Germany: Onshore wind power grows as forecast in 2013, but 2014 and 2015 remain highly uncertain

As forecast by the German Wind Energy Association (BWE) and VDMA Power Systems, the market for onshore wind turbines is growing. The statistics published by Deutsche WindGuard on behalf of BWE und VDMA Power Systems based on an up-to-date survey of manufacturers shows stable growth. Nearly 60 percent of the 2,998 megawatts of newly installed capacity was built in central and southern Germany. Wind power is growing especially strongly in these areas, but the north remains an anchor of stability for onshore wind power with over 40 percent of the market.

As Thorsten Herdan, head of VDMA Power Systems points out, “The market grew by 29
percent year over year, almost exactly in line with our forecast for 2,900 megawatts of onshore wind power growth from the summer of 2013.” But he adds that these positive numbers should not be used to cover up the poor investment climate in Germany. While the limitation of legitimate expectation to projects that received approval by 22 January 2013 does not endanger projects with permits, it is a threat to projects planned for 2014. It is therefore hard to forecast 2014. Depending on how the Renewable Energy Act is amended, the BWE and VDMA Power Systems expect 2,500 to 3,000 megawatts to be installed. When new feed-in tariffs are adopted, special attention has to be paid to the successful further development of turbines especially designed for areas with weak wind conditions so that they can remain profitable.

BWE President Sylvia Pilarsky-Grosch says, “Because the planning horizons are so long, a lot of projects realized in 2013 were launched in the wake of the nuclear disaster at Fukushima. The debate about reducing the cost impact of renewables sped these projects up. Planning horizons of 3 to 5 years mean that the projects being worked on now sometimes extend into 2017.” More old turbines were dismantled than expected – 416 units with a cumulative capacity of 257.91 megawatts, an average of 620 kilowatts per unit. The lack of a turbine register means, however, that not all projects could be recorded – an aspect that has to be kept in mind when a new growth corridor for onshore wind power is designed. “The uncertainty after the resolutions announced by the new German cabinet in Meseburg threatens the strength of the German market.”

Thorsten Herdan has a forecast for global onshore and offshore wind power markets: “We
expect the global market for wind turbines to pick up this year to reach a record level of 45,000 megawatts after an unprecedented drop of nearly 15 percent in 2013 to around 39,000 megawatts, especially because of massive fluctuations on the US market. But the German wind sector remains very well positioned vis-à-vis international competition. It will still be able to expand its leading position even if a growth corridor and mandatory direct marketing are ntroduced” as long as there is a stable domestic market. Herdan therefore says that changes to German energy policy must not undermine investor confidence. He calls on politicians to keep amendments modest to prevent growth from slowing down and markets from collapsing.

Sylvia Pilarsky-Grosch adds that, “If we add unjustified distance requirements to inflexible
ceilings and the threat of curtailment, we will limit the space available and reduce the
affordability of the least expensive source of renewable electricity: onshore wind power. We also need to do away with administrative red tape, such as for hybrid towers and radars.”

Key figures:
Onshore wind power in Germany in 2013
Newly installed capacity: 2,998 MW (2012: 2,324 MW)
of which repowering (estimate): 766.28 MW (2012: 432 MW)
Dismantled: (estimate): 258 MW (2012: 179 MW)
Total installed capacity on 31 December 2013: 33,730 MW (end of 2012:30,989 MW)