The global wind industry set a remarkable milestone in 2023, installing a record-breaking 117 GW of new capacity, according to the latest Global Wind Report from the Global Wind Energy Council.
This surge in wind energy marks the beginning of an exciting new chapter for the sector, fuelled by accelerated growth and heightened political commitment. The ambitious targets set at COP28, aiming to triple renewable energy capacity by 2030, have significantly amplified interest and investment in wind power.
In 2023 alone, 54 countries across all continents made substantial investments in wind energy, driving a 50% increase in new installations compared to 2022. This global embrace of wind power highlights its crucial role in the future of renewable energy.
In Europe, however, the picture is less rosy. The EU set a clear target for wind and solar in the revised Renewable Energy Directive which entered into force in November 2023. By 2030 these renewable energy sources must reach 42.5% of gross final energy consumption. This means the EU should expand its wind power capacity by 31 GW per year to square the EU target but the sector is not growing fast enough at the moment.
Wind Europe confirms Europe installed 18.3 GW of new wind power capacity in 2023. This is a record amount but far from the 31GW it should be building each year to meet its 2030 climate and energy targets.
Europe needs more wind but before looking into the main challenges and opportunities of this remarkable energy source, let’s delve deeper into its history.
A historical journey through wind power
Wind power, one of the world’s largest and boldest forms of clean energy, has a storied history stretching back millennia. Ancient civilisations harnessed the wind’s strength to accomplish feats beyond human muscle.
As early as 3500 B.C., Egyptians skilfully navigated the Nile River with wind-powered boats and vessels. The evolution of wind technology saw its next significant leap in the seventh century in Iran and Afghanistan, where the first vertical windmills were constructed with ground-positioned drive shafts and attached blades. Europe embraced wind power through the development of horizontal-axis windmills, notably in the Netherlands. These windmills, an advancement over their vertical predecessors, became the hallmark of European innovation.
By the mid-19th century, wind power technology had crossed the Atlantic. In 1857, American engineer Daniel Halliday revolutionised the field by designing the first windmill that could independently adjust to changing wind directions. By 1891, Danish scientist Paul la Cour enabled rural America to harness wind power, discovering that fewer blades allowed turbines to achieve higher rotation speeds and greater efficiency.
The 20th century marked the dawn of large-scale wind power generation. In 1980, New Hampshire became home to the first wind farm, featuring 20 turbines. Then, as we entered the 21st century, global wind power capacity soared to 17.4 GW, driven by technological advancements and significant cost reductions.
Today, wind power is a critical player in the renewable energy sector, with a global installed capacity exceeding 1000 GW in 2023 according to the latest Global Wind Report. This rapid growth highlights its importance as one of the most viable and sustainable energy sources in our modern world. While we’ve briefly covered the basics of how wind turbines have come to be, it’s essential to explore the mechanics and benefits of this powerful renewable resource. Understanding the workings of wind power and its impact on our energy landscape is key to supporting and sustaining this dynamic growth.
Understanding the mechanics of wind power
At its core, wind power harnesses the kinetic energy of wind to generate electricity through sophisticated turbines. These towering structures, typically standing between 80 to 115 metres tall, feature colossal rotors with blades spanning 90 to 150 metres in diameter. When wind speeds exceed 10 km/h, these blades spring into action, setting the rotor in motion.
Positioned at the summit of the turbine tower, the rotor drives a pivotal component known as the nacelle. Inside this housing reside critical elements such as the main shaft, gearbox, and generator, all working harmoniously to transform rotational energy into electrical power.
Optimising turbine performance is achieved through a pitch control system, which adjusts blade angles for maximum efficiency, while a yaw system ensures the nacelle perpetually faces the wind for optimal energy capture.
Ensuring operational safety are anemometers, instrumental in gauging wind speed and direction to fine-tune turbine performance. Additionally, braking systems play a crucial role in safeguarding operations by managing blade movement, enhancing overall turbine reliability.
When wind turbines capture the kinetic energy of the wind, they convert it into electricity, beginning the journey through several stages. Inside the towering turbine, cables carry the electricity to an initial transformer where the voltage is raised from low to medium levels. Next, a larger transformer boosts the voltage to high levels, optimising efficiency and reducing energy loss as it merges into the grid. This high-voltage electricity then passes through transformer stations, where its voltage is carefully adjusted to lower levels before it reaches homes and businesses. In this way, wind power becomes a reliable, renewable source of energy, powering communities and contributing to a sustainable future.
Understanding the intricate workings of wind power not only reveals its technical complexity, but also highlights its pivotal role in the global shift towards sustainable energy solutions. As wind energy evolves and expands, this knowledge lays the groundwork for tapping into its full potential to meet our future energy needs.
