Global Wind Power Growth Must Triple To Achieve Net Zero

Despite COVID pressures and concerns about the record amounts of Chinese wind installations in 2020, the wind industry recorded its strongest year with a record 93GW of new capacity in 2020. Yet GWEC believe growth must triple over this next decade to have a chance at achieving 2050 net zero goals.

Total global wind power capacity has now reached 743GW. According to GWEC this has led to avoided annual emissions of over 1.1 billion tonnes of CO2 annually or, as Alyssa Pek, communications director at GWEC, points out an amount "equivalent to the annual carbon emissions of South America". Yet the report says the world needs to be installing a minimum of 180GW of new wind energy every single year to avoid the worst impacts of climate change (according to scenarios developed by IRENA and the IEA), meaning that the industry and policymakers need to act fast to accelerate deployment.

The Global Wind Energy Council (GWEC)'s Global Wind Energy 2021 report highlights a spectacular growth rate of 53% in global wind installation in 2020. While there was a healthy dose of scepticism in the wider markets regarding China’s massive 71GW deployment, the question wasn’t whether the level of wind existed, more when the plants were built, connected to the grid and came online. Even if the figure covered some developments from 2019 (potentially around 18GW), bringing 71GW of wind power online is a significant milestone, especially given the global wind deployment figure for 2019 was 76GW. What this speaks to is the critical importance of aligning capacity and policy.

CEO Ben Backwell said: “We need to be installing at least 180 GW of new capacity every year through 2025 to ensure we remain on the right path to limit global warming well below 2°C - meaning we are currently on-track to be 86 GW short on average each year. And these installation levels will need to scale up to 280 GW beyond 2030 to deliver carbon neutrality by mid-century.”

Some of the world’s largest industrial powers made important net zero commitments last year but those ambitions need to be translated into practical solutions to speed up wind energy deployment – otherwise these targets will be missed. Ben Backwell, CEO of GWEC said: “This means streamlining the permitting and consenting process for projects to increase investor and developer confidence, and creating sensible regulation which works to prioritise renewable energy for grid connections, land/seabed allocation and licensing. This needs to be the approach around the world, from high-growth wind markets like the US, Europe, China and Brazil, to other markets where growth has begun to lag, like India and South Africa.” It will also require governments to increase investment in the grid, ports and other infrastructure, and revisit the structure of energy markets to account for the social cost of carbon.

The global wind power market has nearly quadrupled in size over the past decade and established itself as one of the most cost-competitive and resilient power sources across the world. In 2020, growth was driven by a surge of installations in China and the US – the world’s two largest wind power markets -who together installed 75 per cent of the new installations in 2020 and account for over half of the world’s total wind power capacity. The cost of offshore wind continues to fall, with improvements in supply chain efficiencies and localisation. When you combine these with political pressure for net zero, a step change in growth can be expected.

Mark Hutchinson, Chair of GWEC’s South East Asia Task Force says that offshore wind growth in Asia is increasing. A huge amount of growth has been driven by corporate interest in the sector and Hutchinson believes that many have underestimated the growing concerns of corporates and shareholders regarding their emissions footprints.

The last year has seen increasingly large PPA’s agreed, and the RE 100 companies are becoming more aggressive in pushing action on emissions down through the supply chain. One example of this in 2020 when Taiwan’s largest chip manufacturer TMSC sign a 920MW wind deal with Orsted, and its latest deal with Apple shows the links with wind are growing strongly. Elsewhere Amazon’s Climate Pledge has meant a commitment to renewable energy and seen deals signed for nearly 7GW of clean power.

CEO Ben Backwell added: “Governments can capitalise on the competition to invest by creating attractive enabling environments for renewables, which will include ambitious targets, priority status for renewable projects, simplified permitting schemes and market signals like carbon pricing mechanisms.”

While wind power has significant decarbonisation potential per MW, it is not a simply plug and play approach like solar. There is a huge value chain which ranges across rare earth procurement, contract agreements, de-risking finance, construction. There are issues around incumbency, a high degree of regulatory complexity and policy uncertainty. What the sector needs to achieve further growth is the right market design and an understanding of the role clean wind power can play in a complex low carbon energy market.

As CEO Ben Backwell said: “As an industry, we also have a responsibility to continue innovating and investing in enabling technologies like green hydrogen, storage and next-gen grid applications. These will allow wind to go beyond clean power and decarbonise heavy industry, transport and other sectors. This is the system-wide decarbonisation being called for by institutions like the IPCC, but overall to meet our Paris Targets by mid-century, we need to set a new pace for wind growth in this decade.”