility. knowledge from system operators storage-and-its-role-in-the-future-of-energy/

78 GWEC.NET
PART FIVE: INFRASTRUCTURE
Part Five: Infrastructure

The wind industry has already networks, logistics highways and running through many traditional remote communities and islands
moved from the margins of the ports, is curtailing the expansion of forms of infrastructure such as are prevalent.
energy sector to the mainstream of wind power and stifling the very ports, roads, transmission wires
energy production. But to reach a innovation needed to transform the and distribution systems, grid As offshore wind projects expand
goal of exceeding 8,000 GW of energy system. connections and grid balancing. and commercial-scale floating
installed wind capacity worldwide Many countries around the world wind projects proliferate, port
by 2050, wind energy deployment Industry, governments and experience a chronic lack of grid upgrades will be critical for the
must rapidly accelerate within this financial institutions all have a role infrastructure, with limited future success of the industry.
decade. to play in creating the right transmission and distribution Turbine sizes have increased
conditions for investment in capability; it is estimated that 759 dramatically in the last ten years,
Increasingly, a lack of facilitating infrastructure to enable the next million people globally still live with 15 MW turbines now on the
infrastructure is seen as a major generation of wind projects, some without access to energy or basic market. Experts now predict
limiting factor in the wind of which are already in the infrastructure (see Leapfrogging turbines with a 17 MW rating will
industry’s growth. In many planning pipeline today. the legacy energy sector where be commonplace by 2035.
countries, lack of infrastructure, Infrastructure developments must electrification is low).
such as grid and transmission be aligned with long-term net zero Floating offshore wind projects are
strategies, including regional Whereas other challenges on the being developed at huge volumes
market integration and green horizon may favour countries – the January 2022 ScotWind
industry development. which host critical minerals or seabed leasing round auctioned
advanced manufacturing capacity off seabed for roughly 15 GW of
Much of the existing energy for the wind supply chain, floating wind capacity, for
infrastructure in place globally was renewables infrastructure is a truly example. But floating projects
built for a fossil fuels-based power global challenge which touches all require significant quayside
system, and is ill-equipped to countries, from EMDEs to storage and assembly,
respond to the modern era. As the advanced economies. That said, necessitating more spacious
energy system becomes more infrastructure planning and facilities, on-land connective
decentralised and digitalised, investment needs will differ for transport links within port areas
there is a crucial need to advanced and developing and deeper-water ports. Several
upgrade and reinforce economies; the latter may require governments have identified port
infrastructure, ensuring its combined investment in upgrades as vital to progressing
resilience to climate change electrification and infrastructure to offshore wind, from Taiwan to New
impacts. improve access to power grids, York State.
especially in countries where
This need is a common thread urbanisation is low and/or where In addition to the necessary

80 GWEC.NET
Case study: How plug & play connectors can reduce

transport and installation costs
Provided by: HARTING
The transportation of long and electric, optic and hydraulic

heavy wind turbine components connections between various
has become a key issue for turbine sub-systems transmit power, data
technology scale-up. While blades and signal continuously and reliably.
and towers extend over 100 metres,
Further modularisation due to
the nacelle alone weighs 125 tonnes
transport limitations leads to
to 800 tonnes for mainstream 3.6
exponential growth of
MW to 15 MW turbines.1 Although
interconnections and the need to
they can be transported easily by
reconnect modules via field
railway or by ships, moving them by
assembly instead of in a factory
road is very challenging. Even
hall. This means manufacturers
specialised road transport
must clearly define the interfaces
companies can only handle loads of
between the modules and reduce
up to 125 tonnes or around 100
the connection complexity.
metres at a realistic freight rate.2
HARTING’s industrial Han®
One solution to tackle this
connectors have been widely used
challenge is to split big
to achieve a range of modularisation
components into smaller modules
in nacelles, blades, towers and
and then reassemble them, either
foundations, as well as transition
before transportation by rail/ship
piece. For instance, modularised
or before final installation on the
aviation lights with an IP69k
wind farms. For example, splitting
HARTING connector of 24 poles
the hub, nacelle housing, drive
substantially reduces the working
train and transformer into four
hours and installation complexity for
modules for reassembly.
the installation engineer on a
A modern wind turbine is ‘an 100-metre high nacelle.
unattended power plant’ with an
Find out more: https://www.harting.
autonomous operating system,
com/DE/en-gb/maerkte/windenergie
where hundreds and thousands of
1. Installation of offshore wind turbines: A technical review, Zhiyu Jiang, Renewable and Sustainable Energy Reviews, 2020.
2. Transportation of Large Wind Components: A review of existing geospatial data, Meghan Mooney and Galen Maclaurin,
NREL, 2016.

volumes of investment, innovation systems are becoming more as in the case of offshore grid despite being among a handful of
is a key factor in enabling the commonplace. integration in the North Sea which nations increasing investment in
integration of large volumes of involves 10 countries in a regional grid infrastructure in recent years.
renewable energy. This innovation Crucially grid investment and cooperation agreement. There were roughly 20 major
must facilitate a modern and infrastructure planning, especially disruptions in 2000, whereas in
flexible grid network, with a of large transmission-scale grid Scaling up infrastructure to meet 2020 the number of major
resilient transmission and infrastructure, must be conducted the needs of the energy transition disruptions surpassed 180, with
distribution network at its core. In with careful stakeholder can enhance the users experiencing longer
some regions the industry is management and good interconnectedness of interruptions of 8 hours on average.
already witnessing much greater communication to citizens. In many communities, which will also
decentralisation and a regions of the world, it will also support increased social and While grid expansion will be
leapfrogging of traditional require international coordination business exchanges. Ultimately, crucial when it comes to
transmission infrastructure. Micro- and shared spatial planning across investment and innovation in the expanding renewable energy, the
grids and self-balancing regional a variety of government agencies, enabling infrastructure for topic was largely overlooked in the
renewables will benefit economies run-up to the COP26 climate
in both the short and long term, conference in Glasgow. More than
References to climate change mitigation options among NDCs of Parties to Paris injecting capital into areas which 80% of countries have indicated
Agreement, as of 2021 need revitalisation, increasing they plan to increase deployment
access to clean power and of renewables, yet only 24% refer
improving balance of trade. to grid improvements in their NDC.
Renewable energy generation 84%
Connecting the dots with grid Countries must catch up on their
Energy efficiency improvement 45% buildout grid planning to meet their energy
2021 was a dark year for grid security and climate goals. In a
Shift to efficient models of transport 32% infrastructure. Power blackouts and Paris-compliant pathway to net
brownouts occurred across the US, zero by 2050, the IEA charts out
Shift to low or zero-carbon fuels 30%
Mexico, Central America, Puerto annual global investment in smart
Electrification 28% Rico, Pakistan, the Philippines and transmission and distribution grids
China, not to mention nearly trebling from current levels
Energy efficiency improvement 28% interconnection mismatches and to $820 billion by 2030. This grid
near-misses affecting nearly every expansion responds to increased
Grid improvement 24% region in the world. power demand and electrification,
in addition to integration of
Energy efficiency improvement in industry 20% Energy Transportation Industry
According to the Wall Street renewables and replacement of
Journal, large and sustained aging infrastructure. By 2040,
outages are occurring with electricity network investment
Sources: Energy Monitor, UNFCCC, 2021. increasing frequency in the US, reaches $1 trillion on an annual

82 GWEC.NET
basis, before falling back to the Offshore Supergrid (2002),

Three proposed sub-regional electricity markets in Southeast Asia
$800 billion level in 2050 as the European Supergrid (2010), Asian
renewables growth rate begins to Supergrid (2011) and China’s
slow down. Global Energy Interconnection China Existing transmission lines
(People’s Republic of)
project (2015). Planned transmission lines
This global challenge is also a
India
global opportunity, offering At COP26, India and the UK
potential for domestic job creation merged their One Sun, One World, Pacific Ocean
and local value added to national One Grid and Green Grids Myanmar
Lao
PDR
economies. Additional investment Initiative, respectively. In the first
in power grids and energy phase, the Indian grid would be Philippines
flexibility measures in line with a connected to the grids of Middle Thailand
1.5°C scenario could generate East, South Asia and Southeast Asia
Cambodia
tens of millions of additional jobs to develop a common grid. The
worldwide, compared to a BAU second phase would expand to
scenario. connect to the power pools in
Africa and the third phase would
Cross-border grid look at transcontinental Malaysia
interconnections and power interconnection with Europe and Malaysia
trading can support local and the rest of the world, aiming for Singapore
international goals such as 2,600 GW of interconnection by Batam
improving grid flexibility and 2050 and estimated power savings Sumatra
resilience, reaching renewable of $249 billion per year. About 83 Indian Ocean
I n d o n e s i a
energy targets and increasing nations have endorsed the initiative East Timor
overall economic development, to date.

particularly for landlocked
countries which lack solar and Improving grid technology Source: IEA, 2019
wind resources or available terrain The energy transition is a
for projects, such as Singapore. transformational enabler of countries. However, achieving an network that can efficiently
sustainable development and all-encompassing smart, flexible integrate the behaviour and
Coordinating cross-border grid climate resilience, with technology and resilient electrical grid with actions of all users in order to
planning and operations can be a at its heart. Improved wind turbine underlying aging transmission and ensure economically efficient,
challenging and complex task, but and solar PV panel technologies, distribution infrastructure will sustainable power systems with
highly beneficial in the new era of and their rapid cost reductions, require technology innovations at a low losses and high levels of
renewable energy growth. Some of already provide the foundation pace never seen before. quality and security of supply and
the high-profile international grid needed for the next era of energy safety. This may employ innovative
visions include the Friends of the transition growth in many A smart grid as an electricity products and services, together

(EGAT), the Metropolitan ramping and stop-start flexibility to

Duck curve” net load profile in California on 31 March, 2012-2020
Electricity Authority (MEA) and the adapt output levels to real-time
Provincial Electricity Authority grid conditions. CAISO’s original
30,000
(PEA), have been conducting prediction even underestimated
26,000
Ramp need
several pilot projects. EGAT is the degree of the midday dip,
~13,000MW emphasizing grid modernisation, according to analysis, though the
24,000 in three hours big data, grid connectivity and operator has largely been able to
22,000 renewable energy forecasting, maintain a stable grid.
while MEA and PEA are focusing
20,000 2012 (actual)
Megawatts
on distribution system Since then, California has

18,000 2013 (actual) management, smart metering and committed to reach net zero by
2014 demand-side response. This year, 2045, while its 2030 Climate
16,000 2015 Potential over Thailand kicks off the ultimate Commitment targets at least half of
2016 generation
14,000 2018 2017 stage to 2026, aiming to enable its electricity supply to come from
2019 nationwide automated electricity renewable energy sources by
12,000 2020
networks, large renewable energy 2030. With these deadlines around
10,000 resource integration, balance of the corner, California’s grid
energy production and utilisation operator is implementing a
0 and intelligent two-way power 10-year grid transmission plan with
12am 3am 6am 9am 12pm 3pm 6pm 9pm supply of electric vehicles. a view to boost grid flexibility and
Source: CAISO, 2020. The forecast was made in 2013. Thailand also recently announced resilience, and prevent curtailment
a $7.1 billion 10-year programme or over-generation. The CAISO
to upgrade the national plan includes 23 projects at a cost
with intelligent monitoring, control, includes the capability to transmission network. of $2.9 billion, based on a
communication and self-healing anticipate, absorb, adapt to and projection that around 2.7 GW of
technologies. Grid flexibility rapidly recover from such events. As far back as 2013, the California new renewable power generation
expresses the extent to which a Independent System Operator (including offshore wind) will be
power system can modify Thailand is a good example of a (CAISO) forecast that increasing integrated annually. In addition to
electricity production or nationwide effort to implement a deployment of solar – which mid-term and long-term grid
consumption in response to smart grid. In 2015, the Thai generates most during midday reliability projects which can
variability, expected or otherwise, Government launched a $5.9 when the sun was strongest – balance and stabilise the system,
and maintain reliable supply in the billion 20-year Smart Grid Master would lead to a dip in net load or other flexibility measures are
face of rapid and large imbalances, Plan to 2036 in support of the conventional generation, followed being implemented in demand-
whatever the cause. Last, grid national goal to reduce GHG by a steep ramp-up of system side response, interstate power
resilience is the ability to withstand emissions by 20% from BAU levels demand into the evening hours. flow and storage.
and reduce the magnitude and by 2030. Since then, the Electricity This demand profile means that
duration of disruptive events, which Generating Authority of Thailand CAISO would need resources with In Japan, the city of Higashi-

84 GWEC.NET
Matsushima rebuilt its energy decentralised, decarbonised and era. Non-fungible tokens (NFTs)
infrastructure following the wake of digitised, with far greater guaranteeing the units of power
Tohoku tsunami in 2011. Its consumer interaction than ever have been produced directly from
restructuring involved microgrids before. In the past, consumer renewables, and this is giving rise
and decentralised power systems interaction with the grid has been to new business models and ways
to ensure that its localised grid very limited and power has been of crowdsourcing funds for
could be more resilient to the provided without differentiation. renewable projects.
eventuality of a natural disaster. However, rapid digitisation in our
Other cities in Japan are now everyday lives, combined with To maximise the opportunities
following suit, while the Cabinet greater concern about the climate brought about by these trends and
Office increased funding to the crisis and falling costs, has seen technologies, a highly
National Resilience Programme by consumers starting to play a more decentralised and flexible
around 24% in 2017. prominent role in power demand approach to transmission, and
and supply. crucially, distribution grid
In the offshore wind sector, high- management will be needed. In
voltage direct current (HVDC) In many regions, we are now the modern grid of the future,
technology is maturing. There have seeing direct consumer interaction interaction will go both ways in a
been many lessons learned and between consumers and the grid dialogue between supply and
technology advancements since via smart appliances, electric demand. For the energy transition
BorWin1, the first HVDC grid vehicles and home heating, to truly benefit from these ever-larger shares of renewable
connection from an offshore wind cooling and storage systems. At innovations, and be fair and energy. Otherwise, availability of
farm, to Sunrise Wind, the first the same time, commercial and equitable, a range of products and suitable grid connections, capacity
offshore wind project in the US to industrial (C&I) consumers of services will need to be integrated and transmission lines can form a
use HVDC transmission, and more power are increasingly providing into grid systems, along with significant bottleneck to the growth
recently Dogger Bank in the UK, demand turn down services. We robust regulation and measures to of new utility-scale wind and solar
announcing the world’s first also see a much greater degree of protect physical and cybersecurity. projects.
unmanned HVDC offshore decentralised battery storage This should include consumer
substation, slashing topside weight active on the distribution grid. tariffs that incentivise demand- A national grid infrastructure
by 70%. However, a key shifting and behaviour change, development plan of at least 10-15
technology challenge remains in In some regions there has been a such as time-of-use tariffs. years ahead, with broad
ensuring interoperability in proud history of community and stakeholder buy-in, will be needed
complex HVDC grid structures, consumer involvement in Planning for a to align with renewable energy
across multi-terminal, multi-vendor renewable projects. Blockchain renewables-based grid development targets and unlock
HVDC systems. technology is now making it Policymakers must urgently regulatory bottlenecks. This degree
possible for consumers to directly mobilise greater public and of long-term forward-planning will
Future grid users engage with how their power is private investment in secure, smart require a huge effort of coordination
The future grid will be far more produced in way fit for the digital and flexible grids which enable across different stakeholders,

It will also require greater human, also incorporate greater resource

Investment in electricity networks by region and segment
economic and digital resource to provided to consenting authorities
conduct comprehensive grid and to accelerate approval decisions
transmission planning, including for grid projects, which are often
350 350 identification of areas of need for beset with delays. In the EU, for
prioritisation, managing instance, around 30% of grid
300 300
distributed system elements, projects designated to be in the
250 250 running long-term scenarios and common interest are delayed due
Billion USD (2019)
boosting grid security. In parallel, to permitting issues.

200 200 the public and private sectors
150 150 should maintain active dialogues Scaling up infrastructure
and R&D initiatives to advance investment for the transition
100 100 digitalisation and scalability/cost of Infrastructure needs in a net zero
50 50 technologies which can optimise scenario go beyond electricity
grid and transmission systems. grids. They incorporate the mass
dissemination of charging points
2016
2017
2018
2019
2020
2021e
2016
2017
2018
2019
2020
2021e
A more streamlined policy and for electric vehicles, ports and
regulatory framework must be logistic highways, infrastructure for
United States China India Distribution Transmission implemented to motivate regional green hydrogen transport and
Europe Rest of the world transmission organisations (RTOs) marginal investment in carbon
and independent system operators capture and storage infrastructure.
(ISOs) to perform integrated Nonetheless, grids comprise the
Source: World Energy Investment 2021, IEA, 2021. planning at regional and lion’s share of infrastructure
multinational level, so power grid investment for the energy
including ministries of energy and investments can be de-risked and transition.
economy, in addition to system accelerated.
operators, regulators and utilities. A great deal more volume of
Finally, as with renewable energy spending is needed, particularly
While this work needs to be projects themselves, an efficient as global investment in grid
steered by public authorities, it will and streamlined permitting expansion in China, India and
require early and consistent process is urgently needed to many other EMDEs declined from
engagement with sub-national and enable grid and transmission 2016 to 2020, leading to a 25%
local government authorities and buildout. This could include overall drop globally during this
host communities to align priorities designation of priority corridors period. This occurred in China,
for transmission deployment and for electricity networks, based on for example, as rural power grid
communicate the benefits of an forecast power needs and buildout targets were met and the
expanded grid. renewables deployment. It should focus shifted to less capital-

86 GWEC.NET
intensive transmission in distribution grid investments

reinforcement. and modernisation by 2030, when Major social and economic benefits from power grid investment in Europe
half of the EU’s grid will be more
Grid investment rebounded in than 40 years old. The investment
2021, led by increased spending would be paid for several times
in China and Europe. However, over by the savings, which include SUSTAINABILITY ECONOMY
€17-22bn annual CO2 savings €30-35bn of annual revenues for EU companies
the estimated figures for global €175 billion ($193 billion) annual €40-140bn annual savings in health (e.g. manufacturers & service providers)
58,000 premature deaths avoided 440-620k quality jobs per year related to DSO grids
grid spending last year are still savings in fuel imports and €27-37 460 Mtoe less of final energy €30-35bn annual sales in equipment (~90%
consumption by 2030, achieving of total investment
below $300 billion, and less than billion ($30-41 billion) in long- 32.5% ofo efficiency target
what was spent in 2016 term electricity cost reduction as

worldwide. renewable penetration increases. €34-39bn
of annual
Grid investment also shepherds in DSO investments
in power grids
Grid investment needs to scale up significant socioeconomic
in every region of the world. To benefits, including job creation for
COMPETITIVENESS CUSTOMER EMPOWERMENT
reach a pathway well below 2°C by grid enhancements and capital Territorial cohesion and promotion ~40GW self-consumption capacity added
of local economies 50-70m EVs with smart charging
2050, IRENA has called for at least investment in related economic €28-37bn average electricity cost New services: storage, electric heating,
$22 billion in annual investment in sectors, such as construction reduction (thanks to 50-65% lower RES
than fossil generation cost)
smart appliances, aggregators
power grids and system flexibility and IT. +€175bn annual savings in fuel imports
~0.2-0.3% of current EU GDP in annual
in Southeast Asia, $105 billion investments in power distribution grids
annually in East Asia, $52 billion Enhanced or new mechanisms to
annually in the rest of Asia, $4 mobilise investment in grid and
billion annually in Oceania, $15 transmission buildout is required,
billion annually in Latin America such as leveraging investment Source: Connecting the dots: Distribution grid investment to power the energy transition, Eurelectric, E.DSO and Monitor Deloitte, 2021. Note:
and the Caribbean, $23 billion under a smart/green economy DSO stands for distribution system operator.
annually in the MENA region, $65 scheme, federal grant

billion annually in North America programmes and loan guarantee for climate finance, and transmission tenders from 1998 to
and $18 billion annually in sub- programmes. In EMDEs, incorporate grid considerations 2017, while Brazil organised 38
Saharan Africa. concessional loans by multilaterals into investment criteria. tenders from 1999 to 2015. India,
may be appropriate to finance Canada, the US and Australia
The investment needs are grid transformation and buildout, EMDEs may also seek out have also leveraged tenders to
significant, but studies show that especially blended with climate independent power transmission attract private investment in
countries would be more than finance under mitigation and tenders to mobilise private transmission. Private capital may
recompensed by the savings in adaptation goals. As highlighted at financing to build, operate and have an increasingly important
fossil fuel imports and subsidies. COP26, this would require a maintain a transmission line and/ role in distribution projects in
A 2021 study by Eurelectric and model to estimate the emissions or substation. Such tenders are EMDEs as well, such as through
E.DSO found that the EU requires reduction potential of grid common in Latin America – for preferential loans to state-owned
€375-425 billion ($413-468 billion) investments to make them eligible example, Peru has organised 18 distribution entities.

