Wind Energy Market Forecast is Breezy and Steady
By Jenny Bieksha, Bishop & Associates Inc.

The 2011 global market for wind energy is gaining momentum, after modest growth in 2010. By the numbers, it would appear that extensive growth occurred. However, when compared to previous years, it is best to say the global wind power market held steady. New wind power capacity added during 2010 reached 39 gigawatts (GW), more than any other renewable technology, and more than three times the 11.5 GW of wind added worldwide just five years earlier. At least 52 countries increased their total existing capacity, and 83 countries now use wind power on a commercial basis.

Overall, slower market growth is attributed to several factors. Policy uncertainty in key wind countries, the continuing economic crisis that has reduced access to financing, and depressed electricity demand in many developed countries. As a result, for the first time, the majority of new turbine capacity was added in developing countries and emerging markets rather than in wind’s traditional markets. Expansion of wind power beyond the traditional markets is a trend that the industry anticipates will continue to develop.

The wind power outlook for 2011 is positive. Overall investment in wind power in 2010 was up by 31%, reaching $96 billion, according to Bloomberg New Energy Finance. Analysts and manufacturers are encouraged by industry forecasts, as investment is likely to translate into actual projects in 2011 and 2012.

Regional Activity
For the third year in a row, Asia was the world’s largest regional market for wind energy, with capacity additions amounting to more than 19 GW. In China, strong growth was driven by continued political and regulatory support and lower labor and manufacturing costs. The major developers of wind projects in China are state-owned enterprises. In India, 17 companies now manufacture wind power equipment. Other Asian countries with notable new capacity additions include Japan, South Korea, and Taiwan. In the Pacific region, both Australia and New Zealand are expected to grow their wind power at a stronger pace in the coming years.

The European Union installed nearly 9.9 GW in 2010. For the first year since 2007, wind power did not account for the largest share of new electric capacity additions, and came in third behind natural gas and solar photovoltaic (PV). Emerging-market EU countries helped to offset the decline in mature EU markets, with significant growth in Bulgaria, Lithuania, Poland, and Romania. In addition, Cyprus installed its first wind turbines.

The United States added just over 5 GW in 2010, compared with more than 10 GW in 2009. It appears that 2011 will be a much better year. The U.S. has already added 2,151 megawatts of installed capacity in the first half of 2011 and started on another 7,354 megawatts of wind power capacity. An example of new project construction is located in Texas. The Wind Energy Transmission Texas (WETT) consortium, made up of Brookfield Asset Management and Isolux Corsan Concesiones, has financing in place for a 378-mile transmission line and five substations. The line will connect projects in the west with more populous areas in the east of the state, and will allow Texas to expand its transmission ready wind capacity from 10 GW to 18 GW.

Wind Power Trends
The year 2010 saw the emergence of increasingly vertically integrated supply chains. In addition, the trend continued for manufacturing firms to move into project development. Although manufacturing volumes remained constant, manufacturing capacity increased substantially during 2010. Project developers were challenged by competitive natural gas prices, the ability to obtain project financing, and access to transmission. Many industry leaders lowered sales forecasts during 2010.

There is a trend toward increasing the size of individual wind projects, both onshore and offshore, driven mainly by cost considerations. The use of small-scale turbines is increasing, driven by the need for electricity in rural areas, the development of lower-cost grid-connected inverters, and government incentives. There are 106 companies in 29 countries that are manufacturing wind turbines of 50 kW and smaller. An estimated 1.5 million people in China receive electricity through small-scale wind turbines.

The offshore wind industry continues to pick up speed, increasing to 3.1 GW at the end of 2010. Most of this capacity is in Europe, and the rest is in China and Japan. The European offshore market grew more than 50% during 2010. Europe now has over 40 operational offshore wind farms, with 16 more projects under construction. The first major offshore wind farm outside of Europe, China’s Donghai Bridge near Shanghai, began operation in July 2010, and China started construction of four projects off the coast of Jiangsu. The U.S. continues to move forward with developing offshore wind farms. Already in 2011, 10 offshore wind developers bid in the leasing process for federal waters off Massachusetts and 11 more for coastal areas off New Jersey.

Wind Industry Innovation
Competition and innovation will drive down the cost of energy derived from wind. A new generation of wind turbines is on its way. Some of these are already visible in the market and greater competition among wind turbine manufacturers has been pressing prices downward. Innovation is apparent in several areas of the wind industry, including turbine blades, drive train, intelligent operation, and the co-existence of wind farms and radar systems.

