Abstract _______________________________________________________________________ 7
1. Executive Summary _____________________________________________________ 8
　Misleading predictions and the role of IEA (International Energy Agency) _________________ 10
　The 2008 World Energy Outlook ___________________________________________________ 11
　The real significance of wind power: four scenarios ___________________________________ 12
　Model assumptions _____________________________________________________________ 13
　　Model findings _______________________________________________________________________ 17
　Underlying Innovations __________________________________________________________ 17
　　Social Innovation______________________________________________________________________ 17
　Far‐off Gigawatt clusters for wind _________________________________________________ 18
　Breakthrough in regulations ______________________________________________________ 19
　　The problems of non‐renewables ________________________________________________________ 20
　　Political opponents ____________________________________________________________________ 21
　Intermittency and interconnection ________________________________________________ 21
　　Older natural gas plants as back‐up _______________________________________________________ 21
2. Oil peak and the power sector ____________________________________________ 23
3. Wind power: Global market status ________________________________________ 26
　Why is the situation in the wind market so different today from what it was before? _______ 28
　Struggling for take‐off (1996‐2005) ________________________________________________ 29
　　“Teething problems” __________________________________________________________________ 38
　The Globalization of wind power: 2005 and beyond ___________________________________ 40
　　Emergence of new markets _____________________________________________________________ 42
　The situation today _____________________________________________________________ 45
　World annual installations Growth Rates ___________________________________________ 46
　　Component shortages _________________________________________________________________ 47
　The advantages of wind power ____________________________________________________ 51
4. Four World Scenarios for the Wind Sector ___________________________________ 52
　Preliminary remark _____________________________________________________________ 52
　Continuous growth of the wind sector projected _____________________________________ 53
　Model assumptions _____________________________________________________________ 53
　World electricity generation and consumption _______________________________________ 55
　The “effective power capacity” Concept ____________________________________________ 56
　　Managing power reserves and interconnection _____________________________________________ 57
　　Lower capacity factors . higher capital costs . lower fuel costs _________________________________ 57
　The “other renewables” sector ____________________________________________________ 59
　Development of the wind sector and market shares (accompanied by solar) ______________ 60
　Wind annual capacity additions ___________________________________________________ 61
　Overall market conquest by renewables ____________________________________________ 62
　Market development of non‐renewables and CO2‐emissions ___________________________ 65
　Non‐renewable power generation and CO2‐emissions _________________________________ 66
　The model’s meaning in real terms ________________________________________________ 68
　　Territories for wind power ______________________________________________________________ 68
　　Roofs and territories for solar ___________________________________________________________ 68
　Real market trends of wind power in 2007 __________________________________________ 69
　Comparisons with the real world __________________________________________________ 70
　　China _______________________________________________________________________________ 72
5. On the accuracy of Wind Power Installation Forecasts ________________________ 73
　Methodological remark __________________________________________________________ 73
　What do past forecasts on Germany tell us? _________________________________________ 73
　　Cumulative capacity forecasts and reality: Germany __________________________________________ 73
　　Annual additions forecasts and reality: Germany ____________________________________________ 75
　　Outlook beyond 2007: Germany _________________________________________________________ 76
　What do past forecasts in Europe tell us? ___________________________________________ 78
　What do past forecasts for the world wind market tell us? _____________________________ 84
　　Forecasts by the International Energy Agency _______________________________________________ 84
　　The 2008 IEA “blue scenario” for the G8 ___________________________________________________ 87
　The IEA World Energy Outlook 2008 _______________________________________________ 89
　　Revised oil supply and oil price projections _________________________________________________ 89
　　World Energy Outlook 2008 and Wind power _______________________________________________ 89
　BTM Consult’s world market forecasts _____________________________________________ 93
　　Outlook beyond 2007: World ____________________________________________________________ 97
　　Possible causes of stagnation ____________________________________________________________ 98
　Comment on the German case of wind power forecast ________________________________ 99
　　Andalusia - similarities with Germany? ___________________________________________________ 100
　Comment on European wind power forecasts ______________________________________ 102