Holistic planning for future l Ensure national development

system infrastructure plans for grid infrastructure are
The increased integration of mature in place, looking at least 10-15
renewable energy sources on a years ahead, in alignment with
smart and flexible grid will be vital renewable energy supply
to maintaining energy security and planning, fossil fuel phaseout
economic productivity, as the schemes and sector
transition progresses. This includes electrification needs.
integration of balancing
technologies like hybrid projects, as l Involve local communities
well as batteries and green fuels for hosting transmission and
storage at shorter and longer distribution infrastructure to
durations (see A changing ensure that grid enhancement
paradigm and the demise of and modernisation is seen in the
baseload). common interest, and
communicate the socioeconomic
Policy, planning, regulatory benefits brought by
guidelines and investment in grid infrastructure projects.
and system infrastructure must
accelerate in parallel with l Mobilise public and private
renewable energy deployment. finance schemes for grid and
Otherwise, we leave huge volumes transmission investments,
of clean electricity without a route including concessional loans,
to market or access to grid private sector transmission
connection – prolonging our tenders and refinement of
reliance on fossil fuels, and further eligibility criteria for climate
exposing us to the risks of a finance.
delayed and disorderly energy
transition. l Dedicate further human and
digital resource to the permitting
To achieve greater coordination and consenting authorities for
and impact in grid and grid and transmission
infrastructure planning, infrastructure projects, as well as
policymakers, system operators, to the research and innovation
regulators, utilities, the industry community which can continue
and the wider innovation advancing the pursuit of smart,
community should: modern and flexible grids.
GWEC.NET
PART SIX: WORKFORCE
Chapter Sponsor
Part Six: Workforce
Part Six: Workforce

As of 2020, 12 million jobs were Wind energy workforce requirements
attributed to the renewable energy
Renewable energy employs Regarding the skills required for offshore sector).
sector, of which 1.25 million direct
people across all trades and the deployment of wind energy
jobs were recorded in the wind Highly qualified non-STEM
levels across the full value chain, facilities, the analysis show that
industry.1 Under a net zero by 2050 professionals (such as lawyers,
from project planning to over 60% of the workforce in the
scenario, the renewable energy logistics experts, marketing
decommissioning. IRENA’s onshore wind industry, and over
workforce could increase to 43 professionals or experts in
analysis of the human resource half of the workforce of the
million jobs in the global economy, regulation and standardisation)
requirements for the onshore and offshore wind sector, requires
including jobs required for the account for roughly 5% and 20%
offshore wind industry shows the minimal formal training.
power grid and flexibility services.2 respectively, while administrative
opportunities for employment in Individuals with degrees in fields
personnel make up the smallest
50MW onshore and 500 MW such as science, technology,
Jobs in the wind energy sector will share (4 and 8%, respectively).
fixed-bottom offshore facilities are engineering and mathematics
undoubtedly increase under this
for over 144 thousand person- (STEM) are needed in smaller
scenario. IRENA estimates that as 4. Leveraging local capacity for onshore wind, IRENA,
days and around 2.1 million numbers (around 28% for
wind energy installations grow 2017; Leveraging local capacity for offshore wind,
person-days, respectively.4 onshore wind, and 21% for IRENA, 2018.
10-fold by 2050 to more than 8,000
GW of wind energy capacity
worldwide, the wind energy sector Human resources and occupational requirements for 50 MW onshore and 500 MW
could accommodate 5.5 million fixed-bottom offshore wind projects
jobs. The share of wind energy jobs Project Procurement Installation and Operations Human Resources
Transport Decommissiong Requirements 5% 4%
in the global renewables workforce planning and manufacturing grid connection and maintenance
may increase, as wind becomes a Onshore Wind

Onshore Wind 28%
predominant electricity source and (for 50MW)
the value chain of the industry 144 420

expands to include newer 2% 17% 1% 30% 43% 7%
person-days 63%
technologies and domains, such as Offshore Wind

8%
floating offshore wind. Offshore Wind 19%

(for 500MW)
This scale up not only requires

2.1mio 52%
person-days
1% 59% 11% 24% 5%
unprecedented public resources 21%
Lower certification STEM professionals

1. Renewable Energy and Jobs – Annual Review 2021, Non-STEM professionals Administrative
IRENA, 2021.
Sources: Leveraging local capacity for onshore wind, IRENA, 2017; Leveraging local capacity for offshore wind, IRENA, 2018.
2. World Energy Transitions Outlook: 1.5°C Pathway,
IRENA, 2021.

90 GWEC.NET
Part Six: Workforce
Case study: Attracting talent into the wind Industry

Provided by: NES Fircroft
The energy sector is in the middle salaries to be lower. However, this expanded to 20 GW by 2025, it will
of a major transformation. is not necessarily the case. More be home to 7,000 turbines and
Governments around the globe than 75% of respondents who have produce enough energy to power
have set goals to reach net zero by transitioned said their salary was a small country.
2050, meaning companies need to higher or about the same.
Myth 5: There just aren’t as many
ramp up their renewable energy
Myth 2: Skills are not transferable. job opportunities. There will be an
strategies and attract specialist
71% of respondents said they abundance of new and exciting
talent to get across the low-carbon
needed further training to opportunities as companies try to
future finish line.
effectively transition skills. meet their net zero goals. NES
Staffing specialist NES Fircroft However, many skills are Fircroft is currently recruiting
recently released an “Energy transferable, and the experience across the globe on wind projects
Transition Outlook” report which engineers can bring from from California to the UK, and has
offers unique insights into the traditional energy projects will be seen its renewables division grow
current temperature of the talent vital to the wind sector. exponentially to cope with the
landscape and how organisations demand for talent.
Myth 3: Newer industries may not
should shape their recruitment
offer the same stability. Big Oil and The results from the Energy
strategy to attract engineers to the
Gas have invested in renewable Transition Outlook report show that
renewables sector.
energy and wind energy is now many candidates are considering
Myths around transitioning from “front and centre.” Projects that will working in the renewables sector,
traditional energy to the wind move the needle in sustainability with wind energy at the forefront.
power industry can be ground-breaking and Alignment with personal values is a
disruptive, but they are surely here key driver for many, but they still
The results from this report show that
to stay. need reassurance to make the
many candidates feel positive about
the energy transition and the Myth 4: There are more interesting transition. Organisations should
exciting projects it offers, but there large projects in traditional sectors. bear this in mind when they are
are some common misconceptions Ambitious wind projects will considering their future
surrounding moving from traditional provide several new jobs tapping recruitment strategies.
energy to a renewables role. into the latest and greatest Find out more: https://www.
technological advances. A good nesfircroft.com/energy-transition-
Myth 1: The salaries are not
example is the soon-to-be world’s outlook-report
competitive. Many workers stated
largest wind farm, Gansu Wind
they did not wish to make the
Farm in western China; once
move because they perceived

Part Six: Workforce
dedicated to mobilising a growing

workforce for the wind and Case Study: Just transition and building Scotland’s supply chain
renewables sectors, but also a Provided by: SSE Renewables
buildout of skills and an SSE Renewables is investing in
appropriate training infrastructure, Nigg Offshore Wind (NOW), a new
as well as dissemination of the state-of-the-art offshore wind
industry’s health and safety turbine tower factory in the
standards in regions where wind Scottish Highlands that will help
energy is at an earlier stage. build the next generation of
Studies show that one of the top offshore wind farms in Scotland
challenges for the renewable and beyond – creating hundreds of
energy transition is the difficulty of full-time green jobs.
recruiting, training and retaining
skilled workers with aligned NOW is the most significant
skillsets.3 localisation of offshore wind supply
chain manufacturing ever seen in
This means fostering diversity and Scotland, boosting Scotland’s
inclusivity as the workforce renewable energy supply chain
expands in volume and geography. and helping reskill local workers.
The turbine factory will be built by
Set for such large growth during the Global Energy Group and Haizea
energy transition, the renewables Wind Group at the Port of Nigg at a lives in the region and providing construction and development
sector is an ideal candidate to total investment cost of over £110 real opportunities for workers to projects of scale, such as Dogger
accommodate and absorb the million ($143.5 million), backed by transition from oil and gas to Bank and the super-sized Berwick
displacement of workers from fossil £15 million ($19.6 million) in debt renewables. This is an integral part Bank, can create a stronger, greener
fuels industries and carbon- funding from SSE Renewables. of the just transition in Scotland, in and more successful industry.
intensive sectors. There will be a
Once operational in 2023, NOW support of SSE’s Just Transition
need for public-private planning This collaboration can deliver a
will employ 400 people on a strategy and drive for net zero.
and coordination, including support sustainable Scottish and UK supply
for workers who need re- full-time direct basis, The UK needs to be a world leader chain that creates jobs, reskills our
certification in the transition phase. manufacturing up to 135 towers in offshore wind development, and workforce for a low carbon future
each year for the next generation to support this SSE Renewables and maximises the economic
Jobs generated from wind projects of fixed and floating offshore wind intends to fulfil its role as a strategic benefits, both regionally and
span the full value chain of the turbines. Its activities will support backer for the facility by placing nationally.
another 1,800 indirect jobs in the orders to meet its growing offshore
Scottish and UK supply chain Find out more: https://www.
3. Moving organizational energy use toward 100% wind pipeline in the future. A
– helping transform thousands of sserenewables.com/
renewables – aspiration or destination, Deloitte, 2019 pipeline of offshore wind

92 GWEC.NET
Part Six: Workforce
sector, encompassing a variety of Highly qualified non STEM phenomenon. There are many
technical, professional and hard/ professionals (such as lawyers, examples of national, regional and
soft skills. From project planning to logistics experts, marketing global efforts to drive a just
manufacturing to operations and professionals or experts in transition adjacent to the energy
maintenance (O&M), the wind regulation and standardisation) transition, including recent
sector provides a range of jobs account for roughly 5% and 20% reporting by the International
distributed along a diverse value respectively, while administrative Labour Organization.6 IRENA’s
chain. personnel make up the smallest Collaborative Framework on Just
share (4 and 8 %, respectively). and Inclusive Energy Transition, its
Renewable energy employs people Coalition for Action Working Group
across all trades and levels across Wind energy at the heart of a just on Sustainable Energy Jobs and
the full value chain, from project and inclusive transition the IEA’s Global Commission on
planning to decommissioning. There is an expanding body of People-Centred Clean Energy
IRENA’s analysis of the human evidence which shows that socially were all established in 2021.
resource requirements for the and environmentally responsible
onshore and offshore wind industry economic growth can reinforce A just transition is characterised by
shows the opportunities for workforce resilience, by its concern with the socioeconomic
employment in 50MW onshore and encouraging workers to adapt to welfare of stakeholders involved in lower than the 32% of women in
500 MW fixed-bottom offshore the low-carbon economy of the the energy transition, foremost the wider renewables workforce.8
facilities are for over 144 thousand future.5 The labour disruption and those working in the energy
person-days and around 2.1 million economic dislocation brought by sector.7 Over the last few years, the The definition of the just transition
person-days, respectively. the transition to clean energy could concept has evolved and is often is seemingly broad, as
create hardships if not managed presented as the just and inclusive socioeconomic welfare covers a
Regarding the skills required for well. In addition, these hardships transition, as increasing wide range of issues. Through a
the deployment of wind energy could translate into social tensions importance is being placed on social lens, this includes the
facilities, the analysis show that or the formation of marginalised inclusivity of system provision of human rights, worker
over 60% of the workforce in the communities – factors which could transformation. There are many safety and the inclusion of minority,
onshore wind industry, and over undermine public acceptance of dimensions of inclusivity, but from marginalised or vulnerable
half of the workforce of the offshore the transition and thus interrupt the the gender lens, the wind industry categories of workers in some
wind sector, requires minimal rise of renewable energy and has a long way to go with women countries including women and
formal training. Individuals with displacement of fossil fuels. representing only 21% of the disabled people. Through an
degrees in fields such as science, global workforce – even lower than economic lens, this includes
technology, engineering and Ensuring a just transition is the legacy energy sector, and far geographic displacement of
mathematics (STEM) are needed therefore essential to sustaining the
in smaller numbers (around 28% growth of the wind industry. The 5. https://gwec.net/green-recovery-policy-recommendations/#people
for onshore wind, and 21% for concept of a just transition is 6. https://www.ilo.org/global/topics/green-jobs/publications/WCMS_432859
7. Glasgow Climate Pact, UNFCCC, 2021
offshore sector). gaining ground, but is not a new 8. Wine energy: A gender perspective, IRENA, 2020; Renewable energy: A gender perspective, IRENA, 2019.

Part Six: Workforce
Skills transferability from offshore oil and gas industry to offshore renewables those in another. For instance, in
Brazil under the Just Transition Law,
Operations
subsidies for coal plants are
permitted until 2040 to ease the
Not enough data on skills overlap 18% Business Support (Finance, HR, IT)
impacts of the shift to renewable
Production Management
Good skills overlap 28% energy on directly impacted
Little or no Construction and installation
stakeholders – although ongoing
skills overlap 14% support to coal plants could
Well intervention prolong environmental, and
Well Completions ultimately social, harm.9 In South
Well Construction Marine/Naval Korea, the government’s Green
Well Appraisal New Deal will invest $25 billion to
Geoscience Facilities Management
(inclu. Catering)
create 387,000 jobs in the green
Reservoir/
Petroleum Engineering economy, and encourage
Electrical
Drilling
Cost Engineering/Estimating
renewable energy growth.10 Both
Process Engineering
(Chemical)
approaches aim to protect the
Piping Maintenance
welfare of the workforce affected
Environmental Sciences by the energy transition.
Data Management
Warehousing & Preservation
The just and inclusive energy
Partial skills overlap 4% Mechanical
transition is also a reflection of
Hydraulic
historic issues of inequity linked
Process Saftey/Technical Safety to economic transformation.
Planning & Scheduling Business Development/Commercial Communities which have been
Commissioning marginalised or party to resource
Subsea/Pipelines
Contracts & Procurement colonialism in the past may
Logistics
Some skills overlap 36% harbour sentiments of mistrust
QA/QC towards the harbingers of
Instrumentation,
Control & Automation HSSE economic growth. A harmonious
transition must respond to these
Source: Sea Change: Climate Emergency, Jobs and Managing the Phase-Out of UK Oil and Gas Extraction, Platform, Oil Change International and Friends of the Earth Scotland, 2019.
concerns with participatory
dialogue and clear policies that are
economic activity, jobs losses and fuels, the transition may in the A just transition must also be highly appropriate for such communities.
security and costs of re-training. interim also generate contextualised to the conditions of
Although the energy transition is discontinuities of a temporal, the affected locality or community. 9. https://www.reuters.com/markets/deals/brazil-extends-
coal-use-2040-under-new-just-transition-law-2022-01-06/
likely to generate far more new spatial, occupational and sectoral As a result, frameworks in one 10. https://www.iea.org/policies/11514-korean-new-deal-
jobs then the number lost in fossil nature. country may look very different to digital-new-deal-green-new-deal-and-stronger-safety-net

94 GWEC.NET
Part Six: Workforce
Uncertainty can be mitigated l Increasedinvestment in human resources, IT), business

through targeted education and community outreach, recruitment, development, construction,
training programmes, investment training and reskilling installation, marine/naval services,
schemes, industrial upgrades and programmes to close the skills facilities management,
promotion of public-private gap and support job creation maintenance, mechanical
partnerships and joint ventures to where required. Investment could engineering, subsea/pipeline
integrate workers into the green also be required to provide construction and health, safety,
economy. interim social support payments security and environment (HSSE)
where needed to the affected expertise.
Shifting workers from sunset workforce.
industries to wind The skills and expertise of
Workers from carbon-intensive l Targeted education and skills workers who have designed,
industries can be part of the transfer in the form of tailored managed, constructed, installed
solution in addressing the skills reskilling and training and maintained large-scale and
gap required to drive the energy programmes addresses the skills complex offshore oil and gas
transition. Skills and training gap that exists as a barrier to projects are highly valuable for the
obtained by workers in coal, oil entry to the wind industry. This offshore wind sector, which Steering this workforce transition
and gas-related sectors can be includes implementing practices deploys projects in similarly harsh requires policymakers to make
repurposed and deployed to and standards which recognise marine environments. This offers strategic choices on how existing
renewable energy sectors at a the relevance of transferable job transferability potential up and capabilities and workers can be
wide variety of points along the skills and existing qualifications down the diverse offshore wind leveraged for high-growth areas.
value chain. A shift to a renewables possessed by those in carbon- value chain, from steel Where possible, reskilling offshore
workforce then increases the need intensive sectors, minimising the manufacturing for foundations, oil and gas workers should be
for labour mobility, as opposed to friction for a worker transition. substations and installation leveraged to encourage
merely representing the loss of vessels, sub-sea cables to competitiveness. Surveys have
prevailing jobs in carbon-intensive For instance, a 2019 assessment of evacuate electricity and vessels reflected that workers are open to
sectors. There are three skills transferability from the UK for transport of equipment and career transitions as well – a 2020
overarching factors to this shift: offshore oil and gas industry to the workers.12 Skills such as working survey among UK offshore oil and
offshore renewables industry offshore at heights or in deep gas workers found that more than
l Social
dialogue enables found that the disciplines covering water, HSSE training, offshore 80% would consider shifting to
workers, communities, nearly 70% of full-time equivalent standards knowledge and work outside the sector, and more
governments and a variety of (FTE) jobs in the offshore oil and engineering experience are all than half preferred to shift to
stakeholders to understand the gas industry had partial to good highly transferable. offshore wind.13
impacts of the energy transition overlap with those required in
11. An FTE job is defined as a full-time job for one person in one calendar year. See: https://priceofoil.org/content/
and creates a platform for offshore renewables.11 These uploads/2019/05/SeaChange-final-r3.pdf
strategic and inclusive include good skills overlap in the 12. http://gwec.net/offshore-wind/; https://www.nyserda.ny.gov/-/media/Files/Publications/Research/Biomass-Solar-Wind/
Master-Plan/US-job-creation-in-offshore-wind.pdf
management of these impacts. areas of business support (finance, 13. https://foe.scot/ wp-content/uploads/2020/09/Oil-Gas- Workers-Report-Final.pdf

Part Six: Workforce
Case study: Closing the skills gap in heavy fabrication as the wind
industry expands
Provided by: Lincoln Electric
As the global wind industry expands its reinforcement and visual acuity are critical to
central role in meeting the world’s energy helping highly skilled welding workers
transition targets by 2050, one point of develop fine motor skills with tremendous
increasing importance is how the global accuracy.
supply chain will adapt to the declining trend
A recent study performed at WSU Tech in
in available highly skilled trade workforce.
Kansas demonstrated that time to develop
This is particularly acute in the area of welders
proper welding skills can be significantly
needed for metal fabrication of onshore and
reduced using this process. The study
offshore wind projects.
confirms that when programmes like virtual
In virtually every key region of the world, a reality training (VRTEX°) are introduced to
shortage of skilled trade workers in welding industry, the traditional learning curve is
and metal fabrication has been an ongoing flipped. Students start to develop real-world
trend for more than a decade. To combat this, skills immediately, and the study “concluded
new ways of engaging and closing the skills that those taught with the hybrid instruction
gap will only be possible with the help of methodology outperform those taught with
individual companies, workforce development only a live machine.”
schools, colleges, unions and private entities
While this method has been successful, more
to meet the industry’s needs.
work continues in the context of the rapidly
Lincoln Electric has been investing in new expanding offshore wind developments
ways to reduce the training time necessary to around the world. A higher volume of skilled
provide highly skilled and effective new welders will be required to fabricate critical
welders and welding operators to support offshore components including towers and
industries like wind. Two areas that have offshore foundations. To reach the 2050
achieved success are the Lincoln Electric installation targets called for in a net zero
“Train the Trainer” core curriculum and the pathway, the industry must continue innovating
development and integration of virtual reality and investing in a workforce with the skills
welder training tools (VRTEX®). Together, needed for the global supply chain.
these two pieces combine classroom time and
Find out more: https://www.lincolnelectric.
practical hands-on education with a virtual
com/en/Education/Training-Programs
reality experience. In the virtual training
world, immediate feedback, positive

96 GWEC.NET
Part Six: Workforce
The coal sector workforce is understanding and collaboration industry for offshore wind, among Case study: Ardersier Port
generally more challenging to between stakeholders. Dialogue others.
transition directly into the wind has provided a forum to foster
in Scotland
sector, although there is scope to social consensus on the 2. Promote public-private The Ardersier Port once employed roughly
move between sub-sectors of the management of South Africa’s collaboration to generate local 4,500 oil and gas workers at one the largest
energy industry, such as legal or energy transition. value creation: As a leading oil rigs in the world, spanning over 400
financial services.13 Along the energy solution, the wind industry acres off the Scottish coast of Inverness.
value chain there will be other In revitalising and repurposing a should work with governments to Now undergoing a multi-million pound
technical areas which could workforce to meet the demands facilitate local industrial activity transformation to become Europe’s first fully
benefit from someone with prior of wind energy growth, and the creation of decent jobs for circular energy facility, the port’s transition
experience in the energy sector. policymakers must take workers in areas where fossil exemplifies how workers from the oil and
Targeted training and recruitment responsibility for creating fuels-based activity once thrived. gas industries can be mobilised to join the
programmes which proactively transparent guidance and The public sector must work offshore wind and clean energy workforce
address areas where labour proactive frameworks to support together with the industry to at the same site as their previous
disruption is expected will be this process. In turn, the wind identify viable projects and employment. The value chain is anticipated
important for protecting the industry must support the shaping collectively support investment in to create 29,000 jobs by 2050 as a result of
welfare of displaced workers from and implementation of these training workers and repurposing reviving the port.
the coal industry. frameworks. Some of the good sites. This includes the creation of a
practices in a just and inclusive viable local supply chain, with This is a particularly positive example as
For instance, as South Africa has an transition to wind include: schemes to incubate businesses geographic displacement is often a concern
overwhelming dependency on and local capabilities for the wind for workers whose opportunities may be
coal, coal phaseout will have a 1. Encourage social dialogue and sector, such as favourable loans constrained to specific localities. A shift of
significant impact across the increased stakeholder and promotion of industrial settled workers into alternative employment
economy and communities. As a engagement: Creating space for clusters. can feel more secure when these
result, in 2013 the National social dialogue and increasing opportunities are local.
Planning Commission dialogue stakeholder engagement helps to 3. Tailored retraining and
process already included a just support social cohesion and a reskilling pathways for workers
transition as part of the National common understanding of the from carbon-intensive industries:
Development Plan. Social dialogue challenges and opportunities Training and assistance to workers,
is widely acknowledged as key to ahead. Stakeholders include including with re-certification for
this process, reducing displaced workers, residents of different wind industry
disinformation about the nature host communities of local projects occupations, could be designed
and consequences of the transition and members of affected under public-private collaboration
and creating a platform for communities such as the fishing to identify communities of need
14. Skills and Occupational Needs in Renewable Energy, ILO, 2011.

