Innovation and technological development in energy

Germany and Spain are no longer the only countries ensuring European Union market growth. 2005 witnessed the rise in importance of other European markets like those of the United Kingdom, Portugal, Italy and even that of France. The EU benefited from an additional 6207.2 MW (with out-of-service capacity deducted),bringing total cumulated capacity up to 40517.8 MW. The European Commission objective of 40000 MW has thus been reached five years early.Electricity production increased by 10 TWh between 2004 and 2005, reaching 69.1 TWh, i.e.the equivalent of all the electricity production of the different biomass sectors taken together.
The German market recorded a decline in growth for the third consecutive year. According to AGEEstat (statistics organisation of the Ministry of the Environment),growth amounted to an additional 1798.8 MW (power decomissioned deducted), which brought Germany’s total installed capacity to 18427.5 MW. According to the German Wind Energy Association (BWE), the main cause of this drop is the new law on construction that permits local authorities to delay or stop wind turbine projects when they lead to a modification in zoning regulations.The other reason put forward by the BWE is a too slow extension of the electrical power grid that is delaying construction of new wind parks in the most promising regions. In the end, the new German government did not call into question the new law on renewable energies that had become effective on 1st August 2004.
In 2005, Spain was once again the second biggest market in the European Union behind Germany.According to the Institute for Energy  Diversification and Savings (IDAE), Spain put an additional 1594 MW of wind power capacity into service, bringing total installed capacity up to 9911 MW.Wind power should continue to grow in Spain thanks to the new Renewable Energies Plan that sets a wind power objective of 20000 MW for 2011, which is more than sufficient to reassure investors.The goal of this plan, which covers five years and is provided with €8 billion, is to double the contribution of renewable energies so that they reach 12.1% of primary energy production in 2010.Moreover, since 2004, the wind power market has been evolving in new conditions of clarity for investors. The incentive systems consist in choosing between a set purchase price and a bonus that is added on to market price. For 2005, the fixed price of wind origin electricity was established, for onshore installations greater than 5 MW, at 6.60 c€/kWh for the first five years, at 6.23 c€/ kWh from the 6th to the 15th year,and at 5.86 c€/kWh for the years after this. The bonus, decided on annually, is added on to the market price. In 2005 it was set  at 2.93 c€/kWh, which makes it particularly attractive when the current price of electricity is taken into consideration.
 

1. Wind power installed in the European Union
at the end of 2005 (in MW)

2. Comparison between current trend and White Paper objectives (in MW)
EurObserv ’ER 2006

This rise in importance of the new wind power markets in the EU, i.e. in the United Kingdom, Portugal, Italy and France, is very positive for sector development.Beginning this year, this should be accompanied by a return to the forefront of the Spanish market,reassured by a new development programme that sets the mark for cumulated capacity planned for 2011 at 20 GW.In Germany, the decision of the large coalition government that came to power in October 2005 to not call into question the law on renewable energies should maintain a certain level of installations,with the BWE estimating installed capacity in Germany at 20 GW for the end of 2007, offshore installations should then take over. This shall certainly be a key element to wind power development in the coming years, with construction of numerous wind parks in the United Kingdom, Sweden, Germany,Denmark, Netherlands and France. The continuing decrease of the share of the German market and the delay in development of offshore installations has led us to slightly revise our forecasts downward for the year 2010, now with a figure of  70000 MW installed capacity for this date.The 75000 MW objective (which includes 10000 MW offshore capacity) presented by the European Wind Energy Association (EWEA) seems attainable,however, if the current growth rate is maintained. These forecasts go in the same direction as the “Sustainable Energy Europe” Campaign launched by the European Commission does, which anticipates 15000 new megawatts being installed between 2005 and 2008 .

3. Electricity production from wind power
 in the European Union (in TWh)
EurObserv’ER 2006

EurObserv ’ER 2006