EU prepares for 80 per cent increase in renewables capacity

New report shows Europe will see a huge spike in renewable energy capacity if member states meet targets

The coming decade will experience a 17-fold increase in offshore wind energy capacity across Europe, while concentrated solar power and marine energy should deliver similar growth rates if EU member states fulfil their stated plans to install renewable technologies.

That is the conclusion of a new report from the European Environment Agency (EEA), although separate research on the dire economic environment faced by wind turbine manufacturers in particular may serve to cast some doubt on the agency’s predicted build rates.

The EEA analysed nations’ predicted growth in clean energy capacity as they look to meet their own renewable targets, as well as the impact of the EU’s collective goal of producing 20 per cent of energy from renewable sources by 2020.

Currently, annual average predicted growth rates stand at 11.7 per cent.

The EEA forecasts offshore wind capacity will increase 17-fold to more than 44.2GW, despite the fact that industry predictions come in at a more modest 10-fold increase.

It also predicts wave and tidal energy and concentrated solar power capacity will increase 11-fold over the coming decade.

According to the report, installed capacity of onshore wind and biomass-generated electricity are set to double over the same period, with solar photovoltaic capacity predicted to triple.

The EEA also expects renewable heat capacity to increase substantially: heat pump output is set to triple, while geothermal heat and solar thermal output will almost quadruple by 2020.

But even these exponential growth rates will ensure that the EU only just achieves its renewable energy targets, the EEA says.

It notes that around 43 per cent of all renewable energy production is planned for heating and cooling, with biomass accounting for 80 per cent of output. Transport will make up just 12 per cent, but is expected to be the fastest-growing element between 2005 and 2020.

Jacqueline McGlade, executive director of the EEA, said the report highlights the need for the EU to step up its renewable energy ambitions.

“With a concerted effort we can and should go even further to phase in renewable energy sources,” she said. “Burning fossil fuels threatens the stability of our climate, and our most recent analysis has shown that pollution from coal and gas power plants is costing Europe many billions of euros a year in health costs.”

However, a separate study published yesterday by analyst firm Clean Energy Pipeline finds that $16.7bn has been wiped off the market capitalisation of the world’s 10 largest publicly traded wind turbine and components manufacturers over the last year.

When markets closed last week Sinovel, Goldwind, Vestas, Gamesa, Suzlon, REpower, Hansen Transmissions, China High Speed Transmission, Vacon and Nordex were worth a combined $18.9bn – a 47 per cent decrease on $35.6bn a year ago.

Sinovel, China’s largest wind turbine manufacturer, has shed $7.7bn of its value, a reduction of around 54 per cent since it first listed on the Shanghai Stock Exchange in January 2011.

But even excluding Sinovel, the top 10 turbine manufacturers had a combined market capitalisation of $12.6bn last week, compared with $21.7bn this time last year.

Clean Energy blamed higher interest rates and increased planning bureaucracy for slowing down the Chinese wind market, while its US counterpart has struggled to compete with an influx of cheap shale gas.

Only 5.4GW of US wind energy capacity was brought online in 2010, compared with 9.5GW in 2009 and 8.5GW in 2008, and just 2.2GW was added in the first six months of 2011.

The research company said wind turbine companies would be forced to turn to emerging markets such as South America, South Africa, India and Eastern Europe if they are to reverse the decline in market capitalisations seen over the last two years.

http://www.businessgreen.com/bg/news/2128466/eu-prepares-80-cent-increase-renewables-capacity