15. “National Planning Commission - Department of Planning, Monitoring, and Evaluation: Republic of South Africa”, Social Partner Dialogue for a Just Transition. 2019.

Part Six: Workforce
In revitalising and repurposing a workforce to meet the demands

of wind energy growth, policymakers must take responsibility
for creating transparent guidance and proactive frameworks to
support this process. In turn, the wind industry must support the
shaping and implementation of these frameworks.
Part Six: Workforce
Case study: Scaling up training infrastructure to meet workforce needs

A few months on from COP26, the establishing major new capacity off completely new workforce. encountered in wind,
wind industry’s future is on an the back of industry efforts to where training for
The US and China represent both
upward curve. For those communicate the value of safety working at heights
cases. There is growing
concerned with workforce standards. By the end of 2021, more is one of many
acceptance in these markets
matters, systems of best practice than 21,000 people in these three prerequisites.
among existing (largely onshore)
are top of mind. countries had an industry standard
workforces and employers of Dialogue with
safety training. In 2021, several new
As a non-profit owned by the safety certification on a resume. policymakers,
countries established GWO-
world’s largest turbine regulators and
certified training facilities for the first A more common global challenge
manufacturers and owner employers is a
time, including Croatia, Ukraine, is the expansion of training
operators, Global Wind priority for meeting
Egypt, Colombia and Russia, infrastructure to keep pace with
Organisation’s (GWO) mission is this challenge. There
reflecting the heightened demand the pipeline of growth in the next
to ensure the adoption of best are also investments to be
for wind workers in these markets. five to ten years. GWEC forecasts
practice in the form of made. In the US, millions in
upwards of 500GW of new wind
standardised safety training The value to employers is clear – federal and state funding have
energy capacity for installation up
worldwide. they define the standards and been allocated to workforce
to and beyond 2025. The
ensure training is appropriate to development programmes on the
The growth in availability of the workforce demand to meet that
the risks and hazards in the Eastern Seaboard. In some cases,
quality-assured GWO standard challenge currently outstrips the
workplace. They can rely on a this has resulted in impressive
wind industry safety and technical availability of training.
market of quality-assured new training facilities for an
training has taken huge leaps
providers to deliver. For instance, Japan and Korea anticipated workforce. GWO looks
forward during recent years.
currently possess around 5-10% of forward to working with parties
Between 2012 and 2021, a But what if the training
the required GWO standard across the world to explain the
workforce of 122,000 technicians infrastructure that is needed is
training capacity to meet their safety and business cases for
carrying out various roles in not available? While the
wind installation targets. As adopting global training
construction, installation, message about health and safety
advanced industrial economies, standards, and supports the
operations and maintenance of standards is getting through, it
they have alternatives available, efforts of GWEC in
wind turbines onshore and must be communicated with due
such as safety training for the recommending these standards
offshore has been certified to a attention to differing cultural and
manufacturing, construction, oil where the delta between capacity
global standard through training. market dynamics. In some
and gas, telecommunications or and need is greatest.
cases, establishing a global
The Americas, Africa and Asia- maritime sectors, which could be
standard means encouraging With input from: Ralph Savage,
Pacific regions saw their GWO- adapted to meet the needs of a
existing workers to get into the Director, Global Development &
trained workforces increase by 50% wind turbine technician. But this
scheme. In others, infrastructure Stakeholder Relations, Global
in 2021, with markets such as Brazil, will likely be suboptimal owing to
is needed to accommodate a Wind Organisation (GWO)
the United States and India the domain-specific risks

Part Six: Workforce
and match these with anticipated The robustness and pace of the
workforce gaps. This should wind industry’s growth will depend
include a scheme of recognition of on the people who deliver it.
the relevant existing skills and Greater public and private
qualifications of workers in carbon- collaboration on workforce
intensive industries, to transfer planning for large-scale renewable
them more efficiently into the wind energy deployment and a green
sector. The public sector should economy should be an early policy
clearly support the career priority.
progression pathways for fossil
fuels workers into renewable Otherwise, a widening gap
energy to encourage labour between skilled workers and wind
mobility and upskilling. capacity targets could delay
countries from meeting their
4. Promote a diverse and national climate and energy
inclusive workforce: security goals, and further present
Mainstreaming diversity and missed opportunities for local
inclusion in the workforce requires value creation.
commitment and action across
company segments, from human Finally, as the industry continues to
resources to marketing to senior expand around the world, it must
leadership. It is vital that the wind also be aligned with the concept
sector is publicly recognised as an an practices of a just and inclusive
attractive and welcoming place to transition, to ensure that wind
work by those at different career energy retains sustainable
stages, from graduates to executive development and social harmony
talent. Youth outreach and as principles of growth.
education are also essential for
ensuring that the diversified job
opportunities offered by the
industry are understood,
particularly in countries where
wind penetration is still at an early
stage. Diversity should encompass
different dimensions, including
gender, ethnicity and physical
ability.
GWEC.NET
MARKET STATUS 2021
Market status 2021
Overview New installations
Onshore
-1.8%
93.6 GW of new wind power respectively, but the two regions Offshore
capacity was added worldwide in remain in the same positions as the 95.3 93.6
6.9
2021, only 1.8% lower than the previous year. 21.1
2020 record, bringing the total
installed wind capacity to 837 GW, The world’s top five markets in
a growth of 12.4% compared to last 2021 for new installations were 60.8
year. China, the US, Brazil, Vietnam, and 53.5 6.2
4.5 50.7
the UK. These five markets 4.4
88.4 72.5
Although new installations in the combined made up 75.1% of
onshore wind market dropped to global installations last year,
72.5 GW last year, it was still the collectively 5.5% lower than 2020, 49.0 46.3 54.6
second highest year in history. The primarily due to China and the US
offshore wind market had a record losing a combined 10% market
year with more than 21 GW grid share compared to 2020.
connected, three times more than
the previous year, making 2021 the In terms of cumulative installations,
2017 2018 2019 2020 2021
highest year ever. the top five markets as of the end
of 2021 remained unchanged. 2020 new installations data has been adjusted based on the input GWEC received, For details see Appendix -Methodology and Terminology
Thanks to the astounding growth of Those markets are China, the US,
installations in China (offshore) and Germany, India and Spain, which
New wind power capacity in 2021 New wind power capacity in 2021 and
Vietnam, Asia Pacific continues to together accounted for 72% of the
by region share of top five markets
take the lead in global wind power world’s total wind power Per cent Per cent
development with its market share installations, 1% lower than in 2020.
2% APAC PR China
in 2021 almost the same as 2020. Europe US
Driven by a record year of onshore North America Brazil
6% LATAM Vietnam
wind installations, Europe (19%) 25%
Africa & ME United KIngdom
recaptured the title of the second Other
largest regional market for new 14%
installations from North America
(14%) last year. Latin America and 93.6 GW 59% 3% 93.6 GW 51%
Africa & Middle East also had a 19% 4%
record year in new installations in 4%
2021 with their global market 14%
share reaching 6% and 2%

102 GWEC.NET
Market status 2021
Onshore Wind Market – Status 2021 New wind power capacity in 2021 and share of
top five onshore markets
Per cent, onshore
72.5 GW of new onshore wind Chinese onshore market to reach started construction in 2016 or 2017, Top 5*
capacity was recorded globally in new record levels of installations in which eased the pressure on Other
2021, bringing cumulative onshore the coming years, as China moves developers with projects underway
wind capacity to 780 GW. The to fulfil its “30-60” targets and as that are seeking to preserve PTC 28%
regions of Europe, Latin America wind adapts to the new market. eligibility based on start of
and Africa & Middle East had a construction during the highest
record year in new onshore In the US, a robust onshore wind available credit years. Those factors
72.5GW 72%
installations, but total installations in growth was predicted for 2021 after explain why new onshore wind
2021 is still 18% lower than the a record year in 2020 as the onshore additions in the US dropped by 25%
previous year. The decline was wind installation rush driven by the in 2021 and why more than 5 GW of
driven primarily by the slow-down planned Production Tax Credit onshore wind projects with initial
of onshore wind growth in the (PTC) phase-down was expected to COD 2021 were delayed to 2022.
world’s two largest wind power continue. Recognising the disruption
markets, China and the US. of COVID-19 on supply chain and In addition to China (30.7 GW) and *(PR China, the US, Brazil, Vietnam,Sweden)
project construction execution, the the US (12.7 GW), the top five
China had a record year in Internal Revenues Service (IRS) in onshore wind markets were Brazil
onshore wind installations in 2020 May 2020 extended the (3.8 GW), Vietnam (2.7 GW) and
with more than 50 GW installed in commissioning deadline for projects Sweden (2.1 GW). New wind power capacity in 2021 by market
a single year, chiefly driven by the that started construction in 2016 and support mechanism
Per cent, onshore
new policy released by the 2017 from four to five years, Structural changes in market
National Development and Reform meaning project developers can still support mechanisms for wind
Commission (NDRC) that set the qualify the full PTC rate if their power continued to occur in 2021. PR China-FiT
end of 2020 as the deadline for projects can reach the COD by end FiT and PTC were two primary 0.1% Auction/Tenders
4.3% US-PTC
onshore wind to qualify the Feed-in of 2021. ACP’s quarterly installation support schemes behind the new Feed-in-tariff
Tariff (FiT). It was therefore no data indicated that the US had a onshore wind capacity added in 4.8% Green Certifications
surprise that last year saw a 39% record onshore wind installations in 2020, but China’s grid parity Other
drop in new installations compared the first and second quarters of scheme (42%) and auction/tenders 17.6
with 2020. The world’s largest 2021. However, growth slowed down (31%) replaced them as the two
onshore wind market has entered in the second half, as some projects key support schemes last year. 72.5GW
the era of ‘grid parity’, meaning were delayed and postponed by PTC (17.6%) became the third 42.3%
that from 1 January 2021 onshore supply chain issues and other most important support scheme in 30.9%
wind was paid based on the disruptions caused by COVID-19. In driving new onshore wind growth
regulated price for coal power in June 2021, the IRS provided one in 2021, followed by FiT (4.8%) and
each province. GWEC expects the more year extension for projects that Green Certificates (4.3%).

Market status 2021
Despite the resurgence of

COVID-19, the global onshore
wind auction activities stayed on
track overall in 2021. Last year was
a record year with more than 69
GW onshore wind capacity
awarded globally, twice the amount
awarded in the previous year.
China has played a leading role by
allotting a total of 50.6 GW onshore
wind capacity in 2021, followed by
Spain, India, South Africa and
Germany. China has committed to
hit peak emissions by 2030 and to
achieving carbon neutrality by
2060 (known as the “30-60”
targets). To reach these targets, it
will require average annual
installation of 50 GW of wind
power over the 14th five-year
period (2021-2025). The allocated
onshore wind capacity in 2021
shows that the country is on track
to reach these ambitious targets. In
Europe, wind, renewable energy
and technology neutral auctions
were resumed last year with more
than 20 GW of onshore wind
capacity floated for auction.
Procurement was, however,
undersubscribed in several key
onshore wind markets, such as
Germany, Italy and Poland, largely
due to permitting related
challenges. In the end, only 10.3
GW of onshore wind capacity was
awarded in Europe in 2021.
GWEC.NET
Market status 2021
Offshore wind market – Status 2021 New offshore installation

MW
2021 saw 21.1 GW offshore wind the grid parity scheme. Two l There was only one small
become grid connected leading offshore wind provinces offshore wind project under
worldwide, setting a record in in China, Jiangsu and construction in Germany during 21,106
global offshore wind history and Guangdong, together approved 2021, and no offshore wind
bringing the total global offshore more than 26 GW of offshore turbines were installed. The 2,317
wind capacity to 57.2 GW by the wind projects before 2019. slow-down was primarily caused
1,001
end of 2021. According to GWEC Market by previously unfavourable
CAGR +47.4%
Intelligence’s Global Offshore market conditions and a low
1,764
l China led the world in annual Wind Project Database, 60 level of short-term offshore wind
offshore wind installations for the Chinese offshore wind projects, projects in the pipeline.
fourth year in a row with nearly with combined capacity of more
17 GW of new capacity in 2021, than 16 GW, were under l 2021 also saw Norway
bringing its cumulative offshore construction at the beginning of commission the 3.6MW 1,312
1,111
1,715
wind installations to 27.7 GW. 2021, of which more than half TetraSpar floating foundation
This is an astounding level of started construction before 2020. demonstration project at the
752
growth, as it took three decades Metcenter Test site – the second 237
for Europe to bring its total l With 3.3 GW of offshore wind floating offshore wind turbine in 6,243
6,852
offshore wind capacity to the capacity added in 2021, Europe the country. Together with the 1,253 483
same level. However, this was not accounted for the majority of five units of 9.5 MW floating wind 4,472 4,351 1,764 16,900
2,216
a normal year, as the growth- remaining new capacity. The UK turbines connected at the 1,111
1,715 1,312
rush was driven by the same had a slow year in 2020 due to Kincardine floating wind farm in 752
policy shifts that created the the gap between the execution Scotland and the one 5.5 MW 969
1,253 3,845
380
same installation-rush in onshore of projects in the Contracts for floating prototype unit installed 228 2,493
1,161 115 1,655 35 123 60
wind in 2020. According to the Difference (CfD) Round 1 and at the Yangxi Shapa III offshore 12
888
NDRC regulation released in CfD Round2. However, with wind farm in China, a total of 57 2017 2018 2019 2020 2021
May 2019, projects approved projects awarded in the CfD MW floating wind capacity was US Other Asia China
before the end of 2018 would Round 2 in 2017 and one floating commissioned in 2021. Other Europe Germany UK
receive the 0.85RMB/kWh FiT, if project coming online, the UK
fully grid-connected before the installed 2.3 GW of new offshore l Outside of China and Europe,
end of 2021. Starting from 1 wind last year, making it the two other countries recorded
The offshore wind market has grown from 4.5 GW in 2017 to 21.1 GW in 2021,
January 2022, the subsidy for largest European offshore wind new offshore wind installations in bringing its market share in global new installations from 8.4% to 22.5%. This is
offshore wind from central market in 2021, followed by 2021: Vietnam (779 MW, three times higher than 2020 primarily due to the strong growth spurt of
onshore wind in China. GWEC Market Intelligence expects the global offshore
government was terminated and Denmark (608 MW) and The intertidal only) and Taiwan (109 wind market to continue to grow at an accelerated pace (for details, see
projects would be paid based on Netherlands (392 MW). MW). Driven by the 1st of Market Outlook).

November FiT deadline, 20 1.6 GW in Maryland and 1.6 GW
intertidal projects in Vietnam in Massachusetts), 7.8 GW in
reached the commercial Europe (5.8 GW in Poland, 1 GW
operation date (COD) last year in Denmark and 0.96 GW in
according to EVN, making it the Germany), and 3.1 GW in Asia
third largest market in new Pacific (1.7 GW in Japan and 1.4
installations in 2021. Taiwan GW in China). All three projects
should have commissioned more awarded in Germany last year
than 1 GW of offshore wind were from so called “zero-
capacity from three projects last subsidy” bids, meaning that the
year based on the project COD project will only receive the
plans, but only the 109 MW wholesale price of electricity
Changhua demonstration came and no further support/payment.
online in the end. The delay is In Denmark, the winner of the 1
primarily caused by COVID-19 GW Thor project was decided
related disruption. by a lottery draw as more than
one bidder offered to build the
l United States is the only market Thor offshore wind farm at the
with offshore wind in operation in minimum price of DKK 0.01/
America, but no offshore projects kWh.
were built in 2021.
l 2021 also saw the Crown Estate
l Interms of cumulative in the UK allocate areas for
installations, the top spot has developing nearly 8 GW of
been held by the UK since 2009, capacity through its Round 4
but as GWEC predicted, China seabed leasing. In addition, Crown
took over the position by the end Estate Scotland launched its first
of 2021. The other markets in the round of offshore wind leasing,
global top-five are: Germany, ScotWind. The application window
The Netherlands and Denmark. closed in July 2021.
l Lastyear, a total of 19.4 GW

offshore wind capacity was
awarded worldwide through
auctioning, of which 8.4 GW was
in the United States (2.5 GW in
New York, 2.7 GW in New Jersey,

106 GWEC.NET
Market status 2021
All regions increased new installations, Although the YoY growth rate was
negative (-1.8%) in 2021, the
annual wind market grew (with
except Asia and North America onshore and offshore combined) in
all regions except Asia and North
America. Looking at the onshore
wind market, Europe, LATAM,
Changes in new installations 2020 to 2021 Africa & Middle East and Pacific
GW, onshore and offshore had a record year in 2021 with YoY
growth rates at 19%, 27%, 120%
and 58% respectively. However,
-19.9
new onshore wind capacity added
95.3
in Asia and North America last
93.6 year dropped by 33% (17.5 GW)
14.3 and 21% (3.7 GW) compared with
2020. The decline in these two
regions was primarily due to lower
onshore installations in the world’s
two largest markets China and
United States. In China, the
transition from FiT support
mechanism into the grid parity
(“subsidy free”) scheme for
onshore wind from the beginning
3.3 of 2021 slowed down growth. In the
0.3 US, disruptions on account of the
-4.2 2.3 COVID-19 pandemic combined
with supply chain constraints have
1.2 1 caused delays in onshore wind
project construction execution in
2H 2021. New offshore wind
installations increased by 209%
(14.3 GW) compared to 2020,
Total 2020 China US LatAm Africa, ME Europe India Other Offshore 2021 which was mainly due to the
onshore onshore onshore onshore onshore onshore onshore policy-driven installation rush in
both China and Vietnam.