Exploring the different types of wind technologies
Wind power harnesses its potential through two primary technologies: onshore and offshore wind farms. Each technology offers distinct characteristics and contributes uniquely to the overall capacity of wind energy. Let’s delve into these two innovative approaches to green electricity generation.
Onshore wind farms
Onshore wind farms dominate global wind energy production, though smaller in scale compared to their offshore counterparts,. Situated on land, these farms offer easier installation and maintenance processes, making them easily accessible and cost-effective. Onshore turbines generate electricity around 30% of the time as their capacity factor – the ratio of actual electrical energy output over a given period of time – typically averages around 30%. This efficiency hinges on factors such as local wind patterns, geographical positioning, and advancements in turbine technology.
Offshore wind farms
Conversely, offshore wind farms are colossal installations located in bodies of water. Despite their higher initial costs for installation and upkeep, these projects harness stronger and more consistent wind speeds. With a capacity factor averaging around 55%, offshore turbines operate at peak efficiency, generating electricity approximately 55% of the time. This heightened efficiency highlights their essential contribution in expanding global renewable energy capacity.
There exists today two principal forms of offshore wind; bottom-fixed and floating.
- Bottom-fixed offshore wind
The predominant form of offshore wind technology, bottom-fixed turbines, are securely anchored to the seabed. This setup is feasible in shallower waters where turbine structures can be firmly embedded into the ocean floor, ensuring stability and efficient power generation.
- Floating offshore wind
In deeper waters where traditional bottom-fixed turbines are impractical, floating offshore wind technology emerges as a beacon of innovation. These turbines are tethered to the seabed using mooring lines, floating atop the water’s surface. While still in its early stages, floating wind farms show immense promise for expanding wind energy capacities in regions with deep oceanic waters.
The distinction between onshore and offshore wind technologies highlights their complementary roles in advancing the global shift towards renewable energy. In 2023, onshore wind installations surged past 105 GW, marking a historic milestone in its contribution to clean energy production. Meanwhile, offshore wind installations reached the second highest new capacity ever with 11 GW. Each technology offers unique advantages, ensuring a diversified and resilient approach to meeting global energy demands sustainably.
Why is wind power important for Europe?
To generate the needed demand for electricity while at the same time decarbonising the power system, all scenarios point towards a strong increase in renewables capacity.
Eurelectric’s Decarbonisation Speedways study illustrates this point, stating that this faster RES rollout responsibility will fall heavily on the shoulders of solar PV, onshore wind and offshore wind. Placing more emphasis on wind power is therefore crucial for reaching the EU’s lofty ambitions. By 2050, it is looking like the electricity generation mix will be dominated by renewables. The graph below shows how both offshore and onshore wind power together will dominate as the principal renewable energy source in the REPowerEU scenario.
The importance of wind power within the European sphere cannot be understated. This is why it is essential to dive in a bit further into its current market status and look at its outlook for 2023 and 2024.
Zooming into the European market status
The volume of new wind power installations is steadily increasing each year. According to WindEurope’s outlook , the EU-27 is projected to add 200 GW of new wind power capacity by 2030. However, this falls short of the EU’s ambitious targets, which require around 33 GW of new capacity annually. For perspective, Europe installed only 18.3 GW of new wind capacity in 2023, with onshore wind installations accounting for 79% of this total. However, it’s important to note that offshore wind installations are expected to see significant growth towards the end of this decade.
What are the main benefits of wind power plants?
Wind power stands out in the renewable energy landscape not only for its role in combatting climate change and reducing reliance on fossil fuels but also for a host of other compelling advantages that make it one of the most promising green energy sources today.
Low operating costs
One of the most important benefits of wind power is its capacity for self-sufficiency. Once constructed, wind turbines generate renewable energy at no additional cost, making them a cornerstone of sustainable development.
System integration
While wind tends to be strongest at night times, solar power generation takes place during the day. Wind power can therefore be seamlessly integrated with solar power, creating hybrid plants that leverage the strengths of both energy sources. This synergy enhances the overall efficiency and reliability of renewable energy systems.
Geographic adaptability
Wind power’s unique attributes extend to its suitability for remote areas. Micro-grid solutions enable the deployment of wind energy in regions with limited connectivity, eliminating the need for costly infrastructure in isolated locations. This brings substantial cost savings and makes renewable energy accessible for more communities.
