MAKE's most recent wind power outlook for Europe expects 161GW of new capacity to be added in the region over the next 10 years making it the second-largest region in the world after China, reaching 302GW of total cumulative capacity by the end of 2026.
Wind power capacity added in Europe in 2016 amounted to 13.7GW. Annual capacity is expected to increase by 11% YoY in 2017 due primarily to record installations in Germany, the UK and, to a lesser extent, France.
Developers in Germany are rushing to complete projects before the FIT level decreases toward the end of 2018, when it will be phased out and replaced by auctions. Following the results of the first three onshore wind bidding rounds held in 2017, Germany will fine-tune its auction system in 2018 to enhance clarity over project commissioning timelines and completion rates. Offshore in Germany, the world’s first zero-subsidy bids provided an indication of the extreme cost reduction the industry contends it can achieve.
The onshore wind market in the UK is experiencing a surge in new installations as grace periods under the closed Renewable Obligation scheme allow developers to connect wind farms until January 2019. Only onshore wind projects on remote Scottish islands will participate in the third CfD auction, but industry pressure and policy openness may lead to the reintroduction of conventional onshore wind within the fourth CfD auction. A few developers are currently working on a set of large, subsidy-free onshore projects. After record low bids delivered cost reduction of 50%, the offshore wind sector will remain the main growth driver in the UK wind market, growing at a CAGR of 40%.
While the last FIT projects come online in France, new onshore wind plants will be granted a double route to market. Projects of up to six turbines will have open access to market, while projects of seven turbines or more will need to compete in tenders. After years of stalling, the French offshore wind market is ready to deliver 4GW of capacity from 2017 to
2026.
Growth in other markets in Europe – primarily Turkey, Spain and the Netherlands – provides a boost to the region. Eastern and Southern European markets are respectively challenged by regulatory hurdles and low power demand, but maintain positive long-term prospects. Offshore wind will strengthen its position as a growth driver in mature Northern European markets, while making inroads into new countries supported by steep cost reduction, with 39GW commissioned across the region in the next 10 years.