Market status 2021
Actual for 2021 vs the GWEC forecast Actual for 2021 vs the GWEC forecast
China onshore
Growth was expected to slow in 2021 as the Chinese onshore wind market has entered the ear of “grid parity”.
The country approved more than 27 GW of onshore grid parity projects after NDRC released the grid parity Actuals 2021
roadmap in the middle of 2019. Those projects were predicted to be the backbone of new installations in 2021. Forecast Q3 2021
USA onshore
Robust onshore wind growth was predicted for 2021, based on ISR in May 2020 extending the COD deadline
00
32 70
for projects that started construction in 2016 from four to five years – this meant developers could still qualify
,5
,6
30
for the full PTC if their projects can reach the COD by end of 2021. However, disruptions due to COVID-19
and supply chain issues slowed down project construction execution from the 3rd quarter of 2021 onwards.
India onshore
The onshore wind market in India was expected to recover in 2021 after the market was hit hard by the
COVID-19 pandemic in 2020. Although its annual installation increased by 30% last year, the second surge of
COVID-19 led to a renewed slowdown during the period of 1st April to 15th June, making 2021 another
challenging year for India’s onshore wind market.
Germany onshore
Germany had a low level of onshore wind installations in 2020 due to permitting issues and delays caused by
COVID-19. Onshore installations rose to 1.9 GW in 2021, up from 1.4 GW in 2020, which was in line with our
expectation and reflects a slight improvement in the permitting situation as well as the recovery of project
construction execution.
Brazil onshore
00
Onshore wind power development in Brazil already demonstrated the strong resilience of the industry in 2020,
,9
16
shrugging off social and political turbulence in the context of the COVID-19 crisis. Nearly 4 GW of onshore
wind installations in 2021 has set a new record for the country, representing strong growth of project
14 7
00
development in the so-called “free market” (power contracted outside of regulated public auctions).
4
,7
,0
12
Vietnam onshore
Dramatic onshore wind growth was projected for 2021 as more than 100 wind projects, totalling 5.7 GW,
already registered in August 2021 with national utility Electricity of Vietnam (EVN) rushing to begin commercial
operations before the 1 November deadline, the cut-off date for projects to qualify the FiT in Vietnam. The local
onshore wind industry outperformed in 2021 considering that the country was also impacted by the second
0
wave of COVID-19.
50
7,
UK offshore
In GWEC’s Q3 2021 Market Outlook, two fixed-bottom projects and one floating wind project, totalling 1,855
MW, were predicted to come online in the UK in 2021. Statistics show that one third of turbines at the 1.4 GW
0
83
0
Hornsea Two offshore wind project also came into operation in 2021 in addition to those three projects.
20
7
3,
1, 7
5
0
71
9
50
31
85
2,
30
92
00
45
2,
1,
2,
2,
1,
20
1,
Germany offshore
Not a single offshore wind turbine was installed and commissioned in Germany during 2021, which was in line
with GWEC’s projection. This situation was primarily caused by unfavourable offshore wind conditions at the
time and a lowe level of short-term offshore wind project pipeline. New capacity is expected to come online in
China US India Germany Brazil Vietnam UK Gernmany China
2022, but volume remains low. offshore offshore offshore
China offshore
2021 was the third year of an offshore wind installation rush in China as projects approved before 2019 had to
get fully grid connected before the end of 2021 to qualify for the 0.85RMB/kWh FiT. A big surge was
expected for 2021 but connecting 16.9 GW in a single year surpassed all expectations.

108 GWEC.NET
Market status 2021
New installations onshore (%) New installations offshore (%)

Netherlands 2% Rest of World 1%
Rest of World 18% PR China 42% Denmark 3%
Vietnam 4% PR China 80%
United Kingdom 11%
France 2%
Turkey 2%
India 2%
Australia 2% 72.5GW 21.1GW
Germany 3%
Sweden 3%
Vietnam 4%
Brazil 5%
US 18%
Total installations onshore (%) Total installations offshore (%)
Rest of World 17% Rest of World 7% PR China 48%

PR China 40% Denmark 4%
Sweden 2% Netherlands 5%
United Kingdom 2%
Canada 2%
France 3% Germany 13%
780.3GW 57.2GW
Brazil 3%
Spain 4%
India 5%
United Kingdom 22%
Germany 7%
US 17%
Detailed data sheet available in GWEC’s member only area. For definition of region see Appendix - Methodology and Terminology

Market status 2021
Historic development of new installations (GW)
CAGR
+7% 95.3
93.6
6.9
21.1
Onshore
Offshore CAGR
+10%
63.8
CAGR 3.4 60.8
+22% 6.2
54.9
2.2
53.5
51.7 4.5 50.7
1.5 4.4
45.0
1.2
38.5 39.1 40.6
0.9 0.9 36.0
0.6
1.6
26.9
0.4
20.3
0.3
14.7
11.5 0.1
8.1 8.2 0.1
6.5 7.3 0.1
0.2 0.3
0.1
6.4 7.1 7.9 8.1 11.4 14.6 20.0 26.5 37.9 38.2 39.8 43.9 34.5 50.2 60.4 52.7 49.0 46.3 54.6 88.4 72.5
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Share of offshore ~1% ~3% 5-10% 23%

110 GWEC.NET
Market status 2021
Historic development of total installations (GW)
837
57
CAGR 745
+12% 36
650
29
591
Onshore 23
Offshore 540
19
CAGR 488
+17% 14
433
12
CAGR
370
+26% 8
319
7
283
238 5
198 4
3
159
94 121 2
1
74 1
48 59
24 31 39 -1
-1 -1
0 -1
0
31 39 47 58 73 93 119 157 195 234 278 312 362 421 473 522 568 621 707 780
24
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Share of offshore ~1% ~2% 3-5% 7%

Market status 2021
Historic development of new and total installations

MW, onshore New installations 2020 Total installations 2020 New installations 2021 Total installations 2021
Total onshore 88,437 708,901 72,499 780,275
Americas 21,650 169,658 19,243 188,233
USA 16,913 122,275 12,747 134,354
Canada 165 13,578 677 14,255
Brazil 2,297 17,750 3,830 21,580
Mexico 574 6,789 473 7,262
Argentina 1,014 3,287 669 3,287
Chile 684 3,444 615 3,444
Other Americas 3 2,535 232 4,051
Africa, Middle East 823 7,277 1,809 9,085
Egypt 13 1,465 237 1,702
Kenya 0 338 102 440
South Africa 515 2,495 668 3,163
Other Africa 295 2,979 802 3,780
Asia-Pacific 54,130 337,870 37,352 375,161
China 50,576 279,959 30,670 310,629
India 1,119 38,625 1,459 40,084
Australia 1,097 7,296 1,746 9,041
Pakistan 48 1,287 229 1,516
Japan 551 4,373 211 4,523
South Korea 100 1,515 64 1,579
Vietnam 125 513 2,717 3,231
Philippines 0 427 0 427
Thailand 0 1538 16 1554
Other APAC 514 2,337 240 2,577
Europe 11,834 194,097 14,095 207,796
Germany 1,431 55,122 1,925 56,814
France 1,318 17,946 1,192 19,131
Sweden 1,007 9,811 2,104 10,002
United Kingdom 122 13,739 328 14,064
Turkey 1225 9,281 1,400 10,681
Other Europe 6,731 88,198 7,146 97,104
MW, offshore New installations 2020 Total installations 2020 New installations 2021 Total installations 2021
Total offshore 6,852 36,077 21,106 57,176
Europe 2,936 24,837 3,317 28,154
United Kingdom 483 10,206 2,317 12,522
Germany 237 7,728 0 7,728
Belgium 706 2,262 0 2,262
Denmark 0 1,703 605 2,308
Netherlands 1493 2,611 392 3,003
Other Europe 17 327 4 331
Asia-Pacific 3,905 11,199 17,788 28,980
China 3,845 10,780 16,900 27,680
South Korea 60 133 0 133
Other APAC 0 285 888 1167
Americas 12 42 0 42
USA 12 42 0 42
GWEC made the adjustments to new installations and total installation in 2020 for China, Kazakhstan, Spain, United Kingdom, Italy, Poland, Ireland, Panama and Peru based on the updated statistics GWEC received.

112
MARKETS TO WATCH
Markets to Watch
Vietnam
Vietnam is leading Southeast Asia’s COP26 and the finalisation of the Ambitious PDP8 and a bold net
energy transition. Having installed draft Power Development Plan VIII zero target by 2050
more than 20 GW of renewable (PDP8), Vietnam is poised to The draft PDP8 has undergone 4-5
energy in a short span of three usher in an era of renewable rounds of revisions since its launch
years from 2019 to 2021, Vietnam energy growth to meet its energy in March 2021. According to the
now has nearly 4 GW of wind security and climate Ministry of Industry and Trade
power and 16 GW of solar power.1 commitments. The wind industry (MOIT), as of March 2022, the
is also waiting for further policy PDP8 is due to be submitted for
In 2021 alone, Vietnam surprised clarity on the replacement for the finalisation by the Prime Minister at
the world with an impressive boom expired FiT mechanism, which the end of Q1 2022. It has not yet
in wind despite severe supply has played a crucial role in been finalised at the time of
chain disruption brought by the driving renewables investment writing. The latest draft released by
COVID-19 pandemic. More than since its introduction in 2013. the Office of Government in March
3,360 MW of new wind capacity 2022 factors in Vietnam’s 2050 net
was built by the end of 2021 as the These developments and strategic zero target, lower coal capacity
industry rushed to meet the wind commitments will shape Vietnam’s targets and increased renewable
Feed-in Tariff (FiT) deadline, energy transition pathway in the next energy targets.
making Vietnam the largest wind decade. Furthermore, recent coal
energy market in Southeast Asia.2 and gas price volatility has led the As compared to the March 2021
Indonesian government to institute a draft of PDP8, the latest draft
Despite the growth in renewable temporary ban on coal exports and published one year later reflects
energy, with forecast 6.5% GDP pushed up power prices across an increase in offshore planned
growth and 11% increase in Europe and Asia. Coal projects are capacity by 2030 and 2045, and an
power consumption in 2022 facing difficulties in securing project increase in overall onshore
estimated by the ADB, Vietnam is finance, and Vietnam has not had planned capacity by 2045. Under
struggling to meet its energy any new coal PPAs since 2017. Scenario 1, which implies a more
demand with domestic fossil fuel These market forces should further basic energy transition, onshore
production and is heavily reliant encourage Vietnam to decrease its wind and solar growth is restrained
on imported fuels.3 Coupled with dependence on fossil fuels and raise through 2030 considering grid and
the 2050 net zero target made at its renewable energy ambitions. transmission challenges, and LNG
takes a greater role in the energy
1. Southeast Asia: 10 Things to Watch in 2022, BloombergNEF; GWEC Market Intelligence. mix by 2045. The more robust
2. https://en.evn.com.vn/d6/news/The-status-of-commercial-operation-acceptance-COD-of-wind-power-plants-as-of-31-
October2021-66-142-2562.aspx; GWEC Market Intelligence.
transition in Scenario 2 shows
3. https://www.adb.org/countries/viet-nam/economy steeper cuts to coal and LNG

114 GWEC.NET
Markets to Watch
targets, and more aggressive challenges posed by the ongoing Vietnam’s wind energy targets in the draft PDP8
medium- and long-term growth for pandemic, project delays have led
onshore wind, offshore wind and to only 106 wind projects (roughly 80,000
solar PV. 5,800 MW) successfully submitting 70,000
the required paperwork for
60,000
While the PDP8 has not been connection plans. Of these, only 84
finalised at the time of writing, projects (roughly 3,900 MW) have 50,000
MW
Vietnam will require accelerated been accepted for COD or partial 40,000
and ambitious wind energy COD, leaving around 4,200 MW of
30,000
deployment to reach its targets onshore and nearshore wind
under either scenario. The latest projects at risk of becoming 20,000
updates could be increased even stranded assets without clarity on 10,000

further to reflect Vietnam’s wind procurement or grid connection. 0
potential; for example, according
to the World Bank Group, Vietnam While the industry has advocated Onshore Wind (2030) Onshore Wind (2045) Offshore Wind (2030) Offshore Wind (2045)
has the capability to develop as for a wind FiT extension to account March 2021 Draft (High Scenario) October 2021 Draft (High Scenario) March 2022 Draft (Scenario 2)
November 2021 Draft (High Scenario) March 2022 Draft (Scenario 1)
much as 10 GW of offshore wind for COVID-19-related delays,
by 2030.4 MOIT has instead proposed that Sources: Unofficial updates announced by MOIT from March 2021 to March 2022.
project developers negotiate a
Keeping onshore wind blowing price framework and connection
through a transition mechanism agreement directly with EVN. As of 4-5 GW target by 2030, the next A transitional FiT to cover a portion
In recent years, policymakers in today, the government has yet to step will be for policymakers to or all of the first 7-8 GW of offshore
Vietnam have sought to encourage finalise any supportive framework define a clear offshore wind wind targeted by 2030 will not only
the onshore wind sector via several to replace the expired FiT scheme, regulatory framework, including give the government enough
supportive policies. This includes which poses a major risk to the procurement mechanism and budgetary and planning control
Decision 39/2018 which provided a onshore wind capacity additions in permitting and consenting over offshore wind development,
clear route to market and 2022. requirements. but also provide a smoother
generated a response of more than runway to competitive tenders.
140 wind projects signing PPAs Setting the path for offshore wind The old offshore wind FiT ($0.098/
with the state-owned utility EVN. It is important to ensure that kWh), which applied to nearshore The existing wind PPA provided in
Vietnam’s offshore wind policy is or intertidal projects, expired on Circular No. 32/2012T must also be
However, due to the logistic, designed for steady and 31 October 2021. An initial updated, as it is often deemed to
workforce and supply chain sustainable long-term growth, procurement mechanism for true fall short from international
providing sufficient time for the offshore wind can be in the form of standards for bankability. Given
4. Offshore Wind Roadmap for Vietnam, World Bank, 2021. offshore wind industry to mature. a transitional FiT to support the first the risks presented in the current
5. Vietnam’s Future Transition to Offshore Wind Auctions
- International Best Practices and Lessons Learned, With the influx of investor interest batch of projects before moving to PPA, including challenges on the
GWEC, 2021. in the offshore wind market and a a competitive auction mechanism.5 terms for dispute resolution and

Markets to Watch
curtailment, it is even more 27% of the total capacity. The As Vietnam continues to push for power transmission, with the
important to have a clear and dramatic increase in renewable more wind and solar, it will require exception of grid projects
visible transitional support energy in the last three years has significant investment to upgrade implemented by the state under
mechanism to support Vietnam’s highlighted the need to upgrade and reinforce its grid system. the national electricity
initial offshore wind development. existing electricity grid and Decree 35/2021/ND-CP from development plan. Vietnam’s net
transmission infrastructure to meet March 2021 provides details and zero commitment can also unlock
Renewable deployment and grid future energy demand and supply. guidance on the first-ever Law on various international financing
infrastructure go hand-in-hand If not properly managed, a Public-Private Partnership channels to support grid initiatives
According to EVN, by the end of bottleneck in renewable energy No.64/2020/QH14 – combined with to integrate larger shares of
2021 Vietnam’s total installed integration can deter the the recent draft amendments to the renewable energy.
power capacity reached 76.6 GW, government from implementing country’s Electricity Law, the
a 7.5 GW increase from 2020, with the ambitious renewable energy government is considering 5. Vietnam’s Future Transition to Offshore Wind Auctions
- International Best Practices and Lessons Learned,
renewable energy comprising targets in the draft PDP8. allowing the private sector to build GWEC, 2021.

116 GWEC.NET
Markets to Watch
The Philippines
The Philippines is home to a dramatic acceleration from the the COP26 Global Coal to Clean
rapidly growing population and current one-fifth share held by Power Transition Statement.3
steady urbanization, which hydropower, geothermal, solar and
translates into rising energy wind, requiring an additional 73.9 The upcoming Green Energy
demand.1 It is also endowed with GW of renewable capacity over Auction Program (GEAP) is an
natural advantages for the the next two decades. However, opportunity to reactivate the
development of renewables, and wind energy development has dormant wind and solar markets.
benefits from a strong financing stalled in the last four years due to Against this background is a series
environment with public and lack of ambitious targets or of topline news around the grant of
private sector appetite for schemes and poor policy a service license to several
investing in clean energy. coordination, with around 442.9 industry players in the offshore
MW installed as of the end of 2021. wind business, indicating the
Around four-fifths of electricity in government’s ambitions to
the Philippines is drawn from Shifting away from coal, which kickstart the offshore wind sector.
imported fossil fuels commodities provides more than 40% of the
like coal, oil and natural gas. In the nation’s electricity and is Creating a supportive scheme for
midst of an energy transition responsible for around 60% of wind energy
towards energy self-sufficiency, the energy outages in the Philippines, With good wind conditions on the
government has introduced several will be crucial to shoring up northern and central Batanes and
pro-renewables policies such as energy security through the Luzon areas, conservative
the Renewable Energy Law, the large-scale deployment of assumptions by National
targets set in its Philippine Energy renewables.2 It will also be Renewable Energy Laboratory
Plan (PEP) 2020-2040 and a necessary to support the (NREL) dating from 2020
regulatory mandate of Renewables Philippines’ NDC to reduce GHG concluded that these areas have an
Portfolio Standards (RPS). emissions by 75% from 2020-2030, onshore wind technical potential of
compared to a BAU scenario. 76 GW.
The PEP, last revised in 2021, Promising signs include a
targets a 35% renewable share of moratorium on new coal plants However, development has not
the power mix by 2030, rising to announced in late 2020, and the matched this potential. Most wind
50% by 2040. This will be a Philippines’ partial endorsement of power to date was developed
1. https://data.worldbank.org/indicator/SP.URB.GROW?locations=PH
2. https://cleanenergynews.ihsmarkit.com/research-analysis/philippines-announces-moratorium-on-new-coalfired-power.html
3. The Philippines endorsed clause 1 and partially clauses 2 and 4, and reiterated “a call for climate justice given the Philippines is not a major emitter of greenhouse gases but bears the
worsening impacts of climate change, and to emphasise that energy security is foremost as energy transition is a means to improve the lives of the Philippines’ people and the country’s
economic development.” See: https://ukcop26.org/global-coal-to-clean-power-transition-statement/.

