We won't have the final tally for 2015 installations for another few weeks, but from what we know already it seems clear that 2015 will be a record year, up substantially from 2014 installations of 51 GW, and likely far ahead of our predictions of 53 GW for the year. Some analysts are suggesting it could be up to 60 GW...we'll see soon.
However, there are many auspicious signs for 2016:
- The outcome of COP 21, although unlikely to yield many specific favourable policy changes which will affect the 2016 market, it certainly improves the atmosphere, may make financing easier, and augurs well for the future.
- The unexpected (at least by me) deal in the US Congress to extend and phase out the PTC over the next five years will be a great boon to that market, with suggestions from MAKE that it could add 14.5 GW to projected installations over the period of 2016 - 2021 (Bloomberg puts it at 19 GW).
- China: wind will play an increasing role in China's 'energy transition', the choking smog continues to drive policy for RE uptake, and ironically, the proposed further reduction in the FITs in 2018 may create a short term spurt.
- New markets continue to crop up across Africa, Asia and Latin America, as well as the beginnings in the Middle East, Caucasus and Central Asia.
Of course there are all sorts of troubling signs as well. Political and economic meltdown in Brazil and to some extent South Africa, casting shadows on two of the industry's rising stars; difficult conditions in India leading to disappointing installation rates; political disaster for onshore wind in the UK; and of course cratering oil prices, coal company bankruptcies and general malaise in the fossil fuel sector wreaking havoc in financial markets, which I'm sure we will not be immune from. But on the whole, I think the good signs outweigh the bad, and 2016 is going to be another good year.
When pondering my prognostications for 2016, it's always instructive (and sobering) to look back at what I said 12 months ago about 2015...Fortunately (or unfortunately!) Recharge printed my 'TOP 10 Predictions for 2015'. How did I do?
1. "Wind power will increasingly be chosen primarily because of its price advantage in many markets". - I think we got that one right, and I expect it to continue... | Score 1.0 | 2. The proper valuation and quantification of flexible generation becomes the most important question in electricity market design.
- Well, yes, sort of. There's still a lot of talk but not much testing of new market design out there...but valuing flexibility in a useful way is still one of the main focuses...say half right. | Score 0.5 | 3. 6-8 MW turbines for offshore start rolling out in earnest.
- Yes, lots of sales and an increasing number of installations. | Score 1.0 | 4. The gap between developed and emerging markets continues to increase.
- Yes indeed. Non-OECD markets were 13% larger than OECD markets in 2013, 47% larger in 2014, and possibly even larger in 2015 once we get the final tally. | Score 1.0 | 5. Co-location of wind and utility-scale PV, usually through adding ground-mounted solar to an existing wind farm, and probably first in Northeast Brazil.
-Well, maybe I jumped the gun on that one. It's coming, but not as quickly as I expected. | Score 0.0 | 6. Japanese wind finally gets some post-Fukushima momentum.
- Nope. Afraid not. | Score 0.0 | 7. E.ON's planned divestment of fossil-fuel and nuclear generation in favour of renewables starts a wave of similar moves across the world.
- Well, RWE has followed suit in its own way, and other are making noises, and companies are dumping coal assets wherever they can, but I'd hardly call it a wave. | Score 0.5 | 8. The backlash against wind and solar's destruction of the traditional utility model grows in ideologically driven debates in Australia and parts of North America.
- Hmmm...well, sort of. This is a good description of what was happening in Tony Abbott's Australia, but less than expected in North America. You could say that this is part of what is happening in the UK I suppose, although it's by no means the whole story. | Score 0.5 | 9. Although there will be an agreement at COP21 in Paris, it will be more of a framework, short on numbers. Nowhere on earth is there a realistic carbon price for 2015 and for years to come.
- Yes on Paris, and yes on the lack of a carbon price...and although the numbers are short in the Paris agreement, the signal is strong. | Score 1.0 | 10. The Bank of England inquiry into the long-term threat to the economy posed by potentially huge stranded fossil-fuel assets continues to drive the shift of investment to renewables.
- I would say that one of the most striking developments in 2015 was that all of a sudden, fossil fuel investments were no longer a 'good thing'. | Score 1.0 |
So, my self-assessment is 6.5 out of 10...a reasonable passing grade at my son's school, but far from stellar. To be fair, this is what Recharge picked out of 2 hour interview...if I was constructing it from scratch I might have been more careful... |
