Winds Role in the Global Energy Market

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Winds Role in the Global Energy Market
Prof. Arthouros Zervos Chairman
Global Wind Energy Council
President European Wind Energy Association

• Athens 28-2-2006

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Global representation for the wind energy sector

• Wind energy is increasingly becoming an
  international business sector, spreading beyond
  its original markets in a few European countries,
  India and the United States. The major
  manufacturers and project developers now operate
  across all five continents. At the same time,
  the leading wind power Associations around the
  world have become increasingly linked through
  overlapping membership and bilateral activities.
• The Global Wind Energy Council (GWEC) has been
  established to be the global forum for the wind
  energy sector, uniting the wind industry and its
  representative associations.

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The Members of GWEC

• GWEC represents a broad sectorial and
  geographical cross section of the Global wind
  energy community.
• Members are the leading national and continental
  associations representing the different
  continents, plus the major turbine and components
  manufacturers, developers and energy companies.
• The members of GWEC operate in over fifty
  countries and represent
• Over 1500 companies, organisations and
  institutions
• 99 of the worlds 59.000 MW installed wind power
  capacity

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The mission of GWEC

• GWEC s mission is to ensure that wind power
  establishes itself as one of the worlds leading
  energy sources, providing substantial
  environmental and economic benefits. The main
  objective is to promote the development and
  growth of wind energy around the world through
• Policy development
• To participate in policy and regulatory forums
  that can assist the creation of frameworks for
  wind power development.
• Business leadership
• To provide the strategic and business leadership
  needed to engage external stakeholders.
• Global outreach
• To work with emerging markets to transfer
  know-how and strengthen the development of wind
  energy worldwide.
• Information and education
• To serve as a platform for providing quality
  information, expertise, analysis and data about
  wind energy.

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Evolution of energy prices
Energy prices have reached a new floor from which
they can only recede temporarily.
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World primary energy demand (IEA)
Are the world's fossil fuel resources abundant
enough to feed such an impressive growth?

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Adequacy of Resources

• The energy outlook studies from government bodies
  and trans-national organisations present, in
  consonance, a comforting picture looking to the
  future
• soaring energy needs will be met by an ever
  expanding supply base.
• These studies, trusted and quoted by key business
  players and policy makers, have lately been
  challenged by a growing faction of dissenters who
  question their basic assumptions.
• Concerns over the adequacy of resources have been
  stirred in the context of consistently rising
  energy prices

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Conventional oil discoveries and production
Production overtook discoveries in the 80s
opening a growing gap we are consuming every
year more than three times as much oil as we can
replace
Source F.Varela, RES, GWEC
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The Oil Gap
Oil production will peak in the next decade and
decline ever after. Unconventional sources cannot
compensate for the massive gap.

Source F.Varela, RES, GWEC
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Gas discoveries and production
Source F.Varela, RES, GWEC
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Gas supply forecast vs. projected demand
Natural gas production will peak 15 years later
and wont be able to support the expected
additions of power generation capacity.
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Primary energy oil and gas supply gaps in IEAs
projected demand
The gaps in oil and gas supply combined represent
10 of the primary energy demand in 2020 and 18
by 2030.
Source F.Varela, RES, GWEC
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Gas demand by sector vs. available supply
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Gas-fired power generation capacity, projected
vs. sustainable
Source F.Varela, RES, GWEC
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Conclusions

• The worlds energy resources are not sufficient
  to sustain the expected growth trends. The
  current fuel mix will change significantly in the
  mid term future as a growing gap develops between
  the expected demand and the available supply of
  hydrocarbons.
• There will be no such thing as a business as
  usual future. An unforeseen potential will
  become available to wind energy as a result of
  gas supply limitations. Up to 1200 GW of extra
  capacity could potentially be installed by 2030
  without major policy efforts as wind power enters
  its market era sooner than expected.

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The Candidates to Fill the Gas Gap

• Coal
• Nuclear
• Wind
• Other renewables (PV, Solar Thermal Power,
  Biomass, Geothermal)
• The gas gap offers an enormous additional
  potential for wind power that was not foreseen in
  the traditional wind capacity forecasts. Not only
  is this potential technically realizable, but it
  wouldn't require any extraordinary policy
  efforts.
• Although wind power would have to vie against
  other alternatives for this new market, it
  clearly stands in a privileged position as one of
  the most cost-effective.