Markets to Watch
under a FiT readiness requirements to be Due to the pandemic, presenting an incredible

mechanism of issued by the government. implementation has been delayed opportunity to meet national
$0.14-0.17/ to 2022. The Department of Energy energy security and
kWh, which The National Renewable Energy (DOE) has announced a solicitation decarbonization goals.
was in place Board is responsible for the of qualified developers in February
until the National Renewable Energy 2022. The Energy Regulatory To date, the DOE has issued a
quota of Program (NREP), which includes Commission is in the process of large number of Offshore Wind
wind was technology-specific renewable determining the GEAP auction Service Contracts (OWSC) to a
fulfilled in energy targets and a renewables price cap, with 380 MW of wind number of players in the region.
2016. development roadmap. The NREP capacity in Luzon and Visayas on Recipients of OWSC will have five
Activity has 2020-2040 is being updated to offer in 2022. years to develop the projects.
stalled since match with the PEP Clean Energy These include a few high-profile
that time, Scenario goals, and has introduced More ambitious renewable energy projects which are notable for their
although there is a wind energy target of 763 MW targets, and a schedule of project size, such as Triconti’s
a total volume of by 2030 and 11,387 MW by 2040. continuous and regular capacity multiple OWSC totalling 3.5 GW, in
3,524 MW of wind At the same time, the NREP procurement for specific partnership with international
projects which have secured maintained the 1% RPS level, renewable energy technologies, developer Iberdrola, as well as The
Renewable Energy Service instead of pushing for a higher will help encourage local value Blue Circle’s partnership with
Contracts.4 A lack of supportive threshold. Considering the volume chain investment and restore Cleantech Global Renewables to
mechanisms like a FiT is the main of wind projects in the confidence in the wind sector’s develop a 1.2 GW offshore wind
cause for the gap in project development pipeline and natural growth prospects. farm off Bulalacao, Oriental
development. Although the RPS resource potential, the current Mindoro.
system was introduced in 2017 to NREP wind targets are deemed to Offshore wind development
incentivise renewable energy be unambitious. on the horizon The DOE is also developing an
demand, the low requirement of a According to the World Bank offshore wind roadmap with the
1% threshold prevented it from Guidelines governing the GEAP Group, the Philippines’ EEZ support of the World Bank Group’s
being effective. were introduced in 2020, aiming at contains around 178 GW of ESMAP-IFC Offshore Wind
providing additional market technical resource potential for Development Program. The draft
In addition, the Philippine options through auctioning 2,000 offshore wind, primarily in floating roadmap has identified 6 different
Renewable Energy Market MW of renewable capacity. wind with around 18 GW for zones suitable for offshore wind
System (PREMS) for trading Through the GEAP, the winner of fixed-bottom offshore wind. This is development, totalling 2.8 GW by
renewable energy certificates the auction will secure PPAs and a more than seven times the total 2030 and 58 GW of potential
(RECs) was launched in 20-year FiT, providing optimism to installed electricity generation volume by 2050, across mainly
December 2019 as an online actors in the dormant wind market. capacity in the country – floating offshore wind projects.
platform. PREMS has not yet been
4. Power Development Plan 2020-2040, Philippine Department of Energy, page 84.
in commercial operation and 5. Power Development Plan 2020-2040, Philippine Department of Energy, Annex 13.
remains subject to some market 6. https://documents1.worldbank.org/curated/en/519311586986677638/pdf/Technical-Potential-for-Offshore-Wind-in-Philippines-Map.pdf

118 GWEC.NET
Markets to Watch
China
China has been the world’s largest Notice of the on-grid onshore and offshore FiT in China
wind market by installed capacity
since 2010. The continued growth Type Timeline RMB/KWh Requirement
of wind in China over the past Onshore Approved before FiT (2016-2017): Connected to grid
decade is mainly due to ambitious the end of 2018 Class I: 0.47, Class II: 0.50, Class III: 0.54, before the end of
Class IV: 0.60 2020
policies from the central
government. FiT (2018):
Class I: 0.40, Class II: 0.45, Class III: 0.49,
Class IV:0.57
2020 was a record year, with more
Approved in 2019 Auction ceiling price: Connected to grid
than 54 GW of installations Class I: 0.34, Class II: 0.39, Class III: 0.43, before the end of
primarily driven by the expiration ClassI IV: 0.52 2021
of the onshore wind FiT. Although Approved in 2020 Auction ceiling price: Connected to grid
onshore wind growth slowed down Class I: 0.29, Class II: 0.34, Class III: 0.38, before the end of
last year, China retained strong ClassI IV: 0.52 2021
momentum in 2021. According to Since 2021 Subsidy-free

the National Energy Administration Offshore Approved before FiT: 0.85 Connected to grid
(NEA), 47.5 GW wind capacity was the end of 2018 before the end of
2021
grid-connected in 2021, making it
Approved in 2019 Auction ceiling price: 0.80
the second-best year in the
country’s history. Approved in 2020 Auction ceiling price: 0.75
Source: NDRC, May 2019

Of these new installations, 16.9
GW is offshore wind – a record in A new era for the Chinese wind shall reach grid parity. From 2022,
the global offshore wind industry, industry the central government will cease
and nearly three times the volume After a decade of rapid growth, subsidies for offshore wind,
of new offshore wind installed China’s renewable market has although a small portion of
worldwide in 2020. This explosive entered a new stage. Support for financial support will be offered by
growth was similarly driven by renewables has shifted from a FiT provinces like Guangdong and
the deadline for projects to model to a “grid parity” model, Zhejiang for the next 3-4 years to
access an offshore wind FiT, where renewable-generated support offshore wind’s journey to
under a policy released by the electricity will receive the same grid parity by 2025. In certain sea
National Development and remuneration as coal-fired power areas, the government is confident
Reform Commission (NDRC) in plants. Starting from 1 January that grid parity can be achieved
2019. 2021, all onshore wind projects even before 2025.

Markets to Watch
Average tender prices for wind turbines in China, 2020-2021 (RMB/kW) with the majority of onshore for the second phase opened at
products in the 5-7 MW size range the end of the year.
and offshore turbines in the 12-16
8,000 MW range. l Insouthwest China, combined
7,000
with the development of
The 14th Five-Year Plan paving hydropower, projects which
5,000 the road to “30-60” targets integrate hydropower, wind and
4,000
To reach the “30-60” target (peak solar will be coordinated. Two
emissions by 2030 and carbon giant energy bases will be
3,000 neutrality by 2060) on time, the constructed.
2,000 Chinese government has made a
comprehensive plan to accelerate l Inthe eastern coastal areas,
1,000 the development of renewable offshore wind clusters will be
0 energy. By the end of the 14th Five promoted with large-scale
Year Plan period (2021-2025), the offshore bases (10 GW level).
Jan 20
Mar 20
May 20
Jul 20
Sep 20
Nov 20
Jan 21
Mar 21
May 21
Jul 21
Sep 21
Nov 21
Dec 21
share of renewable energy in total The five selected offshore bases
power generation capacity is set to are in Shandong Peninsula,
Onshore
Note: Prices are ased on date of tenderOffshore
and include wind towers. If tender price was unavailable for a given month, price
exceed 50%. The key measures Yangtze River Delta, Southern
from previous month was used outlined by the NEA to support Fujian, Eastern Guangdong and
Source: China Bidding Centre, December 2021
wind power development in this Beibu Gulf.
period include:
l Inthe central and southeast
China is also the world’s largest become even more intensive with l Innorthern China, development regions, distributed wind
wind turbine manufacturing hub, turbine prices including towers will focus on the Gobi and projects will be promoted,
accounting for 60-65% of global dropping to $316/kW for onshore various other desert areas and especially in villages in the vast
production of turbine nacelles and wind and $632/kW for offshore efforts will be made to increase rural areas. It is estimated that
key components including wind. transmission capabilities and 5,000 villages will be selected
gearboxes, generators and blades. local consumption of renewable and 10,000 turbines, totalling 50
There are still 20 turbine Price pressure also drives energy. Existing coal-fired power GW, will be installed by 2025.
manufactures active in the Chinese technology innovation. Chinese plants in the region will be
wind market today. During the wind turbine OEMs continue to upgraded to support balancing l Inareas with high-quality wind
transition to the era of grid parity, launch new turbines with greater the grid system. Seven giant resources and existing
manufacturing competition in power ratings and bigger rotors for onshore wind/solar bases are installation, upgrading and
China has become increasingly the domestic market. At China planned. In 2021, the repowering of aging wind farms
fierce, reflected in record-low Wind Power 2021, co-organised by construction of the first phase of will be implemented to increase
bidding prices in 2021. At the start GWEC, local turbine OEMs a renewables base, totalling 100 efficiency and Annual Energy
of 2022, price competition has released nearly 40 new models, GW, kicked off, and applications Production (AEP).

120 GWEC.NET
Markets to Watch
Case study: Challenges and

opportunities facing China’s
wind industry
Provided by: Techstorm
In 2020, China announced the

challenging “30-60” targets to reach
peak CO2 emissions before 2030
and CO2 neutrality by 2060.
At the same time, China cut subsidies
for onshore and offshore wind power.
This has led to further cost-out
pressure, as shown during the latest
China Resources bidding round for
100 MW onshore wind in Inner
Mongolia in February 2022, which
saw a record-low price of RMB 1,889/
kW ($297/kW), including the tower.
Often, challenge means opportunity.
Techstorm has implemented a series
of measures to achieve the carbon
neutrality target. For instance, its new l Supply chain improvement: l Longerblades: These are needed With these measures, the industry
Shanghai plant uses solar energy and COVID-19 had a significant impact for OEMs to continuously design can be confident to support China’s
heat pump systems, as well as the on the global supply chain stability, new turbines with bigger rotors and targets of carbon neutrality and a
“EnOS Ark” carbon management which can be improved by greater power. sustainable future.
system to monitor and reduce CO2 localisation measures, dual-
l Biggervolumes: Increased market Find out more: https://techstorm.com/
emissions and energy consumption. sourcing and vertical integration.
share can help to establish long- en/introduce.html
It will also acquire green certificates
l Redesign existing formulations: term contracts with suppliers at
to support carbon neutrality.
Reformulation towards better lower prices. Larger platforms in
There are further measures needed performance and lower cost is factories to handle greater volumes
to counter the cost-out pressure in helping turbine manufacturers optimise processes and reduce
China: achieving LCOE reduction. production costs.

Markets to Watch
China’s 14th Five-Year Period Renewable Development Plan contains various short-term and
long-term orders, including the
initial build of a nationwide single
power market to facilitate China’s
energy transition under its climate
goals by 2025, and completion of
the market development by 2030.
Efforts will be made to enhance

the adaptability of the electricity
market to a high proportion of
new energy sources, according to
Nei Menggu the guidelines, which also urge
Gansu
the strict implementation of laws,
regulations and policy measures
to promote the participation of
Qinghai
new energy in market
transactions. Under the system,
Giant onshore wind/solar the national, provincial and
energy bases regional markets will operate
collaboratively, with significant
Giant integrated enrgy bases
Hunan
improvements in cross-provincial
(hydropower/wind/solar)
and cross-regional market
Offshore wind bases allocation of resources and green
power trading. End-users will be
able to directly purchase green
electricity, and grid enterprises
will prioritise the implementation
Source: NDRC, NEA, 2021
of direct renewable power
procurement.
In addition, to promote energy solutions and smart the government has recently
technological innovation the micro-grids. launched plans for power market China in pole position for global
government plans to support reform. In January 2022, the NDRC wind power growth
demonstration projects such as Power market reform for a and NEA jointly released Following the “30-60” pledge
deepwater wind, high-efficiency renewables-led revolution guidelines for accelerating the made in September 2020, the
solar cells, energy islands, large- To build a power system fit for the establishment of a unified national Chinese government updated its
scale renewable hydrogen, hybrid renewables-led energy transition, electricity market. This directive NDC commitment to achieve 25%

122 GWEC.NET
Markets to Watch
Chinese wind market development, GW, 2015-2026
70
60
50
40
30
20
10
0
2015 2016 2017 2018 2019 2020 2021 2022e 2023e 2024e 2025e 2026e
Onshore Offshore
Source: GWEC Market Intelligence, CWEA, March 2022
non-fossil fuel generated energy wind target by 2025, five years before 2030 and support a
in the primary energy mix and ahead of schedule. cost-efficient path to carbon
boost its solar and wind capacity neutrality by 2060. Based on
to more than 1,200 GW by 2030. The tremendous growth in 2020 China’s latest renewable energy
Following this example, China’s and 2021 shows that the Chinese development plans as well as the
major state-owned power wind industry can deliver on its directive on power market reform,
companies have set goals of Beijing Declaration pledge of 50+ GWEC Market Intelligence
installing a total of 600 GW of GW of annual wind power believes that China will continue
additional solar and wind power installations.1 It also demonstrates to lead global wind power growth
during the 14th Five-Year Plan that wind power would bolster the in the decades to come.
period. If fully implemented, China country’s progress toward the
could hit its 1,200 GW solar and goal of hitting peak emissions 1. https://gwec.net/beijing-declaration-on-wind-energy/

Markets to Watch
India
India’s announcements at COP26 in industry. For instance, it slowed charges for renewables projects
November 2021 strengthened down production of wind towers as commissioned by June 2025, with
confidence in the country’s oxygen supply for industrial compliance of must-run status for
renewable energy commitments. processes was diverted to medical all renewables projects; innovative
Prime Minister Narendra Modi requirements. Progress picked up auction models for round-the-clock
announced a multi-pronged again in the second half of the year. and hybrid generation; and a clean
approach to bolster climate action: energy trading system through the
500 GW non-fossil fuels energy More than 1.4 GW of wind was launch of the Real-Time-Market
capacity by 2030; 50% renewables installed in 2021, exceeding the platform/Green Day Ahead Market
in the energy mix by 2030; reduction 1.1 GW of installations during the and Green-Term Ahead Market.
of total carbon emissions by 1 billion previous year. Auction activity also
tonnes between 2021 and 2030; gained momentum in 2021, with Measures to accelerate wind
reduction of the emissions intensity nearly 2.7 GW of onshore wind sector growth
of the economy by 45%; and and 1.95 GW of hybrid auctions During the recent period of global
achievement of net zero by 2070. awarded by state and central wind supply chain crunches, India
agencies. A 7.5-months blanket has been increasingly
The current share of non-fossil fuels time extension has been granted acknowledged as a prominent hub
in overall generation capacity stands to renewables projects on account in Asia for turbine component
at 38.5%, out of a total 395 GW. While of initial disruptions from manufacturing and exports. The
wind currently accounts for 10.2% of COVID-19, but as supply chain keys to improving investors’
this, to further realise its 2030 climate challenges persist, GWEC Market sentiments for wind energy in India
commitments, the Ministry of New Intelligence projects the market include prioritisation for timely
and Renewable Energy (MNRE) has outlook for 2022 and 2023 as 3,200 attainment of targets, strengthening
estimated 140 GW wind energy MW and 4,100 MW of onshore of the domestic supply chain, and
capacity is needed by 2030.1 wind installations respectively. ease of doing business with lower
Globally, India ranks fourth in production and labour costs.
installed wind capacity with 40.1 Policy measures helped to catalyse
GW as of January 2022.2 recovery and maintain investment In 2021, GWEC India made
interest in the wind market. These representations to the MNRE and
Pandemic-related challenges measures include: an extension of Ministry of Finance, requesting
receded by mid-2021 the waiver of interstate power support for an enabling duty and
The second surge of COVID-19 transmission system (ISTS) concessions regime for wind energy.
from April to mid-June 2021 had a 1. http://164.100.47.193/lsscommittee/Energy/17_Energy_21.pdf
notable impact on India’s wind 2. Central Electricity Authority of India

124 GWEC.NET
Markets to Watch
This would cover important aspects into SECI’s ISTS wind and hybrid wide spectrum for the wind market
such as a surge in GST rates for auctions during 2021. in this decade.
wind components manufacturing
from 5% to 12%, and the elimination l NTPC, oil and gas company Exploiting untapped onshore and
or revision of Customised Custom ONGC, hydroelectric company offshore wind potential to reach
Duty Concession benefits which SVJN and others are greening net zero
have a direct implication on tariffs their energy portfolios through To meet the 2030 target of 140 GW
discovered through e-reverse renewable energy targets and installed wind capacity,
auctions. conversion of nonperforming policymakers should examine the
fossil-fuel power generation vast, untapped onshore and
PPA sanctity and action to improve assets into renewables assets. offshore wind resource. Across the
the financial health of distribution country, the National Institute of
companies (DISCOMs) are also The government is also working on Wind Energy (NIWE) has assessed
crucial for accommodating higher grid integration of almost 44 GW of more than 300 GW of onshore
shares of wind into the transmission new renewable power generation wind potential at 100 meter hub
and distribution network. through Green Energy Corridors height, as well as nearly 700 GW of
(GEC). GEC Phase 1 is due to be onshore wind potential at 120
To swiftly expand renewables completed in 2022, and the second meter hub height.
capacity in India, policymakers can phase, which will run through 2026,
also encourage greater was recently approved by the Through repowering older kW-rated
commitments from India’s public Cabinet Committee on Economic wind turbines through suitable
sector undertakings (PSUs) to Affairs.3 For grid balancing, MNRE repowering policy measures, India
invest in renewables and participate has asked the National can add substantial wind capacity
in wind auctions. These PSUs are Hydroelectric Power Corporation
increasingly active in the sector: (NHPC) to exploit hydropower
resources in the country. Cumulative wind installations versus targets in India, GW
l The largest state-owned utility 140
NTPC has floated an Expression Finally, addressing land availability
of Interest for shortlisting challenges for onshore wind is
suitable land sites from seven critical. Significant delays are 60
windy states to set up wind experienced regarding the lack of 35.1 37.5 38.6 40.1
26.7 30
projects. proper strategy for inter-state Right 16
of Way and attaining defence and
l NTPC and coal mining company forest clearances. Provisioning 2010 2015 2018 2019 2020 2021 2022 Total wind Offshore
target target wind target
NLC India have begun bidding support for land can open up the by 2030 by 2030
Installations-all onshore wind
3. In seven states- Gujarat, Himachal Pradesh, Karnataka, Kerala, Rajasthan, Tamil Nadu and Uttar Pradesh. See: https://pib.
gov.in/PressReleaseIframePage.aspx?PRID=1788011 Source: GWEC Market Intelligence; NIWE

Markets to Watch
Through repowering, India can add

substantial wind capacity while
optimising the utilisation of existing
wind-rich and consented sites.
while optimising the utilisation of strongest resource is found off and the demand from large C&I blended finance and Green/
existing wind-rich and consented Tamil Nadu, while good resource entities. Masala Bonds are likely to boost
sites. Similarly, development of less is also available off Gujarat. In availability of finance for
windy sites by advancing support March 2022, the MNRE conducted Preparing a long-term non-solar renewable energy projects,
for suitable wind turbine technology a stakeholder consultation RPO trajectory specific to offshore including offshore wind and
is likely to be beneficial. meeting and proposed the wind and offering schemes such as onshore greenfield and brownfield
initiation of offshore wind leasing production-linked incentives for projects.
Regarding offshore wind auctions from H2 2022. Learnings domestic offshore wind
potential, World Bank-Group from countries in Europe point to manufacturing could be
ESMAP has mapped 174 GW of the promising role of offshore considered. Apart from this, a
4. https://documents1.worldbank.org/curated/
fixed and floating offshore wind wind in supporting India’s growing pool of innovative en/116871586892855375/pdf/Technical-Potential-for-
potential off India’s coastline; the National Green Hydrogen mission financing mechanisms such as Offshore-Wind-in-India-Map.pdf

126 GWEC.NET
Markets to Watch
Brazil
2021 was a challenging year for GW in 2011 to 21 GW by January The prospects for investments in
the wind energy sector in Brazil, 2022. Today, wind is the second- the country remain positive,
largely due to the COVID-19 largest source of power generation anchored by a regulatory
pandemic, but it also brought relief in the country, making up 11% of apparatus and solid growth of the
with signs of economic recovery. the electricity matrix. Three factors bilateral market for wind energy.
According to the national statistics were decisive for this growth: First, According to the Brazilian Wind
agency and Central Bank, Brazil’s the regulatory framework for Energy Association (ABEEólica),
GDP grew 4.6% in 2021, with a auctions facilitated procurement of sector investment is expected to
direct impact on electricity wind energy at competitive prices; reach $5.8 billion in 2022, with up
consumption which increased and second, financing design to 5 GW in the pipeline for
4.1% from the previous year. focused on national content installation this year. EPE (the state
provided Brazil with a solid wind Energy Research Office) estimates
Last year, wind energy reached a industrial base, with capacity to investments of around $59 billion in
milestone of 20 GW of installed produce enough turbines to install centralised power generation and
capacity in Brazil – equivalent to around 5 GW per year. another $20.2 billion in
70% of all wind power capacity in transmission and substations from
Latin America – after more than 3 The third factor is external: Due to 2020 to 2029.
GW was installed in 2021 alone. changing weather patterns and
This record growth was due to a drops in reservoir levels for The next frontier: Offshore wind
confluence of factors, including hydropower generation, there is 2021 was a milestone for the
economic recovery, increase in increasing uncertainty around the beginning of offshore wind
demand for electricity and role of hydropower in the implementation in Brazil, with
efficiencies from a more electricity matrix. Last year, Brazil GWEC acting with ABEEólica to
consolidated wind energy industry. experienced the worst hydropower support the development of a
The year also marked the arrival of crisis in the last 91 years, making regulatory framework for the
new frontiers for wind energy in wind the locomotive of the sector. By the start of 2022, the
the country in the form of offshore expansion of the Brazilian electric long-awaited Decree No.
wind, production of green system. Generation reports from 10,946/2022 was published,
hydrogen and regulation of hybrid last year reflect that wind even providing for the transfer of
projects. supplied 100% of the entire physical spaces and the use of
Brazilian Northeast’s electricity natural resources to generate
Wind energy in Brazil has been demand and even had a surplus, electricity from offshore plants. The
marked by virtuous growth over according to the National System document, which comes into force
the last decade, jumping from 1 Operator (ONS). in June 2022, sends a positive

Markets to Watch
signal to the market to begin in 2023. Until then, there is much transition, with a view to significant auction pipeline. In
getting the first offshore wind work to be done, from upgrading diversifying the power matrix. addition to the regulated
projects up and running. port infrastructure, building out environment, there is no doubt that
transmission, increasing public New business models are wind energy is taking off in the
Investors now have their eyes on institutional resourcing and emerging that will continue to bilateral market. From 2018, the
Brazil, reflected in the licensing advancing the implementation of a attract investor interest. Hybrid free energy market has been
requests for more than 80 GW in “one stop shop” concept for projects which co-locate wind and contracting around 4 GW of wind
offshore wind projects submitted to permitting, among other solar generation was the subject of energy per year. The future of
the Brazilian Institute of the regulations that will be dealt with the recent Normative Resolution demand in the bilateral market,
Environment and Renewable Natural through ordinances and 954/2021. There are also however, will depend on the
Resources (IBAMA). This is just a resolutions. discussions about hybrid projects progress of market opening and
fraction of the technical resource combining storage, offshore wind purchases through auctions.
potential in Brazil, which is more than Perspectives on future growth and hydrogen. The offshore wind
700 GW, according to EPE’s For the next decade of wind decree already allows for the As indicated by EPE’s Ten Year
roadmap. EPE further provides a energy growth to be as virtuous as production of electricity via Energy Expansion Plan, wind
conservative forecast that by 2050, the last, it is essential that wind technological islands, giving space energy in Brazil is set for
Brazil will reach 16 GW of installed energy plays a central part in the to projects where offshore wind considerable growth in this
offshore wind capacity offshore, with country’s energy, economic and directly produces green hydrogen. decade, and is on-track to
a 20% CAPEX reduction. environmental planning. Strategic become a central source for the
planning and public policies need Brazil’s continued economic expansion of the Brazilian
The expectation is that the first to follow the move towards a clean, growth will also spur increased electricity matrix alongside solar
offshore wind auction will be held competitive and fair energy demand for clean electricity and a power.

