Strong expansion before the switch to tendering
With a net capacity of 1,892 megawatts in the first six months of the year, 2016 looks like being a good year for land-based wind energy expansion. This strong expansion is being driven by the allocation of suitable sites and priority areas in many federal states. There has also been a surge of permits in order to secure the option of installing turbines with legally fixed EEG remuneration rates. In Germany the wind industry is working hard to develop innovation and production bases further. It also aims to use its leading technology to further expand its strong position in what are generally stable markets abroad.
The strong extension in the first half of 2016 has been driven by the allocation of suitable sites and priority areas. The zone allocations made in the federal states last year continue to have an effect, even though some have been revoked as a result of political decisions in Bavaria or judicial decisions in Schleswig-Holstein. The availability of space also explains some of the significant regional variations. “The German market is concentrating less on the coastal states, and developing in an increasingly balanced manner. This is underlined by the healthy development in the typically landlocked states. Federal government must re-evaluate the restriction of expansion in regions with grid bottlenecks as early as 2018 so that this can be reversed if and where necessary”, says Hermann Albers, president of the BWE.
Forecast for 2017 dependent on existing approvals
The industry expects a similar level of growth for 2017 as in this year. By the end of May projects have been approved with a total volume of around 3,200 megawatts. A large proportion of these will have been realised by the end of this year. Operators and official agencies are expecting a further surge of approvals by then. Whoever secures approval before the end of the year and erects their turbines in 2017 or 2018, will still get the legally fixed rates of remuneration for the power they produce. The extraordinary degression starting in March 2017, and particularly the intensified degression from October of the same year render expansion clearly less attractive. “Although we will see a significant decline in new builds over the year, it will probably have virtually no impact on the overall capacity that will be installed in 2017. This is because higher turbine yields will to a certain extent compensate for the drop in remuneration”, says Matthias Zelinger, managing director of VDMA Power Systems. It can be assumed that in 2018, the second transition year, there will be significantly less expansion, he adds. “We expect that most of the projects approved by the end of 2016 will be realised in 2017, and will not be involved in tendering. The extension in 2018 will primarily consist of the tenders awarded in 2017.”
Working harder to develop business bases
While there is still uncertainty amongst developers, manufacturers are in principle taking a positive view of controlling quantity through tendering, as long as it secures continuous expansion, fosters greater competition and contributes to market proximity. Production and product development will have to be adjusted to a market volume of initially 2,800 megawatts a year. Attention should however be paid to ensure that the legally fixed tender quantities do not lead to the stagnation of what has up to now been a positive development of the wind industry in Germany. Projects that are not realised, despite winning a tender, must not be allowed to curtail the volume of expansion in the long term. These quantities must be taken into consideration in later tenders, because in the long term an ambitious expansion and a lively market, also with regard to quantity, is necessary if the manufacturers are to maintain their technological leadership and their production capacities in Germany. Up to now the manufacturers have owed their strong position, also in the global market, to the fact that the technology was being further improved in the German domestic market. “This didn’t just happen by itself. Innovative strength has always required hard work in this industry, and now it needs even harder work.” states Zelinger.
World market at the same high level
The demand for leading turbine technology Made in Germany in international markets has remained at the same high level. VDMA Power Systems forecasts a global market for onshore wind turbines in an order of magnitude of 55,000 megawatts in 2016, which will continue the same in the following years. Due to their current strong role in the worldwide consolidation process, German companies have the chance to expand their position in growing markets. The largely closed Chinese market on the other hand remains a problem. Strict demands regarding the local share of value creation hamper competition in other markets. This is where the federal government should be working harder for fair market opportunities of the German wind industry.
The energy system’s cheaper key player
In Germany, onshore wind production is still a cost-effective key player in the shift to renewable energy use. The nationwide strong expansion makes sense as far as energy production is concerned. “Nowadays wind forecasts are very precise. The actual amount that is fed into the grid hardly deviates from what is forecast. Wind turbines provide important system services, such as maintaining voltage stability. It would make sense to integrate the turbines into the redispatch system. There are also alternatives to reducing production in the event of grid bottlenecks. We welcome the opportunity provided by EEG 2017 to use this electricity before it reaches the grid junction point. This has created the first interfaces for sector coupling. Producers can develop their own markets by means of business-to-business solutions. This is fully in keeping with market integration and makes a serious contribution to system transformation. It also supports the achievement of the federal government’s climate protection goals”, says Hermann Albers.
Figures at a glance:
| Status of onshore wind energy expansion | Capacity in MW | Nos. turbines |
| Net expansion in the first six months | 1,892.2 | 579 |
| Gross expansion in the first six months | 2,053.4 | 726 |
| Amount repowered | 308.2 | 106 |
| Reduction in the first half of 2016 | 161.21 | 147 |
| Accumulated turbines on 30.6.2016 | 43,543.7 | 26,561 |
Factsheet: Status of Land-Based Wind Energy Development in Germany -1st Half of 2016
Source: VDMA Power Systems, July 27th, 2016
www.vdma.org
