Renewable energy is set to accelerate rapidly in the coming years, especially in the area of wind and solar. Last year, there was a global increase of 77.6 GW in new wind power capacity, with 68.8 GW added for onshore wind and 8.8 GW for offshore wind. As of 2022, the total installed wind capacity worldwide has reached 906 GW, representing a growth of 9% compared to the previous year.[1]
“2 TW milestone is expected to be achieved in just seven years.”
—GWEC
Despite the wind industry taking 40 years to reach the first trillion-watt capacity, Global Wind Energy Council (GWEC), an international trade association, forecasts that the installed wind capacity will reach 1 TW by mid-2023 and 2 TW by 2030. The main reasons for this expectation include:
Many countries, especially European nations, are accelerating their energy transition efforts and reducing dependence on fossil fuels to achieve greater energy security.
The international community's climate commitments.
Figure 1: The sum of global wind capacity from 2001 to 2022
Source: GWEC, Global Wind Report 2023
“Policy support continues to be the main driver of wind power deployment.” —IEA
China, Europe, and the US, the top three regions leading the wind technology, contributed over 70% of the installed wind capacity in the last year. Although China's wind installations fell by 21% to 37.6 GW in 2022 due to the phase-out of the feed-in tariff and COVID-19 restrictions, China is expected to continue its rapid growth in wind energy to meet its target of 33% renewable energy by 2025 under the 14th Five-Year Plan.
European countries have added 19.2 GW of wind capacity and set ambitious renewable energy targets through the REPowerEU program due to growing awareness of energy risks following the Russian invasion of Ukraine. Additionally, under the Green Deal Industrial Plan, the EU recently passed the Net-Zero Industry Act on March 16, 2023, to enhance the competitiveness of net-zero technologies such as wind through subsidies and simplified administrative procedures for projects. These policies have enabled a significant increase in the wind market. [2]
Dissatisfied with the previous year's 8.6 GW capacity of wind energy, the US has formulated the Inflation Reduction Act to boost wind energy capacity, especially in offshore wind. The Act offers a combination of grants, loans, rebates, incentives, and other investments to support clean energy. For offshore wind, the act provides a 30% tax credit to stimulate long-term project development. As a result, the US has a strong potential for wind energy in the next ten years.[3]
Figure 2: New wind power capacity in 2022 by region and top 10 markets
Source: GWEC, Global Wind Report 2023
The biggest obstacle to wind installation is the government.
Based on objective analysis, it is anticipated that global wind capacity could reach 2 trillion after 7 years. However, if the international community wants to achieve the Net Zero Emissions by 2050 Scenario planned by the International Energy Agency, wind power capacity should exceed 3 TW by 2030. In other words, it will be necessary to add an average annual capacity of almost 250 GW every year before 2030. [4]
What is hindering progress toward net-zero in the wind industry at present and in the future? The burdensome and restrictive administrative procedures are the biggest obstacles to developing wind projects. According to statistics, 80 GW of wind energy projects in Europe and more than 18 GW in the US are currently struggling with permitting procedures.
Another government-imposed restrictive criterion is the minimum local content requirement (LCRs). Major economies, including Japan, Korea, the UK, and Taiwan, already have LCRs that the government claims can help develop domestic manufacturing capacity. In Taiwan, strict LCRs require project developers to achieve at least 60% localization in 26 key development items, including domestic vessel services. Some offshore wind developers are concerned about inflexible regulations and are considering discontinuing projects in Taiwan because of the frustration to meet localization rules. The LCRs aim to enhance the competitiveness of the domestic wind industry, but it backfired and caused distress in the development progress.
Figure 3: The target of global wind capacity under the Net Zero Emissions by 2050 Scenario
Source: IEA Wind power capacity in the Net Zero Scenario, 2010-2030
Regulations and policies drive the deployment of wind energy.
Nonetheless, governments must take action to facilitate the development and deployment of wind energy projects. The benefits of wind energy are clear, including a reduction in greenhouse gas emissions and improved air quality. However, regulatory and policy barriers continue to impede progress.
To achieve their green energy targets, governments can start by offering incentives and financial support to renewable energy developers, such as tax credits, low-interest loans, and subsidies for the domestic supply chain, rather than using prescriptive requirements. In the US, the Inflation Reduction Act provides tax credit, loan, fund and other subsidies to enhance domestic manufacturing industries. Moreover, in Germany, the government will give financial support to the domestic supply chain for the localization of renewable projects. By doing so, these governments can create a more favorable environment for wind energy investment, which will not only accelerate the transition to renewable energy but also help to create jobs and boost economic growth.
In addition to financial incentives, governments must also work to streamline the permitting process for wind energy projects. The long and complex permitting process can delay the construction of wind energy projects, which can be costly and frustrating for developers. The EU is aware of such regulatory obstacles, and the Union has proposed REPowerEU, with the main purpose of fast-tracking the green transition, to speed up permitting for renewable projects. Under REPowerEU, renewable energy could be recognized as an overriding public interest, which can avoid legal challenges from existing regulations. Also, mandatory deadlines for the government to end the permitting process, such as grid connection approval, have been clarified. This means that the timeline of the wind project's application, construction, and operation could become easier to handle. [5]
Furthermore, governments should review and revise any regulations that may hinder the development of wind energy projects, such as restrictive local content requirements or outdated electricity regulations. Instead, they should adopt policies that support the growth of the wind energy industry while ensuring that environmental standards are met.
In conclusion, wind energy has tremendous potential to reduce carbon emissions and promote economic growth, but achieving these goals will require concerted efforts from governments worldwide. By offering financial incentives, streamlining the permitting process, and revising regulations that hinder progress, governments can create a more favorable environment for renewable energy investment and help to accelerate the transition to a greener future.
[1] GWEC, Global Wind Report 2023, https://gwec.net/globalwindreport2023/
[2] Net-Zero Industry Act, https://single-market-economy.ec.europa.eu/publications/net-zero-industry-act_en
[3] Inflation Reduction Act Guidebook, https://www.whitehouse.gov/wp-content/uploads/2022/12/Inflation-Reduction-Act-Guidebook.pdf
[4] IEA Wind Electricity Report, https://www.iea.org/reports/wind-electricity
[5] EU to speed up permitting process for renewable energy projects, https://www.consilium.europa.eu/en/press/press-releases/2022/11/24/eu-to-speed-up-permitting-process-for-renewable-energy-projects/