128 GWEC.NET
Markets to Watch
Colombia
Colombia has received mid-2022 have created a sense of under the clean growth pillar of the
international recognition for its promise for the Colombian wind national ‘Commitment to the Future
commitment to renewable energy, industry. The public and private of Colombia’ plan, both public and
including from the UN and IRENA, sector are working collaboratively private investment is needed to
among other bodies. The country to introduce Colombia into Latin push growth of the renewables
has promoted a strong American markets as a leader of sector.2 Of the $3.1 million
transformation of the energy sector wind. This year will see the assigned for electricity projects in
in technical, regulatory, development of wind projects this plan, more than one-third will
infrastructure and market procured from 2019 onwards provide funding for five wind
dimensions, with a view to making pace and contributing power projects – the highest
advancing renewable energy positively to the renewable energy proportion of all electricity
project development. mix. projects, followed by transmission
projects.3 The investment in those
Security of supply has become a During the COP26 conference, five wind projects will in turn
growing issue, as periods of low Colombia’s president reiterated generate around 4,300 local jobs
rainfall have impacted the role of the country’s commitment to to support Colombia’s green
hydropower in the electricity mix, reducing GHG emissions by 51% recovery.4
which provides more than two- by the year 2030, compared to
thirds of the country’s electricity.1 2014 levels, and its pledge to reach The prioritisation of wind in
This challenge has become more net zero by 2050. Colombia Colombia’s recovery scheme
pertinent since 2018, reiterating houses large regions with indicates the appetite for
the need for alternative energy untapped onshore and offshore accelerating sector development,
sources including wind to ensure wind potential which needs to be after more than 1 GW of wind
sustainable power supply.1 utilised in order to reach these capacity was awarded by the
goals. Mining and Energy Planning Unit
The announcement of a new (UPME) in 15-year PPAs under
energy transition law, progress on 2022: A growth year for the the renewables auction in 2019.
the development of the La Guajira Colombian wind market By the end of 2022, it is
wind farm and the prospect of a Considering the level of post- anticipated that over 1.7 GW of
fourth renewable energy tender in COVID-19 recovery called for installed wind capacity will be in
1. https://www.iea.org/countries/colombia
2. https://www.windpowermonthly.com/article/1720453/colombia-prepares-wind-power-boom
3. https://www.iea.org/policies/13979-commitment-to-the-future-of-colombia-clean-growth-mines-and-energy?Residential=&page=208
4. The five wind projects are: 50 Camelia; 202 Windpeshi; 44 Acacias 2; 209 Betha; and 210 Alpha. See: https://compromisoporcolombia.gov.co/#containerCompromisosArticle.

Markets to Watch
place as a result of auctions to reported, indicating that there is hydrogen is a key vector for the assessments, seabed use,
date.5 indeed growth on the horizon. decarbonisation of so-called permitting and other licensing
Overall, last year saw record hard-to-abate sectors such as procedures. The proposed
In 2020 Vestas was commissioned amounts of investment into Latin transport and heating. actions should be urgently
for two big projects in Colombia, America, with Colombia having initiated to enable the expected
gaining a market position after attracted around $800 million in Offshore wind’s capability to volumes by the end of this
multinational Elecnor and energy renewable energy investment.9 produce green hydrogen can be decade.
generator Isagen placed a 20 MW beneficial for the wider agenda of
order for the La Guajira wind farm.6 Linking wider policy to the decarbonisation. Colombia Onshore and offshore wind mixed
The wind farm was inaugurated in renewable sector recently presented a public with the other mature renewable
January 2022 – the first to reach this In mid-2021, President Iván Duque consultation for the draft Offshore energy technologies available in
milestone in 17 years.7 The Minister Márquez demonstrated leadership Wind Development Roadmap, in Colombia will allow for a
of Mines and Energy in Colombia in driving the energy transition by which it builds up to 1 GW of diversified and reliable renewable
has made optimistic remarks about making regulatory modifications to offshore wind by 2030, 3 GW by energy mix. Parallel to scaling up
the La Guajira wind farm being one the legislation on power 2040 and 9 GW by 2050 in a the deployment of wind, the
of 14 projects to be developed in generation from non-conventional vest-case scenario. This roadmap government must also steer the
the coming three years.8 renewable energy sources is paving the way for embracing buildout and reinforcement of grid
(NCRS). The Energy Transition law offshore wind, outlining the infrastructure to ensure grid
An order for an undisclosed classifies both blue and green regulatory landscape of access and evacuation capacity for
project of 504 MW has also been hydrogen as NCRS.8 Green environmental and social large-scale renewables projects.
This is especially the case in the
5. https://www.windpowermonthly.com/article/1720453/colombia-prepares-wind-power-boom northeastern region of La Guajira,
6. https://www.vestas.com/en/media/company-news/2020/vestas-enters-new-market-with-an-order-in-colombia-c3196448
7. https://renews.biz/75085/colombia-to-inaugurate-first-wind-farm-for-17-years/ where there is excellent wind
8. https://www.vestas.com/en/media/company-news/2020/vestas-wins-first-enventus-order-in-latin-america-for-a-c3263319 resource and a hub of project
9. https://www.bnef.com/shorts/13469?query=recommendations
10. https://investmentpolicy.unctad.org/investment-policy-monitor/measures/3732/colombia-enacts-new-legislation-on-electricity-generation-activities-from-renewable-sources activity.

130 GWEC.NET
Markets to Watch
South Africa
South Africa is the largest wind in 2020 foresees 35-40% of state-owned utility Eskom as well
market in Sub-Saharan Africa in renewable electricity share by as committing to regular
terms of installed capacity. As 2030, requiring an additional 20.4 procurement of large-scale
Africa’s third-largest economy GW of renewable energy renewable energy projects.
and one of the most populous capacity in this decade.
nations on the continent, South In September 2021, South Africa
Africa has around 3,024 MW of Timely implementation of these submitted an updated NDC to the
wind capacity connected to its strategies will be necessary to UNFCCC, following the
grid. Despite great potential for decarbonise the power system in recommendations of the
wind and renewable resources, South Africa, and will include Presidential Climate Commission
South Africa’s energy mix is addressing some of the financial (PCC). The PCC was established
largely based on fossil fuels, with and operational challenges of the as a multi-stakeholder group to
nearly 90% of its electricity
generation derived from coal and
peat, as of 2020. Wind is the South Africa’s electricity generation by technology, 2020 (GWh)
largest source of clean power,
providing 2.5% of electricity Biofuels
generation. 182
Oil Wind
5,937
442
The country’s push for universal Hydropower Solar PV/
electricity access (access is 5,490
Solar Thermal
currently at around 85% of the Nuclear 5,031
12,374
population) and renewable
energy ambitions are
encouraging a shift towards clean
electricity. In the master strategy
Integrated Resource Plan (IRP GWh Coal
210,002
2019-2030), renewable energy
takes on a primary role in the
power mix. The Low Emission
Development Strategy published
1. https://data.worldbank.org/indicator/EG.ELC.ACCS.
ZS?locations=ZA; https://www.carbonbrief.org/
the-carbon-brief-profile-south-africa Source: IEA

Markets to Watch
advise on South Africa’s plans for

mitigation and adaptation to
climate change, the development
of a low-carbon economy and a
just and inclusive transition. The
updated NDC pledges to limit
GHG emissions to 350-420
MtCO2e by 2030 – a 12-31%
reduction from its previous NDC
in 2016 – and has been rated by
Climate Action Tracker as “Almost
Sufficient” for a 2°C global
warming pathway.2 The updated
NDC also underscores South
Africa’s commitment to reach net
zero by 2050, although this target
is yet to be legislated.
Growing political support for the

clean energy transition
South Africa’s reliance on coal
means around 80% of its GHG
emissions come from the energy
sector, making the phaseout of
coal vital for climate action.
Following a milestone agreement
at COP26 in 2021, South Africa is
set to receive $8.5 billion to
decommission, repurpose or
repower coal-fired power stations
and invest in renewable energy
within the decade in order to
2. https://climateactiontracker.org/countries/south-africa/
targets/
3. https://ukcop26.org/political-declaration-on-the-just-
energy-transition-in-south-africa/; https://www.
theafricareport.com/143773/cop26-south-africa-to-
receive-8-5bn-to-stop-using-coal/
GWEC.NET
Markets to Watch
achieve its carbon targets and untapped, presenting an attractive possible, with supportive intensive industries, could unlock
NDC.3 opportunity to IPPs, investors and frameworks which allow for further deployment.5
community stakeholders. wheeling and the signing of direct
In 2011, the South African PPAs with IPPs without ministerial The pipeline of wind power has
government launched the Recent announced reforms approval. created significant jobs owing to
Renewable Independent Power include the unbundling of Eskom strong local manufacturing of
Producer Procurement by the end of 2022, which will be Stable pipelines of wind projects components like towers and
Programme (REI4P) aimed at critical for providing an can be created through transformers. While this is a
bringing additional megawatts adequately resourced and continuous and regular capacity positive step for growth of the
onto the country’s electricity independent transmission entity, procurement, including a long- local economy, a lack of
system through private sector as well as a more reliable offtaker term and on-time auction predictability for future
investment in wind, solar, biomass to power generators. There are schedule, as well as a more renewables procurement has
and small hydro. To date the also new rules in Schedule 2 of robust REI4P process which can introduced some uncertainty to
REIPPP has resulted in 46 wind the Electricity Regulation Act minimise delays for selection and the local value chain. A more
projects awarded to various which exempt developers from contract completion.4 straightforward approach to local
developers. The latest Bid applying for any licensing with content requirements, accounting
Window 5 in October 2021 the National Energy Regulator of In addition, grid constraints in for existing and planned local
attracted bids amounting to South Africa (NERSA) for three provinces including the manufacturing capacity as well as
nearly four times the capacity embedded generation projects Northern Cape have strongly training and financial provisions
awarded, resulting in a record 12 up to 100 MW, and will further curtailed the rollout of shovel- for the local workforce, can help
wind farms winning bids; the 12 incentivise renewable energy ready projects in these areas, build a more sustainable local
projects are expected to reach development. affecting investment certainty in industry.
COD within three years. new renewable projects. An
But the South African energy updated Generation Connection South Africa’s leadership position
Accelerating deployment of market still has key challenges to Capacity Assessment (GCCA) in wind energy on the continent is
wind power overcome. Historically, regulation report is due to be released in Q1 set to continue for years to come.
Given South Africa’s strengthened has favoured legacy systems 2022 to provide more clarity on With strong local demand, shifting
commitment to phase out coal based on fossil fuels. This means capacity planning and priorities to sustainable energy
and adopt larger shares of that regulatory changes will be transmission connections. and promising policy signals,
renewables into its electricity mix, necessary to support the Meanwhile, new wind resource wind power is set to drive the
it is no surprise that the latest transition to cleaner sources. assessments in provinces like phasing out of coal in South Africa
REI4P round received 38% more Investors and financiers require Mpumalanga, historically home to and contribute to the creation of a
bids compared to the previous as much policy certainty as fossil fuel generation and energy- low-carbon economy.
one, despite the challenges
associated with the COVID-19 4. https://www.pv-magazine.com/2021/09/30/reippp-one-of-the-worlds-best-renewable-energy-tenders-but-theres-room-for-improvement/; https://coalition.irena.org/-/media/Files/
pandemic. South Africa’s vast IRENA/Coalition-for-Action/Coalition-for-Action-BusinessInvestors-GroupScalingRenewableEnergyInvestmentSouth-AfricaDec2021.
pdf?la=en&hash=E73566B496FEF275568627C7F95968944ED789F9
wind resource is still largely 5. https://www.engineeringnews.co.za/article/sawea-chair-sees-100-mw-reform-unlocking-wind-investments-in-mpumalanga-2022-01-28

Markets to Watch
Egypt
As the world prepares for COP27 in the urgency of the energy transition foreign direct investment (FDI) and
Sharm El Sheikh in November 2022, in the MENA region and worldwide. economic liberalisation are spurring
the summit marks an occasion to increased electricity demand.
examine Egypt’s ongoing energy Encouraging a shift to wind and Meanwhile, there is growing national
transition. Governments will be renewable energy interest in diversifying the energy
looking closely at the host country’s Egypt has a long history as an oil mix and capitalising on renewable
progress towards meeting its and gas producing country, as the energy potential in the country.
intended NDC submitted in 2017. largest non-OPEC oil producer in
Africa and one of the largest The government’s current aim is to
Egypt’s NDC does not include a exporters of gas.2 It also subsidises reach 42% of renewables in the
quantifiable GHG emissions domestic fuel supplies and power mix by 2035, which will
reduction target, but does pledge electricity prices, although include 14% wind, 21% solar PV, as
“widespread diffusion of locally- electricity tariffs have been well as hydropower and
appropriate low-carbon energy reformed in recent years to be more concentrated solar power (CSP). But
production technologies, with cost-reflective. While its known it should be noted that Egypt has far
substantial reductions in energy natural gas reserves are only a more potential – a recent IRENA
intensity.”1 It also estimates the fraction of those in Iran, Qatar or report found that the country could
investment required for adaptation Saudi Arabia, Egypt is the fastest- generate up to 53% of its electricity
and mitigation goals by 2030 at $73 growing exporter of LNG in the from cost-effective renewable
billion, with an expectation of MENA region, due largely to sources by 2030 with a targeted
financial contribution from geographic proximity to the long-term strategy.5
developed countries. Mediterranean and Europe.3
Egypt boasts impressive onshore
The stakes are high for Egypt to As of 2019, roughly 90% of Egypt’s wind potential which can be
demonstrate leadership on climate electricity generation is derived exploited to support national
change mitigation and phasing out from natural gas and oil, followed by renewable energy ambitions.6
fossil fuels , precisely as global hydropower, wind and solar energy. Several locations in windier regions,
ambition on climate action needs to But population growth, increased in particular along the Gulf of Suez
ramp up. With tremendous wind
energy potential, the government 1. https://www4.unfccc.int/sites/NDCStaging/pages/Party.aspx?party=EGY
2. https://theenergyyear.com/market/egypt/
has an opportunity to raise its 3. https://www.mei.edu/publications/egypts-future-lng-market
renewable energy ambitions, align 4. https://www.trade.gov/country-commercial-guides/egypt-electricity-and-renewable-energy
5. https://www.irena.org/newsroom/pressreleases/2018/Oct/Egypt-Could-Meet-More-than-50-percent-of-its-Electricity-
with international net zero pathways Demand-with-Renewable-Energy
and make a clear statement about 6. “Renewable Energy Outlook Egypt”, IRENA. 2018.

134 GWEC.NET
Markets to Watch
Private sector driving onshore These two wind IPP projects taken
Electricity generation in Egypt by source, 2019 (GWh) wind growth together with the 1.4 GW Benban
Oil The recent growth of onshore wind solar IPP complex near Aswan,
25,793 in Egypt has been driven by policy demonstrate that Egypt can now
frameworks such as renewable benefit from international
Solar PV energy tenders for build-own- collaboration to expand its installed
1,471
operate (BOO) contracts. However, renewable energy capacity with a
Wind there is now a long-overdue shift variety of stakeholders including
3,689
towards implementation of a private developers, utility companies,
Hydro IPP wind market. industrial conglomerates, private
13,121
investors and international financial
GWh In 2015, Egypt’s Electricity institutions. The growth of the
Transmission Company (EETC) onshore wind sector will provide
opened a tender for the tremendous opportunity in creating
Natural gas development of a 250 MW wind clean energy jobs in and around
150,205
power installation by the private communities hosting wind projects.
sector in the West Nile region.10 In
2019, an international consortium As a sign of further innovation, in
Source: IEA including France’s ENGIE, Japan’s mid-2021 Siemens Energy signed
Toyota Tsusho Corporation and an MOU with the Egyptian Electricity
coastline, feature wind speeds of The first phase of Egypt’s Egypt’s Orascom Construction was Holding Company (EEHC), a
between 5-11 m/s at 100-metre hub commercial scale wind deployment established to develop the first state-owned entity which owns most
height. The National Wind Atlas involved a series of utility-scale private wind farm in Egypt with a power generation and distribution
assesses that the East and West Nile turnkey wind projects totalling 545 capacity of 262.5 MW. At the end of companies in Egypt. The
areas alone could host more than MW near Zafarana, funded by soft 2021, Lekela Power (a joint venture cooperation will focus on developing
31 GW of wind capacity.7 Other loans to the state from Germany, between Mainstream Renewable a domestic green hydrogen
promising terrestrial wind resource Spain, Japan and Denmark between Power and Actis) commissioned the ecosystem based on renewable
areas are located in more remote 2001-2010; these projects were then 250 MW West Bakr wind farm; NREA energy, beginning with a 100-200
regions of the country, farther from handed over to and operated by supported this by signing an MW electrolyser pilot project and
demand centres. World Bank Egypt’s New and Renewable Energy usufruct agreement with Lekela establishing an enabling regulatory
Group-ESMAP estimates technical Authority (NREA). Between 2010 and Power to procure access to the land
7. https://www.trade.gov/country-commercial-guides/egypt-renewable-energy
offshore wind potential of 166 GW 2021, installed wind capacity grew for the project. The two IPP wind 8. https://documents1.worldbank.org/curated/en/465001586847822299/pdf/
in Egypt’s Exclusive Economic to 1,638 MW, primarily via turnkey projects include a 20-year PPA with Technical-Potential-for-Offshore-Wind-in-Egypt-Map.pdf
9. Assessment of Private Sector Participation in the Power Sector of Egypt,
Zone (EEZ), including 27 GW of EPC contracts commissioned by the EETC to supply electricity to the World Bank, 2014; https://www.iea.org/countries/egypt; NREAMeter, 10th
fixed-bottom offshore wind and 139 NREA, around a third of these national grid, with turbines from Periodical, NREA, 2021.
10. https://www.iea.org/policies/5901-egypt-renewable-energy-tenders-build-
GW of floating offshore wind comprising independent developer Siemens Gamesa Renewable own-operate-boo-contracts https://www.iea.org/policies/5901-egypt-
potential.8 projects.9 Energy. renewable-energy-tenders-build-own-operate-boo-contracts