　Comment on the world market forecasts and IEA practices ____________________________ 106
　Fundamentally positive world perspective _________________________________________ 111
6. Key drivers of future growth ____________________________________________ 113
　Innovations improving wind technology ___________________________________________ 113
　　Small wind systems ___________________________________________________________________ 115
　Innovations regarding system benefits of wind power ________________________________ 115
　　Better weather forecasts ______________________________________________________________ 115
　　Better interconnection ________________________________________________________________ 117
　　Better regulations for interconnection ___________________________________________________ 118
　　Creation of renewable energy zones (CREZ) _______________________________________________ 119
　Enlarging the wind resource _____________________________________________________ 122
　　Development of peripheral locations _____________________________________________________ 123
　　Offshore power generation ____________________________________________________________ 125
　　New offshore foundations _____________________________________________________________ 126
　　Floating turbines _____________________________________________________________________ 126
　　Positive implications __________________________________________________________________ 127
　New investors ________________________________________________________________ 128
　　Investments by emerging economies_____________________________________________________ 129
　New manufacturers ____________________________________________________________ 130
　Drivers from the non‐renewable power sector ______________________________________ 131
　　Competing with new power plants instead of old ___________________________________________ 131
　　Problems of the non‐renewable sector ___________________________________________________ 131
　　Environmental pressures ______________________________________________________________ 132
7. The cost of wind power ‐ empirical trends _________________________________ 134
　Eroding costs over time ‐ the golden end of renewable power systems __________________ 134
　Cost data of wind power in the USA 1999‐2007 _____________________________________ 135
　Wind integration costs _________________________________________________________ 140
　　Wind power full costs in the US _________________________________________________________ 141
　The cost situation in Europe _____________________________________________________ 142
　Operation & management (O&M) costs ___________________________________________ 143
8. The economics of wind power over the next decade _________________________ 146
　The key drivers ________________________________________________________________ 146
　　oil prices will continue to remain high, as will demand for fossil fuels. __________________________ 146
　　Feed‐in tariffs rehabilitated? ___________________________________________________________ 147
　　Wind farms with a higher value than their costs ____________________________________________ 147
　The price of power compared over the next 10 years _________________________________ 150
　　Generation costs in 2008 ______________________________________________________________ 151
　　The cost situation in 2020 _____________________________________________________________ 152
　Renewable energy . boom or hype? ______________________________________________ 153
　Some remarks on coal‐fired power, compared with wind _____________________________ 154
　　Conclusions _________________________________________________________________________ 156
　Some remarks on the costs of gas‐fired electricity ___________________________________ 157
　The costs of nuclear power ______________________________________________________ 158
　　Liability exemption and more ___________________________________________________________ 159
　　Conclusion regarding cost comparisons ___________________________________________________ 161
　Why more wind power comes at a profit __________________________________________ 162
　　Reduction of volatility by integration over vast areas ________________________________________ 167
　　Wind energy as a base load source ______________________________________________________ 168
　Case studies for wind integration: Texas and else ____________________________________ 169
　　The chicken and egg problem ___________________________________________________________ 171
　　More case studies ____________________________________________________________________ 171
　Conclusion: wind integration is doable . interconnection a cost saver! __________________ 174
9. Obstacles and how to resolve them _______________________________________ 175
　Birds ________________________________________________________________________ 175
　Ugly wind farms? ______________________________________________________________ 176
　Polls show strong support for wind power _________________________________________ 178
10. Transmission . chief roadblock or key to save money? _____________________ 179
　Wind fears ___________________________________________________________________ 179
　The tasks _____________________________________________________________________ 181
　　How much back‐up energy and back‐up capacity is needed? __________________________________ 182
　Balancing, peak reserves, grid issues ______________________________________________ 183
　　Balancing ___________________________________________________________________________ 183
　Creating a low cost back‐up hierarchy _____________________________________________ 186
　Conclusion ___________________________________________________________________ 188
11. References _________________________________________________________ 189