Predictability
Another advantage of wind power is its consistency. Wind energy operates on a seasonal rhythm providing a predictable and steady energy supply over the medium and long term
Low construction emissions
One of the most common misconceptions about renewable energy, especially wind and solar power, is that significant emissions are produced during the manufacturing and construction of the installations. Evidence have confuted this argument over time. For example, in a recent analysis by the European manufacturer Vestas, they’ve found that it takes just 13 months to generate all the energy invested in the manufacturing of the turbine and the construction of the wind farm.
Environmental impact is another important consideration to take into account, and wind power excels in this arena. The production, transportation, and installation of wind turbines result in much lower emissions and resource consumption compared to other renewable sources. Wind power also boasts low installation and operating costs, short construction times, and innovative cost-saving technologies according to Enel Green Power.
Low maintenance and circularity
Additionally, wind turbines are capable of operating efficiently for over 20 years with minimal need for maintenance thanks to advanced digital monitoring systems. Looking at the end of their lifecycle, wind plants leave almost no trace, encouraging excellent circularity. The land can be restored to its original state, and the materials used in turbine construction can be recycled and repurposed for new installations, further enhancing the sustainability of wind power.
Examining the downsides of wind
While wind power offers numerous benefits, it also faces several significant barriers that must be understood and addressed to advance this renewable energy source deployment effectively.
Tight profitability margins – utilities vs oil & gas
One of the most pressing issues for wind investments is the tight profitability margins for utility companies compared to those in the oil and gas sector. According to the latest Renewables report by the International Energy Agency, profitability margins for utilities can be up to ten time slimmer than those for oil and gas majors. Despite these narrower margins, both industries are increasingly competing in the offshore wind space.
Weighted average net margins of renewable energy companies, large utilities and oil majors
Overcoming these economic hurdles is essential for the continued growth and sustainability of wind energy. To address the profitability challenge, the wind industry needs more conducive permitting, financial incentives, and technological innovations to make wind energy a more attractive investment for utility companies.
Revenue recovery and financial uncertainty
The economic landscape in Europe as in the rest of the world has shifted dramatically due to the impacts of COVID-19 and the Ukraine conflict. Previously, utilities could confidently make investment decisions years in advance, thanks to predictable downward trends in capital expenditure (CAPEX) and costs of capital. This predictability is crucial for all the renewable energy technologies and particularly acute for offshore wind projects, which have longer lead times compared to onshore and photovoltaic projects.
As highlighted by Ørsted’s CEO at Eurelectric’s Power Summit in 2023 offshore timelines range from five to thirteen years between award and execution.
Today, rising costs and volatile commodity prices have raised uncertainty, making it more challenging for developers to secure the necessary multi-billion euro investments. To mitigate these challenges, it is essential to provide a buffer against unpredictable economic conditions and find new de-risking mechanisms. One such buffers is indexing Contracts for Difference (CfDs) to hedge against market volatility. Without such measures, project cancellations are becoming more common.
Additionally, avoiding uncapped negative bidding in renewable energy source (RES) auctions is recommended to stabilise the market and encourage sustainable investment as detailed in our paper. Negative bidding refers to situations where bidders offer to pay the State to be awarded a concession to develop their projects. It’s a market mechanism that tests the appetite for a scarce resource like seabed territories needed to develop offshore windfarms. However, readily available offshore wind sites are a scarce resource globally. As new entrants come into the sector, developers are increasingly required to bid higher concession fees in the hope that a viable investment case will emerge later. This escalating trend suggests that uncapped negative bidding is not sustainable in the long run. Limiting these measures is critical to address current financial uncertainty and ensure the continued development of wind power projects.
Permitting challenges
Permitting remains a serious obstacle for wind energy projects. According to our 2023 Power Barometer a staggering 80 GW of wind projects were stalled in the permitting process in 2022. This issue is further highlighted by the previous year’s report, which revealed that the EU had four times more wind projects awaiting permits than those under construction. The recently adopted Renewable Energy Directive aims to tackle this issue by simplifying bureaucratic requirements and speeding up procedures, while respecting EU’s environmental rules and encouraging citizen participation.
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Infrastructure and grid capacity issues
A critical issue facing wind power development is the lack of grid capacity. This challenge affects both the integration of new generation sources and the connection of new electrified demand. In regions like northern and southern Germany or the UK, there is a geographical mismatch between power generation – mainly offshore – and onshore electricity demand. In both cases wind is mostly generated in the northern side of the countries but demand is highest in southern regions where urbanisation is highest. This complicates the efficient distribution of wind-generated electricity.
Solutions to the infrastructure issue
Infrastructure issues threaten the successful rollout and adoption of wind power across Europe in both the short and long term. However, there are several viable solutions to address these challenges. Let’s dive into them.