Markets to Watch
and certification environment. 12
If the Government of Egypt and its

agencies, including the Ministry of
Electricity and Renewable Energy,
EETC and NREA, continue to meet
their contractual obligations then we
can anticipate that other developers,
utilities and investors will also seek
entry to the Egyptian wind market.
Development finance institutions
(DFI) may continue to play an
important role in providing attractive
financing terms that help to mitigate
important risks, such as government
liquidity, foreign exchange
convertibility, political risk insurance
and other areas.
The Egyptian government needs to

attract sufficient private capital to
meet its aggressive plans to expand
the renewable energy share of its
power mix. The success of these
wind IPP projects as a result of
collaborative private sector efforts
will provide future investors with
greater confidence in investing in
wind projects to meet Egypt’s
burgeoning electricity demand
growth.
The growth of the onshore wind sector will provide

tremendous opportunity in creating clean energy jobs 11. https://dailynewsegypt.com/2019/03/13/nrea-lekela-
sign-usufruct-agreement-to-establish-wind-farm/
in and around communities hosting wind projects. 12. https://press.siemens-energy.com/mea/en/
pressrelease/siemens-energy-supports-egypt-develop-
green-hydrogen-industry
GWEC.NET
Markets to Watch
Exploring Algeria Uzbekistan Oman Peru
new markets:
Development stage Development stage Development stage Development stage
Since 2014, 10 MW installed wind capacity Two potential areas have been identified for The first 50 MW Dhofar wind farm, developed Around 20.5 GW of feasible onshore wind
exists at Adrar in Algeria, as a pilot project wind installations by central authority by Masdar and funded by Abu Dhabi Fund for potential is available in Amazonas, Ancash,
funded by state utility Sonelgaz. Two 20 Uzbekenergo, in the Navoi region and Development, is in operation. A competitive Arequipa, Cajamarca, Ica, La Libertad,
Onshore
MW wind farms were expected to be southern Karakalpakstan. In 2021, the first tender for a 100 MW project in the southern Lambayeque, Lima and Piura regions. Around 7
constructed during 2014-2015. To meet PPA-based competitive wind tender awarded part of Oman is due. Projects are planned in wind projects are in progress: In 2021,
earlier wind targets of 2016-2030, studies development of the 100 MW Nukus wind seven locations, under the delayed ‘Wind Concessions were granted to a total of 528 MW
were supposed to be undertaken to identify 2023 IPPs’ scheme to be now launched in of wind and solar power projects, while
Wind
farm in the latter region. As of 2021, 4 GW
suitable sites in 21 identified areas across 2025 under the rebranded ‘Wind 2025 IPPs’ temporary concessions were granted to 1.9 GW
of total wind project agreements are signed,
Algeria by Sonelgaz’s electricity generation for MW wind-based IPP procurement. of wind and solar capacity, as per the Ministry
including 1 GW in Bukhara and Navoi region
subsidiary, Shariket Kahraba wa Taket of Energy and Mines.
and 1.5 GW in Karakalpakstan region, both
Moutadjadida (SKTM). Political support
by ACWA Power, and 1.5 GW Zarafshan A National Energy Strategy encourages Political support
Political support wind farm by Masdar . zero-carbon fuels and green hydrogen. Peru has a commitment to reach 15% of
GWEC Market Intelligence is
In June 2021, the government refreshed Oman’s ‘2040 Vision’ aims for renewables to renewables in its energy mix by 2030 and
monitoring activities in 46 targets to 15 GW renewable electricity Political support reach 39% of total energy supply, with an reduce emissions by up to 40% by 2030. A
countries on a regular basis to generation by 2035, i.e. 1 GW installed per The country has devised a low carbon energy interim goal of 20% by 2030. Strategic energy proposed bill provides investment incentives for
year. The earlier target from 2016, which strategy to boost renewables for diversified partnerships outline large green hydrogen and renewable energy, including extending
document the opportunities and aimed for 22 GW of renewables by 2030 energy mix. The Ministry of Energy has set a 3 ammonia production plans via wind and solar accelerated depreciation from 2025 to 2025.
progress of taking wind global, (including around 5 GW of wind), was GW wind target by 2026 and plans to raise it generation. The Wind Atlas Project is plans Alternative mechanisms such as green bonds are
and supporting governments in deemed unachievable. In 2021, the to 5 GW by 2030. The overall target is 25% mapping of windy sites at 80m hub height to being explored to fund renewable projects. After
government created a national renewable renewables in the energy mix by the end of gather bankable data and encourage the fourth renewables auction in 2016, the
developing appropriate policy energy company, SHAEMS, to conduct 2030. The country is developing a legal investments. An electricity spot market is government plans to announce 2 GW of
frameworks. renewables tender activities and foster framework for renewables development, liberalising power procurement. renewables auctions in 2022.
foreign investment in the sector, under the including adoption of the Law on the Use of
authority of the Ministry of Energy Transition Renewable Energy Sources and the Law on Challenges Challenges
The four selected countries – and Renewable Energies (METRE).
Public-Private Partnerships for foreign
High capital costs and a lack of procurement Grid infrastructure expansion is needed to
timelines are holding the ‘Wind 2025 IPPs’ accommodate new renewables capacity.
Algeria, Uzbekistan, Oman, and Challenges
investment.
scheme back. There is an unavailability of Regulatory measures to ensure system stability
Peru – represent countries with Algeria’s economy is heavily dependent on advanced technologies in the country for wind are also required, and there is a lack of clear
Challenges
high onshore wind potential but fossil fuels and funded by oil and gas export
There is a lack of utility-scale wind project
measurements. policy for incentivising investment in renewables.
revenues. Lack of precise wind resource
varying political support and mapping and absence of a local wind procurement and a high cost of power Next milestone Next milestone
targets to date. Still, in all four supply chain makes wind energy initially generation. Inadequate economic support Set clear wind policy with targets and a robust Set wind targets to harness the 20 GW of
expensive, with limited investments and (such as provision of import duty waivers for regulatory framework. Provide initial subsidies feasible onshore wind potential to meet Peru’s
countries there is an increasing experience in the sector in the country to wind components) or financial incentives are and grants for the first generation of rising energy demand. Formulate policy and
awareness that wind can provide a date. needed to stimulate growth. large-scale projects. Similarly start market regulatory frameworks, possibly with annual
scalable, cost-competitive and exploration in light of huge offshore wind wind auction pipelines, and dedicate investment
Next milestone Next milestone technical potential, which is around 61 GW and resources for grid expansion.
efficient solution for renewable Dedicate funding for precise wind resource Utility-scale wind procurement and local fixed and 118 GW floating offshore wind.
energy. mapping, procurement scheme, and wind skill-building and public awareness is needed
workforce training programme to scale up for economies of scale. Although Uzbekistan
market readiness. Raise foreign investments holds around 520 GW of moderate technical
and market confidence with a clear policy wind resource, detailed techno-economic
and regulatory framework, grants and risk studies of wind sites are required.
mitigation guarantees, as well as financial
and tax incentives for supply chain
development.

Markets to Watch
Exploring Sri Lanka Azerbaijan Australia Turkey
new markets:
Development stage Development stage Development stage Development stage
A total 92 GW (55 GW fixed and 37 GW Consultation will begin soon for a draft With an estimated 4,963 GW (fixed 1.6 TW In 2018, the 1.2 GW capacity YEKA tender was
floating) technical offshore wind potential roadmap to develop offshore wind energy, and floating 3.4 TW) offshore wind potential, postponed due to immature tender conditions
exists in Sri Lanka, according to World led by World Bank-IFC and focusing on a the opportunity in Australia is huge. Work has and dearth of site data. A roadmap for offshore
Offshore
Bank-ESMAP. There is a World Bank-driven demonstration project followed by low/high begun on the environmental assessments for wind is underway in Turkey, led by World
offshore wind roadmap underway since late growth scenarios. Saudi Arabian utility the 2.2 GW Star of the South wind farm. There Bank-ESMAP, with industry consultation
2020, with a focus on the Gulf of Mannar, ACWA Power has signed an MoU to develop are more than 10 projects proposed in the scheduled for this year.
which will be open for consultation and pipeline, with a combined capacity of over 25
Wind
offshore wind in Azerbaijan. SOCAR and
commentary this year. GW; this includes Oceanex plans to develop Political support
Technip Energies have signed a cooperation
>9 GW of floating wind and Copenhagen Turkey aims to add 20 GW of wind energy by
agreement to work on a joint floating offshore
Political support Energy’s 3 GW project within Geographe Bay. 2030. A roadmap by the Izmir Development
wind pilot project for powering upstream Agency to promote offshore wind development
Sri Lanka updated its NDCs in July 2021,
committing to achieve 70% renewable operations in Azerbaijan’s sector of the Political support estimated Turkey’s total offshore wind potential
GWEC Market Intelligence is energy in the electricity generation mix by Caspian Sea. The Offshore Electricity Infrastructure Bill at 70 GW. An Offshore Wind Energy
monitoring activities in 46 2030, carbon neutrality in electricity passed in 2021, with a complementing Association (DÜRED) has been established to
generation by 2050 and no new coal Political support Offshore Electricity Infrastructure (Regulatory bring the energy and maritime sector together
countries on a regular basis to power capacity. Offshore wind can play a Plans are in place to generate 30% of Levies) Bill 2021, designates offshore wind and to drive investment in offshore wind.
document the opportunities and role in the country’s transition from coal and electricity from renewables by 2030 and areas in Commonwealth waters and imposes
fossil fuels. reach net zero emissions by 2060, with duties on regulated entities to recover Challenges
progress of taking wind global, significant ambitions in developing hydrogen. regulatory costs. State interest is high: Victoria Uncertainty regarding financing could mean
and supporting governments in Challenges plans to reach 2 GW of offshore wind by longer lead times for offshore wind projects,
There are no offshore wind framework or 2028 and 9 GW by 2040. The Energy while a preference for building more onshore
developing appropriate policy target in place currently. Bankability of
Challenges
Innovation Fund will fund the initial wind could push back commercial scale projects
Azerbaijan lacks offshore wind-related policy,
frameworks. projects may be a challenge due to currency including a legal and regulatory framework, development of three offshore wind projects. to the 2030s.
risk, offtaker risk, legal risk and performance enabling infrastructure and a support The Victorian government has earmarked
on debt-to-equity ratios. Projects may be of $1.08 billion for boosting decarbonisation via Next milestone
The four selected countries – Sri a smaller scale than other countries in the
mechanism for procurement.
offshore wind and green hydrogen. Dedicated offshore wind targets within the wider
Lanka, Azerbaijan, Australia and region, and transmission buildout will be
Next milestone
energy transition strategy are needed, followed
required to enable offshore wind. Challenges by concrete offshore wind legislation and policy
Turkey – represent markets with With an estimated 157 GW technical offshore Currently there are inadequate regulations and formulation. A support mechanism for the initial
high offshore wind potential but Next milestone wind potential and high corporate demand permitting guidelines for set of offshore wind projects will also help to
for electricity, offshore wind has great seabed leasing, port refurbishment and grid kickstart the sector.
varying political support and More detailed resource and zonal
potential. Clear offshore wind vision and
assessment is required, in addition to a infrastructure development. Federal ambition in
targets to date. Still, in all four high-level vision of offshore wind’s place in targets to initiate public and private investor offshore wind is held back by support for
countries there is an increasing Sri Lanka’s energy mix. This should include a interest is needed, including an alignment of incumbent fossil fuels.
clear timeline for ambitions and capacity to offshore wind development with net zero
awareness that offshore wind can be installed. Dedicated efforts for grid and goals. Greater technical know-how Next milestone
provide a scalable, cost- port infrastructure development are also experience is also needed within government Plans to harness offshore wind should be
competitive and efficient solution required. bodies. incorporated into national decarbonisation
and energy planning goals, and not limited to
for renewable energy state level. Grid expansion and social
dialogue and benefit programmes are also
needed. programs. A clear, transparent and
streamlined leasing and permitting process will
also provide confidence to investors.

138 GWEC.NET
MARKET OUTLOOK 2022-2026
Market outlook 2022-2026
Global wind energy market

expected to grow by 6.6%
per year on average
Global outlook Vietnam and the two Nordic
l Aftera year in which net zero countries Sweden and Norway
commitments gathered global also agreed to stop the Green
New wind power installations outlook 2022-2026 (GW) momentum, coupled with Certificate system by the end of
renewed urgency for achieving last year, from 2022 onwards the
energy security, the market global wind power growth is
Onshore outlook for the global wind expected to rely primarily on the
Offshore 128.8 industry looks even more following market support
CAGR 6.6%
119.4 positive. The CAGR for the next mechanisms: (1) grid-parity
31.4
five years is 6.6%, even though scheme (mainly in China, where
102.4 105.7
100.6 24.5 the level of installed capacity for wind generated electricity will
93.6 8.7 13.5 2021 was the second highest in receive the same remuneration
12.5
history. as coal-fired power plants; (2)
21.1 PTC and ITC (US onshore and
l GWEC Market Intelligence offshore wind); and (3) wind-only,
expects that 557 GW of new hybrid, renewable and
72.5 91.9 89.9 92.2 94.9 97.4 capacity will be added in the technology-neutral auctions
next five years under current (Europe, Latin America, Africa &
policies. That is more than 110 Middle East and South East Asia).
GW of new installations each Since auction/tender
year until 2026. mechanisms have prevailed in
markets excluding China and the
l Achieving eligibility for FiT and US, challenges from previous
2021 2022e 2023e 2024e 2025e 2026e Green Certificates was the key auctions, including permitting
growth driver in the past two and market design, need to be
GWEC’s Market Outlook represents the industry perspective for expected installations of new capacity for the next five years. The outlook is years. But as the FiT support addressed to support growth in
based on input from regional wind associations, government targets, available project information and input from industry experts and schemes have been terminated the next five years.
GWEC members. An update will be released in Q3 2022. A detailed data sheet is available in the member only area of the GWEC
Intelligence website. in markets such as China and

140 GWEC.NET
Global onshore outlook was added last year, such a

l The CAGR for onshore wind in growth rate is extremely positive.
the next five years is 6.1%. The
expected average annual l Following an outstanding year,
installation is 93.3 GW. In total, new offshore installations in 2022
466 GW is likely to be built in are likely to return to the
2022-2026. 2019/2020 level, primarily due to
the reduction of installations in
l Inour previous year’s market China. However, market growth
outlook, we predicted that global is expected to regain momentum
onshore wind growth would slow from 2023, eventually passing
down in 2021 followed by flat the 30 GW mark in 2026.
growth in 2022 and 2023. This
was predominately in response l Intotal, more than 90 GW of
to China’s onshore wind market offshore is expected to be
entering the new era of grid added worldwide in 2022-2026.
parity and our expectation that it The expected annual average
might take another two years for offshore installations is 18.1 GW.
the country to reach the same
installation level as 2020.
However, we upgraded our
near-term forecast in this year’s
outlook due to the Chinese
government’s implementation
plan to reach the “30-60” targets
together with the renewable
development plans for 2021-
2025 released in 2021, as these
are likely to accelerate growth
from 2022 onward (for details,
see the Market to Watch-China).
Global offshore outlook

l The CAGR for offshore wind in
the next five years is 8.3%.
Considering that more than 21
GW of offshore wind capacity

APAC onshore markets and

offshore likely to take bigger
New wind power installations outlook 2022-2026 by region
MW and per cent, onshore and offshore
role to drive global growth
93,604 100,571 102,446 105,702 119,445 128,766 Offshore wind wind project is likely to be online
The global offshore market is in 2023. 11.5 GW of offshore wind
expected to grow from 21.1 GW in capacity is expected to be built in
9%
23% 5% 12% 7% 13% 2021 to 31.4 GW in 2026, bringing the next five years, making it the
8% 7% 21% 24% its share of new global installations largest offshore wind market after
5% 4%
1% 2% 6% 6% from today’s 22.5% to 24.4% by China and the UK in terms of new
18% 1% 3% 4% 4% 2026. In Asia, China will remain the additions.
6% 12% 1% 1% 3%
2% 8% 7% 3% largest contributor with 39 GW to
1% 1% be added in the next five years, Africa and the Middle East
2%
16% 8% 7% followed by Taiwan (6.6 GW), After a record year in new
14% 18% 17% 14% Vietnam (2.2 GW), South Korea installations in 2021, growth in this
14% (1.7 GW) and Japan (1 GW). In region is likely to slow down in
15% Europe, more than 28 GW of 2022 and 2023 mainly due to the
offshore wind capacity is expected delays of the first and second
to be built in 2022-2026, of which rounds of REIPPPP Bid Window 5
33% 46% 49% 47% 42% 41% 41% is likely to be installed in the auction in South Africa. However,
UK, primarily driven by the with projects awarded from those
commissioning of CfD Round 3 auctions coming online in South
projects, 15% in the Netherlands, Africa, a new installation record is
12% in France, 11% in Germany expected to be achieved in this
2021 2022e 2023e 2024e 2025e 2026e and 6% in Poland. In the US, thanks region in 2023 and the growth
to the target of 30 GW by 2030 of momentum is likely to be
Offshore Pacific Latin America Europe offshore wind released by the maintained during the rest of the
Africa, ME North America Asia ex China China Biden Administration, great forecast period. In total, 14 GW of
progress has been made in 2021. new capacity is expected to be
GWEC’s Market Outlook represents the industry perspective for expected installations of new capacity for the next five years. The outlook is
based on input from regional wind associations, government targets, available project information as well as input from industry experts and
With construction work already added in Africa/Middle East in the
GWEC members. An update will be released in Q3 2022. A detailed data sheet is available in the member-only area of the GWEC kicking off last November, the next five years (2022-2026), which
Intelligence website.
country’s first utility scale offshore is primarily driven by growth from

142 GWEC.NET
South Africa (5.4 GW), Egypt (2.2 Philippines, Laos, Thailand and
GW) and Morocco (1.8 GW) in Indonesia), as well as in central
Africa, and Saudi Arabia (1.3 GW) Asia (Uzbekistan and Kazakhstan).
in the Middle East. Southeast Asia and central Asia are
likely to make up 16% and 8% of
Asia excluding China the new capacity expected for this
Driven by the FiT cut-off, Vietnam region in the next five years.
made up 57% of new onshore
installations in this region in 2021, Pacific
but this growth is expected to slow 150 MW of new wind capacity was
down in 2022 and the market is commissioned in New Zealand in
unlikely to recover until the new 2021, making it the second highest
wind energy support mechanism year in history. However after
and PDP8 wind targets are another three projects, totalling 436
finalised by the government. India MW, come online in the 2022-2023,
had another tough year in 2021. there will be no more wind
The second surge of COVID-19 projects in the pipeline. Thus, 94%
prevented the region’s largest wind (or 7.3 GW) of projected new
market from making its expected installations in this region in the
recovery. With more than 20 GW next five years will come from
capacity (wind and hybrid/RTC/ Australia. With the planned
peak power) awarded by the end EnergyConnect link between
of 2021, the situation was expected South Australia and New South
to improve in 2022 compared to Wales coming online in 2023 and
2021. However, increased turbine strong renewable commitments
prices driven by the rise in from state-level government
commodity prices made investors (renewable energy zones) and
hesitate to commission wind from local mining and iron ore
projects that were awarded giants (green hydrogen), Australia
previously with very low PPA will continue to be a key onshore
prices. In total, less than 20 GW of wind market in this decade.
wind capacity is predicted to be
built in India in the next five years. Europe
Elsewhere in this region, growth is Our forecast for the next five years is
expected to come from Japan, in line with WindEurope’s Realistic
Pakistan and emerging markets of Expectation Scenario, which is
southeast Asia (mainly the based on the current policy context,

2022 is likely to be another record year the latest permitting status and
auctions/tenders results. 2022 is
for European onshore wind, driven by the likely to be another record year for
economic recovery from COVID-19 as well European onshore wind, driven by
the economic recovery from
as the expected strong market growth in COVID-19 as well as the expected
Germany, Sweden, Finland, France and Spain strong market growth in Germany,
Sweden, Finland, France and Spain
from the EU-27 and non-EU 27 from the EU-27 and non-EU 27
markets such as Turkey. After this
markets such as Turkey. peak, the average annual installations
in 2023-2026 will drop to the level of
17.4 GW but will remain stable. In
total, 87.7 GW of onshore wind is
expected to added in Europe in the
next five years. Of this amount 19.7
GW (22%) will come from Germany
– supported by the new German
coalition government’s spatial
planning reforms that aim to boost
onshore installation rates by
streamlining the permitting process
– followed by Spain (11%), France
(10%), Sweden (9%) and Finland
(7%). Russia’s invasion of Ukraine has
brought uncertainty not only for the
existing project pipeline (>4 GW
awarded), but also for new project
development in both markets. As the
invasion is still ongoing at the time of
finalizing our market outlook, GWEC
will monitor the situation closely and
provide an updated outlook for this
region in our Q3 Market Outlook.
Latin America
Latin America had a record year for
GWEC.NET
new installations in 2021 and new 2024, but can be expected to

additions are expected to be even bounce back in 2025, driven by the
higher this year. This strong growth PTC extension enacted in both 2019
momentum is primarily driven by and 2020. Onshore market growth
Brazil, where project development in the US after 2025 depends on
under the private PPA market whether the Biden administration’s
continues to bring new “blood” into Build Back Better Bill can pass the
a market that had hitherto been Senate as well as the tax incentives
driven by regulated public auctions. unveiled in the president’s 2022
However, annual growth in LATAM State of Union address. In total, 46.5
is likely to drop to 4-5 GW in the GW of onshore wind capacity is
period 2023-2026 following the expected to be added in the next
slow-down of installations in key five years in North America, of
markets such as Mexico and which 90% will be contributed by
Argentina as a result of an unhelpful the US and the remaining will come
policy environment and economic from its neighbour Canada.
instability. Colombia is projected to
be the largest onshore wind market China
in this region after Brazil, Chile and New onshore wind installations
Mexico in total added capacity in dropped by 39% in 2021 after the
the next five years. Chinese onshore wind market
entered the “subsidy-free” era at the
North America beginning of the year. Nevertheless,
In the US, the PTC will continue to GWEC Market Intelligence
be the primary driver supporting upgraded its onshore wind
US onshore wind growth in 2022- installation forecast for the 14th five
2025. 2022 is likely to be another year period (2021-2025) by 16%
strong year in new installations as compared with the Q1 2021
multi-GW onshore wind projects Outlook. This was mainly because
that got pushed back from 2021 to the government’s renewable
2022 and projects that started development strategies included in
construction in 2016 are still eligible the 14th five year plan have paved
for the full PTC rate if they can reach the way for reaching China’s “30-60”
the COD by end of 2022. Based on targets and the recently launched
the current PTC phase-down plan, power market reform is expected to
onshore wind installations in the U.S. support China’s renewable-led
are likely to decline in 2023 and revolution in the next decades.