Turbine Blades
Compared with turbines found in aircraft, wind turbine blades are simple in their design. Except for active blade pitch, wind turbine blades are very passive in comparison to lifting surfaces in aircraft. By enabling faster and more distributed aerodynamic load control, innovations in turbine blades will enable greater energy capture. Another issue with wind turbine blades is that they are typically made in one piece. Segmented blades will allow more efficient and flexible production, and easier transportation of the blades to the project site.

Drive Train
The drive train, traditionally consisting of the main shaft, gearbox, generator, and power electronics, is the heart of the turbine. A large portion of operations and maintenance costs are the result of drive train component failures. Several new turbines launched within the past year are expected to change this. The Siemens SWT-3.0-101 is a direct-drive/permanent magnet generator and is expected to greatly improve reliability due to considerably fewer parts and no gearbox to replace. The Vestas V112-3.0MW is a geared/permanent magnet generator, featuring a swept area 55% greater than other models, enabling it to extract more energy from low-to-medium wind sites.

Intelligent Operation
Another opportunity for innovation in wind farms lies in their operation. The wind industry came of age during the 1990s, before fiber optics was common and before preventive maintenance tools and techniques were refined. As a result, many wind turbines have outdated Supervisory Control and Data Acquisition (SCADA) systems. However, wind power plant operations are becoming more sophisticated. “Smart Wind” is the addition of digital intelligence to the blades, power train, and turbine control systems. Smart Wind will reduce the unit cost of power production by increased uptime, reduced operating costs, and a reduction in the frequency of blades and major power train component failures. These systems will enable operators to link cause-and-effect, providing the basis for “smarter” operation.

Many turbines have sensors mounted in blades and on the nacelle, but everything measured — pressure, wind speed, and direction — is after the fact. Laser sensors (known as LIDAR - Light Detection and Ranging), developed for military aircraft, may change that. By measuring air velocity and direction, LIDAR enables the control system to make intelligent “feed-forward” decisions, rather than act as the result of “feedback.” These units are expected to become commercially viable within the next few years.

Radar Systems
Many countries are actively studying how wind turbines and radar systems can coexist. An estimated 20 GW of wind power capacity is currently blocked worldwide by concerns about radar interference. Operating wind turbines can be indistinguishable from airplanes on many radar systems and cause blackout zones in which planes disappear from radar entirely.

One proposed solution is an adaptation to the Raytheon radar system, in use at 17 sites in the U.K. Algorithms have been developed, which enable the system to discriminate between turbines and aircraft, allowing it to operate without confusion over the presence of wind farms. Another radar system from Lockheed Martin is undergoing trials at an offshore wind farm in Denmark. This radar has the capability to differentiate air traffic from wind turbine blades.

Another solution utilizes military stealth technology. Vestas has successfully tested a full-scale “stealth” rotor blade on a wind turbine. The stealth turbine uses radar-absorbing materials that are integrated into the manufacturing processes for turbine components and can be designed to operate at aviation and maritime frequencies.

Wind Power Market Potential
Interconnect opportunities are abundant in the wind industry. Digitizing SCADA systems, installing new sensors, and upgrading radar systems will require new interconnects. New wind farm development will require a wide variety of electronic connections, both inside the turbine and in overall site operations. Many industry standard connectors cross market directly into renewable energy applications and there are significant opportunities to enhance existing designs to provide solutions for problem areas.

Wind energy is versatile and can serve rural areas and unserved areas in developing countries, as well as large-scale applications and energy-intensive industries in industrialized regions. In many respects, wind power is not the mature industry that people think it is. Innovations are being pursued in many areas. Wind power manufacturing businesses continue to drive down costs through more efficient designs, economies of scale, automation, improved materials and sourcing, and higher levels of quality throughout the supply chain. Today the unknown is how large an effect this will ultimately have on the cost of wind energy for the future.

Jenny Bieksha Director, Renewable Energy, Medical, and Military, Bishop & Associates Inc. Jenny Bieksha joined Bishop & Associates in 2008 as its market segment director for the renewable energy, and the test, measurement, and instrumentation markets. She is currently a management consultant specializing in strategic business planning, with an emphasis on the development of program, market, and product plans. Bieksha has more than 20 years of experience in the electronics industry, with a background in market management, business development, channel sales, product management, and operations for ITT Corporation, Delphi Connection Systems, and Hughes Aircraft Company. Bieksha has a bachelor of science degree in marketing from the University of Wyoming, and has since received a certificate as a project management professional.