Abbreviations
CAGR Compound Annual Growth Rate
CF capacity factor
CF-100 capacity factor of 100% - a theoretical capacity able to deliver base-load with a 100% availability over 8760 hours per year
CHP combined heat and power
EWEA European Wind Energy Association
EWEC European Wind Energy Conference
GWEC Global Wind Energy Council
HVDC High voltage direct current (connection)
IEA International Energy Agency
MW Megawatt (1,000,000 W)
NFFO Non Fossil Fuel Obligation
NGCC Natural Gas Combined Cycle plant
O&M operation and maintenance (costs)
PPA Power purchase agreement
PTC Production Tax credit (a tax deduction of some 1.8-2.1 US-Cents)
US United States of America
WWEA World Wind Energy Association

Cover Pictures
Vestas V90-3,0 MW Bockinghalde / Germany, courtesy of Vestas
Q7/ Princess Amalia wind farm, off the Netherlands, by Jerome Guillet

Abstract
This study is about growth, past forecasts and the future prospects of wind energy.

Wind power net capacity additions over the last ten years (1998-2007) have showed a mean growth rate of 30.4 percent per year, corresponding to a doubling of net additions every 2 1/2 years.
In 2007, net capacity additions reached 19553 Megawatts, a level that most energy pundits failed to anticipate. Net additions, in 2007, were 417 percent bigger than the mean estimate published by the International Energy Agency (IEA), in its World Energy Outlook 1995-2004 editions.

In the IEA’s most recent World Energy Outlook (2008) scenario, it again predicts a low growth “reference scenario” for wind power with only a 2.2 percent increase of annual wind capacity additions over the 2010-2030 period. The IEA acknowledges that the “risk of a supply crunch” for oil after 2010 could be ”driving up oil prices . possibly to new record highs”, but then fails to revise its forecasts for renewable energies. Not Surprisingly, the IEA forecasts have historically proven to be empirically unsound.

This study takes a different view, developing four global scenarios for the future of wind power, after scrutinizing some of the most established forecasts for the wind sector. It assumes a continuous growth of global wind power additions over the next decades. The driving force for this growth is not ecological or moral motivations but the demonstrable economic advantages of wind power, including the abundant and cost free primary energy source (wind) which never runs out, easy technology access, short time to market, stable life-cycle-costs and continuous cost reductions due to progress on the learning curve.

In scenario A, the observed mean annual growth rate of wind power additions, 30.4 percent, from 1998 to 2007, is used as a proxy for further expansion. As a result, wind energy will have conquered a 50 percent market share of global new power plant installations by 2019 and a close to 100 percent market share by 2022, alongside with solar and other renewables such as hydro and biomass. Global non-renewable power generation would peak in 2018 and could be phased out completely by 2037.

The scenarios B, C and D, with half the annual growth rates for wind power or/and electricity consumption growth, show similar results: Market conquest of the wind sector (together with other renewables) is expected in 2019 (scenario C), 2031 (scenario D) or 2039 (scenario B). Non-renewable power generation will peak between 2014 and 2032 and could be phased out within the following two decades.

The study concludes that roadblocks against wind power growth, such as fluctuations of wind, lack of grid connections and lack of reserve capacities, will be overcome through: planning, growing price incentives derived from the observed increase of oil prices and the restructuring of electricity markets (unbundling). Technical improvements will further propel the wind industry to deliver ever more affordable, secure and clean electricity at a very high speed that will be unattainable by more traditional technologies such as nuclear, natural gas or coal. Wind and solar, accompanied by hydro power, biomass and geothermal energy will pave the way to a 100 percent renewable power generation, very probably within the first half of this century.

Figure 1 world wind power capacity and annual additions Figure 4 IEA projection of annual wind capacity additions 20102030,　from World　Energy Outlook 2008 〔Energy Watch Group(2008)によるWind Power in Context - A clean Revolution in the Energy Sectorから〕