Regional onshore wind and offshore wind outlook

New installations (GW)
19.2 19.9
18.3 18.1 17.6
16.6 17.0 4.0 4.1
5.8 7.9 14.4 14.1
13.9 13.4 0.6 0.9
11.9 3.1
5.4 4.7 4.7 0.7
4.3
1.8 1.8
3.4 3.2
9.7 0.5 1.2 0.2
13.4 12.0 8.7
8.5 7.6 0.3 2.4
1.6
1.3 0.9
2021 2022e 2023e 2024e 2025e 2026e 2021 2022e 2023e 2024e 2025e 2026e 2021 2022e 2023e 2024e 2025e 2026e
Latin America onshore North America onshore Europe onshore Africa onshore Middle East onshore
62.3
59.0 59.4 63.2

57.7 59.4
52.5
37.3 15.4
37.3
13.2
57.7 59.0
46.0 50.0 50.0 53.0 45.0 17.8
52.5 11.6
30.7 6.5
9.6 6.6
1.4 3.2 4.1 4.6 4.0 3.5 5.9
5.1 2.4 4.7
5.2 3.3 3.6 4.4 5.4 5.8 3.3 2.8 0.9 1.5 4.3
2021 2022e 2023e 2024e 2025e 2026e 2021 2022e 2023e 2024e 2025e 2026e
Other Asia Pacific onshore India onshore China onshore Asia offshore North American offshore European offshore

146 GWEC.NET
APPENDIX
Appendix
Global Wind Report 2022 - Methodology and Terminology

Data definitions and adjustments adjustments to new installations in 2022 edition, specifically for Latin regional or country wind associations,
GWEC reports installed and fully 2020 for China, Kazakhstan, Spain, America and Europe. alternatively from industry experts
commissioned capacity additions and United Kingdom, Italy, Poland, Ireland, and wind turbine manufacturers.
total installations. New installations are Panama and Peru. Latin America: South, Central America
gross figures not deducting and Mexico Used terminology
decommissioned capacity. Total All currency figures in $ are given in GWEC uses terminology to the best
installations are net figures, adjusted US Dollars. Europe: Geographic Europe including knowledge. With the wind industry
for decommissioned capacity. Norway, Russia, Switzerland, Turkey, transitioning certain terminology is
Definition of regions Ukraine not yet fixed or can have several
Historic installation data has been GWEC adjusted its definition of connotations. GWEC is continuously
adjusted based on the input GWEC regions for the 2018 Global Wind Sources for the report adapting and adjusting to these
received. GWEC made the Report and maintains these in the GWEC collects installation data from developments.
Acronyms
AEP Annual Energy Production DFI Development Finance Institution GW Gigawatt Mt Metric Tonnes
AI Artificial Intelligence DNSH Do No Significant Harm HSSE Health, Safety, Security, And MW Megawatt
APAC Asia-Pacific DSR Demand-Side Response Environment MWh Megawatt Hour
ASEAN Association of Southeast Asian Nations ECA Export Credit Agency HVDC High-Voltage Direct Current NDCs Nationally Determined Contributions
BAU Business As Usual EGAT Electricity Generating Authority of IEA International Energy Agency NFTs Non-Fungible Tokens
BESS Battery Energy Storage Systems Thailand IFC International Finance Corporation O&M Operation And Maintenance
BNEF Bloomberg New Energy Finance EEZ Exclusive Economic Zone IoT Internet of Things OEMs Original Equipment Manufacturers
BOEM Bureau of Ocean Energy Management EIA Environmental Impact Assessment IPCC Intergovernmental Panel on Climate OWSC Offshore Wind Service Contracts
(BOEM) EMDEs Emerging Markets and Developing Change PDP Power Development Plan of Vietnam
C&I Commercial And Industrial Economies IPP Independent Power Producers PEA Provincial Electricity Authority of
CAGR Compound Annual Growth Rate EMS Energy Management System IRENA International Renewable Energy Thailand
CAISO California Independent System EPC Engineering Procurement Construction Agency PPA Power Purchase Agreement
Operator ESG Environmental, Social, and Corporate IRP Integrated Resource Plan PV Photovoltaic
CAPEX Capital Expenditures Governance ISO Independent System Operator PTC Production Tax Credit
CBAM Carbon Border Adjustment Mechanism EU European Union kt Kilo Tonnes R&D Research And Development
CCER China Certified Emission Reduction EV Electric Vehicle kWh Kilowatt Hour RECs Renewable Energy Certificates
CCGT Combined Cycle Gas Turbine EVOSS Energy Virtual One-Stop Shop LCOE Levelised Cost of Energy REE Rare Earth Elements
CCUS Carbon Capture, Utilisation, And FDI Foreign Direct Investments LNG Liquefied Natural Gas ROI Return on Investment
Storage FID Final Investment Decision MEA Metropolitan Electricity Authority of RPS Renewables Portfolio Standards
CfD Contract for Difference FiT Feed-In Tariff Thailand RTO Regional Transmission Organisation
CO2/ FTE Full-Time Equivalent MNRE Ministry Of New and Renewable STEM Science, Technology, Engineering and
CO2e Carbon Dioxide/ Equivalent GDP Gross Domestic Product Energy Mathematics
COD Commercial Operation Date GHG Greenhouse Gases MOIT Ministry of Industry and Trade of TWh Terawatt Hour
COP Conference Of the Parties GST Goods and Services Tax Vietnam

148 GWEC.NET
Appendix
About GWEC GWEC Market Intelligence Areas
Market Intelligence
GWEC Market Intelligence provides a Market Insights
Policy and Regulations Asset Owners
series of insights and data-based analysis Market statistics,
Country profiles, policy Database of asset owners
on the development of the global wind market outlook,
updates, offshore updates in key markets
industry. This includes a market outlook, auction/tender updates
country profiles, policy updates, deep-
dives on the offshore market among many
other exclusive insights.
GWEC Market Intelligence derives its

insights from its own comprehensive Technology/ Supply Chain Energy Transition O&M
databases, local knowledge and leading Wind turbine data, technology Shift to value-focused, new ISP - OEM - Self Perform
industry experts. trends, component assessment wind-based solutions database for key markets
The market intelligence team consists of

several strong experts with long-standing
industry experience across the world.
GWEC Market Intelligence collaborates

with regional and national wind
associations as well as its corporate
members.
GWEC Market Intelligence created
a Member-only area to provide more
How to access GWEC Market
in-depth market intelligence to
Intelligence Corporate GWEC Members
l Wind energy associations
GWEC’s members and their
l Market Intelligence subscription
employees.
Click here to get your login
Contact
Contact Feng Zhao [email protected]

Appendix
GWEC Market Intelligence Products in 2022

Product Frequency
1. Wind Energy Stats/Market Data
Wind Stats 2021 (historic annual, accumulative, decommision data) Annual
Global Wind Report 2022 Annual
Wind Energy Statistics (wind energy penetration rate, jobs) Annual
2. Country Profiles/Policy Updates

Country Profiles Onshores/Country Profiles Offshore Quarterly/Ad-hoc
Ad-hoc Policy Updates Ad-hoc
3. Market Outlook
Global Wind Market Outlook 2022-2026 (Q1 and Q3) Database + Report Semi-Annual
India Market Outlook Report 2022-2026 Annual
Global Wind Workforce Outlook 2022-2026 Annual
4. Supply Side Data

Global Wind Turbine Supply Side Data Report 2021 (by OEM, by technology, by turbine ratings, models and drive train, etc) Annual
5. Auctions/Tenders
Global Wind Auction Database Annual/Quarterly Auction Trends and Learnings Quarterly
6. Offshore Wind Market

Global Offshore Wind Report 2022 Annual Market Entry Opportunities Database Annual/Quarterly
Global Offshore Project Pipeline (database, in operation and under construction) Annual/Quarterly
Global Offshore Turbine Installation Vessel Database and Report Annual/Quarterly
7. Components Assessment
Gearbox (2019), Blade (2020), Generator (2021), Gearbox (Q4 2022), followed by other components Special Report
8. Wind Asset Owners/Operators

Asset Owners and Operators Database (Onshore & Offshore Ranking) Annual
Asset Owners and Operators Status Report (including strategical trends) Annual
9. O&M
O&M Service Provider Database (ISP - OEM - Self-perform) Annual
O&M Service Provider Status Report (including regional trends) Annual
10. Energy transition, Digitalisation, New Technologies

Position papers/ studies - permitting, Corporate PPAs Special Report New solutions, GWEC policy recommendations Special Report

150 GWEC.NET
Appendix
mainstreamed as a priority. Gender Sustainable Development Goal 7

equality is crucial to the design of (ensure access to affordable,
effective climate policies, and reliable, sustainable and modern
national and international efforts to energy for all).
tackle climate change must address
the need for shared empowerment About the Program
and innovation to be successful. Established in 2019, the Global
As the world recovered from the Wind Energy Council (GWEC) and
Covid-19 pandemic, we entered Women’s contributions are critically the Global Women’s Network for
2021 battle-hardened but ready to important in supporting the the Energy Transition (GWNET)
face the challenges of the “new growing wind industry during a jointly launched the Women in Wind
normal.” For the Women in Wind momentous transition towards a Global Leadership Program as a
Global Leadership Program (WIW), more sustainable energy system response to the call for more
2021 was the year we remained benefiting all of humanity. However, consideration of gender and
resilient and responsive. We a study by IRENA and Women in climate policy, which has been
welcomed the third cohort of the Wind published in 2020 found that growing in volume in recent years. Global wind
program with 21 participants. WIW women currently make up only The program is designed to energy workforce
also hosted its first-ever virtual 21% of the global wind workforce, accelerate the careers of women in
Study Tour designed to engage and the majority owf women in the the wind industry, support their
participants in an international sector perceive gender-related pathway to leadership positions and
learning and networking barriers to their retention and/or foster a global network of
experience in addition to equipping advancement. mentorship, knowledge-sharing,
them with practical skills and and empowerment. Greater gender
21% 65%
women in global perceive
wind energy workforce
industry knowledge such as GWEC and GWNET call on diversity brings valuable gender-related
barriers
engaging participants in a 2-day stakeholders across the wind and perspectives to social and
PPA Academy hosted by Study Tour renewables industries to recognise economic development and – in the
Partner Pexapark. the importance of equal landscape of global issues Women make up 21% of the global wind energy workforce,
and 65% of them perceive gender-related barriers in the sector
participation in the fight against requiring strong leadership and a Source: 2019 study by IRENA and Women in Wind, with nearly
1,000 respondents from 71 countries
However, the pandemic deepened climate change. In uplifting the next skilled workforce – few areas are as GLOBAL
pre-existing inequalities and generation of stewards for a critical as climate change and the WIND
ENERGY
exposed the vulnerabilities of our sustainable energy system, we transition to a sustainable, clean Jointly organised by: COUNCIL
social, economic and political affirm that our efforts are in energy system.
systems. As the global community alignment with UN Sustainable
GLOBAL
examines the path to green Development Goal 5 (achieve Find out more and join us: https://gwec. WIND
GLOBAL WIND ENERGY COUNCIL ENERGY
recovery and sustainable growth, gender equality and empower all net/women-in-wind/about-the-program/ COUNCIL
SOUTH EAST ASIA
diversity and inclusion must be women and girls) and UN Instagram: @WeAreWomenInWind
GLOBAL
OFFSHORE WIND TASK FORCE WIND
ENERGY
COUNCIL
OFFSHORE
Global Leaders
GWEC Global Leaders

The Global Wind Energy Council’s Global Leaders are an exclusive leadership group of decision-makers and top-tier members who form the
basis of the Association’s Executive Committee, which drives the work programme and plays a major role in shaping GWEC’s priorities for its
efforts in the short and long-term strategy.
Siemens Gamesa Shell Ørsted Mainstream Renewable Power

Siemens Gamesa unlocks the power of Shell is building a global integrated power The Ørsted vision is a world that runs Mainstream Renewable Power is a leading
wind. For more than 40 years, we have been business spanning electricity generation, entirely on green energy. Ørsted develops, pure-play renewable energy company, with
a pioneer and leader of the wind industry, trading and supply. Shell entered the constructs, and operates offshore and wind and solar assets across global
and today our team of more than 26,000 offshore wind business in 2000 as part of a onshore wind farms, solar farms, energy markets, including in Latin America, Africa,
colleagues work at the center of the global consortium that installed the first offshore storage facilities, renewable hydrogen and and Asia-Pacific. Mainstream is one of the
energy revolution to tackle the most wind turbine in UK waters. Today, we have green fuels facilities, and bioenergy plants. most successful developers of gigawatt-
significant challenge of our generation – the deployed, or are developing, over eight Moreover, Ørsted provides energy products scale renewables platforms, across onshore
climate crisis. With a leading position in gigawatts (GW) of wind across North to its customers. Ørsted is the only energy wind, offshore wind, and solar power
onshore, offshore, and service, we engineer, America, Europe, the UK, and Asia. We see company in the world with a science-based generation. It has successfully delivered 6.5
build and deliver powerful and reliable offshore wind as a critical way of generating net-zero emissions target as validated by GW of wind and solar generation assets to
wind energy solutions in strong partnership renewable electricity for our customers and the Science Based Targets initiative (SBTi). financial close-ready. In May 2021, Aker
with our customers. A global business with moving Shell towards its target of being a Ørsted ranks as the world’s most Horizons acquired a 75% equity stake in the
local impact, we have installed more than net-zero emissions energy business by sustainable energy company in Corporate company, accelerating its plans to deliver its
120 GW and provide access to clean, 2050 or sooner, in step with society. Knights’ 2022 index of the Global 100 most high-quality pipeline of over 16 gigawatts of
affordable and sustainable energy that sustainable corporations in the world and is clean energy. Mainstream has raised more
keeps the lights on across the world, while recognised on the CDP Climate Change A than EUR3.0bn in project finance to date
supporting the communities where we List as a global leader on climate action. and employs more than 420 people across
operate. five continents.

152 GWEC.NET
Global Leaders
GE Renewable Energy Iberdrola Vestas Equinor

GE Renewable Energy harnesses the With over 170 years of history behind us, Vestas is the energy industry’s global We are looking for new ways to utilise our
earth’s most abundant resources – the Iberdrola is now a global energy leader, the partner on sustainable energy solutions. We expertise in the energy industry, exploring
strength of the wind, the heat of the sun and number one producer of wind power, and design, manufacture, install, and service opportunities in new energy and driving
the force of water; delivering green one of the world’s biggest electricity utilities wind turbines across the globe, and with innovation in oil and gas around the world.
electrons to power the world’s biggest in terms of market capitalisation. We have +151 GW of wind turbines in 86 countries, We know that the future has to be low
economies and the most remote brought the energy transition forward two we have installed more wind power than carbon. Our ambition is to be the world’s
communities. With an innovative spirit and decades to combat climate change and anyone else. most carbon-efficient oil and gas producer,
an entrepreneurial mindset, we engineer provide a clean, reliable and smart as well as driving innovation in offshore
Through our industry-leading smart data
energy products, grid solutions and digital business model, to continue building wind and renewables. We plan to reach an
capabilities and +129 GW of wind turbines
services that create industry-leading value together each day a healthier, more installed net capacity of 12-16 GW from
under service, we use data to interpret,
for our customers around the world. accessible energy model, based on renewables by 2030, two-thirds of this will
forecast, and exploit wind resources and
electricity be from offshore wind. With five decades of
deliver best-in-class wind power solutions.
ocean engineering and project
Together with our customers, Vestas’ more
management expertise, focus on safe and
than 29,000 employees are bringing the
efficient operations, in depth knowledge of
world sustainable energy solutions to power
the energy markets, skilled personnel and a
a bright future.
network of competent partners and
suppliers, Equinor is uniquely positioned to
take a leading role in the offshore wind
industry. From building the world’s first
floating wind farm to building the world’s
biggest offshore wind farm we are well
underway to deliver profitable growth in
renewables be a leading company in the
energy transition.
Leading Sponsor
Supporting Sponsor
Associate Sponsors
Iberdrola [email protected] Henkel Larissa Spilke ([email protected])

Hamburg Messe Kavaken [email protected]
(WindEnergy Hamburg) [email protected] NES Fircroft Vicki Codd ([email protected])
Lincoln Electric Bryan O’Neil ([email protected]) SSE Richard Holligan ([email protected])
Harting Electric Guanghai Jin ([email protected]) Techstorm Martijn van Breugel ([email protected])
Goldwind [email protected]
WindESCo [email protected]

154 GWEC.NET

Global Wind Energy Council
Rue de Commerce 31
1000 Brussels, Belgium
T. +32 490 56 81 39
[email protected]
@GWECGlobalWind
@Global Wind Energy Council (GWEC)
@Global Wind Energy Council

www.gwec.net
156 GWEC.NET

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GWEC | GLOBAL WIND REPORT 2022

GLOBAL WIND ENERGY COUNCIL

GLOBAL WIND ENERGY COUNCIL

deploy new renewable capacity. and regional supply chain hubs,

Last but certainly not least, we must A holistic approach is of the

Word from the Chairman

Welcome to the Global Wind Report 2022

expansion, public acceptance and

The Data: 2021 was the wind industry’s

of global greenhouse gases in 2021 to 31.4 GW in 2026 under

Market outlook Despite two years of enormous

The Story: Wind energy’s next era of growth

Cumaltive global installations (GW)

Cumaltive global installations (GW)

New global installations (GW)

goals. The longer we delay this markets which do not enable 0 0

Part One: System Design

production in energy-intensive agreements (PPAs) which do not

System value, a “holistic investment.9 System value Fossil fuels-based generation

As in the 1970s energy crisis, powering economies, it is Large hydro (>10MW)

prices; the alternative is for state Rockefeller Foundation, founded

will also likely incorporate is only possible with strongly

Case study: Capturing green recovery opportunities from wind

Russia) or which draw a large

The economics of renewable

Metric tons (millions)

Equatorial and Southern Africa

Southeast Asia, Korea and Japan

Rest of Latin America

the bottom 10%. LNG projects, which

impact of gas compressors before shipping, are

their signals on the role of natural

Easing gas dependence with

margins, while developers and

Recent seabed leasing auctions in

Development 1.6% 4.9

Engineering and Management

Site Access and Staging

Assembly and installation

Insurance During Construction 0.9% 80 77

Substructure and Foundation

Site Access, Staging and Port

Assembly and Installation

Insurance During Contraction

Assembly Development 2.3%

Electrical Infrastructure 17.6%

means average prices are back to Robotics

reduction in the supply chain. A

presents a market dilemma, as

Share performance of fossil fuel companies versus clean energy companies,

Dec Apr Jul Oct Jan

failure, the current situation has recognised, and that investment in

Part Two: Society

GWEC | GLOBAL WIND REPORT 2022

Wind energy faces permitting barriers around the world

UK: Onshore wind must meet strict planning

Japan: Up to 8 years to complete the

Vietnam: A complex permitting environment

Indonesia: Permitting is slow and uncertain,

l Monitorthe creation, distribution

Holistic planning for future l Ensure national development

Uncertainty can be mitigated l Increasedinvestment in human resources, IT), business

l Lastyear, a total of 19.4 GW