- Anticipatory investments
Proactive investments in Europe’s ageing power infrastructure are crucial to ensure grid readiness. Eurelectric’s Grids for Speed study makes a case for anticipatory investments in distribution grids but also recommends similar strategies for high voltage grids.The study shows that adopting a forward looking strategy to grid infrastructure planning and buildout can significantly lower the overall grid investments needs. To put this into number, Europe should invest around €67 billion each year to get its grid infrastructure up to speed with energy transition. Enabling anticipatory investments in the grid however could lower this figure by €6 billion. This approach underscores the importance of enhancing both distribution and transmission infrastructure to support wind energy.
Addressing these infrastructure and grid capacity issues with forward-thinking investments and innovative frameworks is vital for the continued growth and success of wind power in Europe.
- Offshore bidding zone frameworks
Establishing bidding zones frameworks for hybrid offshore wind is essential for maximising the efficient use of offshore renewable energy and interconnector capacity. This is when wind farms are connected through a hub that balances onshore electricity demand with offshore electricity demand across countries. Often, offshore windfarms are connected to a single country. But as we advance the transition, we’ll see more of them connected to several countries or to an energy island. In this way, we’ll have more options to transmit the energy they produce. There are also synergies with the combination of interconnectors within the same hub.
A prime example is the Princess Elisabeth Island project in Belgium, set for completion by mid-2026. This project positions Belgium as a leader in offshore energy innovation, facilitating the integration of offshore wind into the energy system. The project can enhance energy flows between countries, while minimising the need for numerous onshore landing points.
Addressing these infrastructure and grid capacity issues with forward-thinking investments and innovative frameworks is vital for the continued growth and success of wind power in Europe.
In summary, while wind power is a critical player in the transition to renewable energy, it is not without its challenges. Recognising and addressing these downsides is crucial for paving the way forward and ensuring the successful integration of wind power into the global energy mix.
What is the EU doing about wind energy?
As briefly mentioned in our introduction, the wind sector in the EU is facing several challenges from permitting, auction design or supply chain bottlenecks and rising manufacturing competition from China. Among them, however, one of the most pressing issues for the industry is the current stagnating rate of electrification in Europe which causes demand to be lower than supply.
An Action Plan to counter stagnant electrification
Over the past decade, Europe’s electrification rate has remained static at 23% and has now declined to 22%. This stagnation poses a major hurdle in increasing the adoption of renewable energy sources. The current rate is insufficient to meet future energy demands, highlighting the urgent need for greater, demand and enhanced storage solutions. When demand is lower than supply, negative prices occur. This means that a wind developer actually needs to pay to connect the generated power to the grid, rather than the other way around, because of the lack of demand.
Boosting electrification is thus crucial to keep investing in wind and solar. This is why Eurelectric is calling on new EU policymakers to come up with an Electrification Action Plan in the first 100 days of their new mandate. The Plan should set an indicative target of 35% electrification of final energy use across the EU by 2030. To ensure electrification actually picks up on the ground, the plan should also include an electrification indicator in the national energy and climate plans (NECPs) of EU countries to monitor implementation and deliver progress.
A positive signal in this regard came from the EU Council in July 2024. The Council recognised the critical role of electrification in the energy transition by setting it as a priority for the next mandate in its Strategic Agenda 2024-2029.
Implementing the renewable energy directive and fit for 55 package
The implementation of the Renewable Energy Directive and the broader Fit for 55 package, is pivotal creating a more sustainable, efficient and resilient energy system in Europe. These initiatives include targets for renewables consumption, which are essential for driving the necessary changes. The Fit for 55 package aims to reduce greenhouse gas emissions by at least 55% by 2030, which means we significantly need to boost electrification across various sectors, including transportation, heating, and industry. These measures are critical for addressing the challenges faced by the wind energy sector for advancing the EU’s transition to a sustainable energy future.
The path forward for wind energy
As we look to the future, the potential of wind power blows stronger than ever. With record-breaking installations and ambitious targets, wind energy is poised to become a cornerstone of our renewable energy landscape.
However, meeting these goals requires overcoming significant challenges, from infrastructure and grid capacity issues to financial uncertainties and permitting obstacles. By addressing these hurdles with innovative solutions as well as strong policy support, we can unlock the full potential of wind power. This will not only help meet our energy demands, but also drive us closer to a sustainable, carbon-neutral future. The journey of wind power is far from over; in fact, it’s only just beginning.
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Disclaimer: This article is for informative purposes only and may not entirely reflect Eurelectric official positions. For formal positions, please consult our position papers here.