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Wind Competitive Posture
Near-Term Opportunity
Long-Term Competitiveness
Challenge Period
Wind without support
Wind with support
New Coal-Fired Generation Cost
New Gas-Fired Generation Cost
Source Platts Analytics
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Short Term Projections
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Global growth scenario 2005 2010
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Total MW installed - 2005
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Annual MW installed - 2005
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Projected Installations (MW) 2006-2010

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Total MW installed - 2010

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Top 15 total installed MW 2006-2010

• 1. United States 15,000 19.8
• 2. Spain 10,000 13.2
• 3. Germany 6,600 8.7
• 4. India 6,000 7.9
• 5. Canada 4,300 5.7
• 6. France 4,000 5.3
• 7. United Kingdom 3,500 4.6
• 8. Portugal 3,000 4.0
• 9. China 3,000 4.0
• 10. Brazil 2,000 2.6
• 11. Australia 1,500 2.0
• 12. Japan 1,500
  2.0
• 13. Italy 1,300 1.7
• 14. Greece 1,000 1.3
• 15. Sweden 1,000 1.3
• The rest 11,800 15.6
• Total the world 75,500 100

84.4 63,700
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Top 16-30 total installed MW
2006 - 2010
16. Mexico 1,000 1.3 17. Norway
900 1.2 18.
Denmark 800 1.0 19. Korea South
800 1.0 20. New Zealand
800 1.0 21. Taiwan 700 0.9 22. Ireland
600 0.8 23. Netherlands 600 0.8 24.
Turkey 600 0.8 25. Egypt
600
0.8 26. Austria 500 0.7 27.
Poland 400 0.5 28.
Argentina 400 0.5 29.
Belgium 300 0.4 30.
Finland 300 0.4 The
rest 2,500 3.3

12.3 9,300
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WIND FORCE 12

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Global vision
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Why Scenarios?

• images of alternative futures
• neither predictions nor forecasts
• image of how the future could unfold
• useful tools for investigating alternative future
  developments and their implications
• Scenarios can create a vision for the future and
  guide decision makers

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Methodology

• Are the worlds wind resources large enough and
  appropriately distributed geographically to
  achieve a level of 12 penetration?
• What level of electricity output will be required
  and can this be accommodated in the existing grid
  systems?
• Is wind technology sufficiently developed to meet
  this challenge?
• With the current status of the wind industry, is
  it feasible to satisfy a substantially enlarged
  demand and what growth rates will be required?

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Is There Enough Wind?

• The worlds wind resources are estimated to be
  53.000 TWh/year.
• 2001 global electricity consumption is
  15.578TWh/year.
• This is predicted to rise to 25.579 TWh/year by
  2020 (IEA).
• Lack of resource is unlikely ever to be a
  limiting factor.
• The total global wind resource that is
  technically recoverable is more than twice as
  large as the projection for the worlds entire
  electricity demand by 2020.

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The worlds wind resources, TWh (World total
53,000 TWh)
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Offshore wind resources in Europe (electricity
production in TWh/year)
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12 wind powered by 2020 Annual new capacity MW
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12 wind powered by 2020 Cumulative New Capacity
MW

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Projected global electricity consumption and
wind electricity output figure is the increase
in global electricity demand
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12 wind power in 2020 Regional breakdown of GW
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Global Summary for the Year 2020

• 12 global electricity demand.
• 716,491 wind turbines installed.
• 3,054 TW hours of wind powered electricity.
• 1,245,030 MW wind installed.
• Cost reduction to 2.45 eurocents/kWh,
  installation cost of 512 euro/kW.
• 2,338,000 jobs.
• Annual investment of 82 billion euro.
• Cumulative savings of 10,771 million tons of CO2.

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Wind energy capacity projections and potential
extra capacity due to gas unavailability
Source F.Varela, RES, GWEC
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EREC - Advanced Policies Scenario for Primary
Energy Supply
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EREC - Advanced Policies Scenario for Electricity
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