Much of the increase in renewable energy in the industrialised world is projected to be produced by renewable energy sources other than hydro power and in particular to be produced by wind.
BTM Consult, a leading independent consultancy specialising in renewable energy, forecasts that the wind energy sector will grow at an average rate of 18% pa until 2010. They forecast that a total of 148,794MW of wind energy capacity will be installed by the end of 2010, an increase of 151% from the 59,264MW of installed capacity at the end of 2005.
Europe is forecast to continue to be the leading wind energy continent, and is predicted to account for nearly 59% of global accumulated installed capacity in 2010. Germany, Spain, the UK, Portugal, France and Italy are expected to account for all but a quarter of new European installations during this period.
The USA, India, China, Canada, Australia and Japan are expected to be the major non-European contributors to the growth in installed capacity through to 2010.
The main impetus for this expected growth is the need to meet increasing legislated renewable energy targets established by countries around the world. In addition, the repowering of older turbines and the development of offshore wind farms is expected to expand the wind energy sector. Consolidation within the industry may also be seen as ownership shifts away from individuals and smaller developers.
Renewable energy targets for key marketsEurope is the global leader in the commercialisation of wind energy. Europe accounts for over 65% of global installed capacity and is responsible for manufacturing approximately 80% of all wind turbines. The catalyst for this focus in developing wind energy is Europe's desire to address its dependence on energy sourced from outside Europe, and the aggressive targets set for the promotion of renewable energy. Europe imports 50% of its energy requirements and this figure is expected to increase if no other measures are taken.
The EU has set national targets for the contribution of electricity from renewable energy sources as a proportion of gross consumption. The overall European target is to increase the share of electricity from renewable energy sources from 13.9% in 1997 to 22% in 2010. (ref. Directive 2001/77/EC of the European Parliament of 27 September 2001). At the March 2007 meeting of the European Council, EU Heads of State reaffirmed the EU's commitment to the development of renewable energy by endorsing a binding 20% target for the use of renewable energy in overall EU energy consumption by 2020, as part of a braoder EU-wide Energy Action Plan.
The US government has been an active participant in the growth of the wind energy sector. The US has the PTC program at the federal government level and a state based renewable portfolio standard ("RPS") applies for some 20 states and the District of Columbia. The PTC program offers an incentive of US$19 per MWh (CPI adjusted) for electricity generated from renewable sources during the first 10 years of operation of the project. Although the PTC program was due to expire by the end of 2005, a two year extension of the incentive to December 2007 (being the date by which a wind farm must begin operation in order to qualify for the 10 year credit) is included in the Energy Policy Act that President Bush signed into law on 8 August 2005.
In addition, state based RPS programs are based on a fixed quantity system whereby a renewable energy generator such as a wind farm is issued with "renewable energy certificates" which can be onsold to energy retailers who are required to deliver them to a state based regulator.
Policies regarding both renewable energy and wind energy vary significantly across the Asia Pacific: India, China, Japan, Australia and New Zealand are the key countries promoting the development of renewable energy.
In Australia, electricity retailers and other wholesale users are required by legislation to meet the Mandatory Renewable Energy Target, or "MRET", by surrendering a pre-determined number of "renewable energy certificates" or "RECs" per annum. The RECs are created by renewable energy generators, such as wind farms. The intended purpose of MRET is to encourage renewable energy production to increase by 9,500 GWh per annum by 2010, and to maintain that increased level of production until 2020. Failure by a retailer or user to meet its designated share of the MRET results in it being liable for a non-tax deductible penalty of $40 per MWh calculated on the shortfall.
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