The global wind industry posted its second-best year ever in 2021, posting 12% growth and adding 93.6 GW of new capacity onshore and offshore, bringing the global fleet to 837 GW.

Slight dips in new building onshore in China and the US compared to 2020 meant that additions were 1.8% less than in 2020, the Global Wind Energy Council (GWEC) said in its Global Wind Report 2022.

The report branded current energy market structures "perverse," and called for wholesale reforms by governments worldwide to support renewables energy in order to stand any chance of meeting net-zero goals by 2050.

Despite the second year of the coronavirus (COVID-19) pandemic, the global wind industry continued to show resilience and maintain growth across the vast majority of markets.

Onshore, Europe (+19%), Latin America (+27%) and Africa & Middle East (+120%) had record years for new installations, but total onshore wind installations in 2021 were still 18% lower than the previous year, dragged down slower growth in China (+30.7 GW) and the US (+12.7GW), the world’s two largest wind power markets.

By contrast, offshore had its best year ever, with 21.1 GW of offshore capacity commissioned, three times more than in 2020. China accounted for 80% of new capacity, helping it overtake the UK as the world’s largest offshore wind market in cumulative installations. Globally, offshore brought its market share of new installations to 22.5% in 2021.

Yet the GWEC stressed the growth figure of 12% needed to quadruple by the 2030 if the world is to stay on course for a 1.5°C pathway and net zero by 2050.

“Scaling up growth to the level required to reach Net Zero and achieve energy security will require a new, more proactive approach to policy making around the world... The last 12 months should serve as a huge wake-up call that we need to move decisively forward and switch to 21st century energy systems based on renewables,” said GWEC CEO Ben Backwell.

The report also found that auctioned capacity was up 153%, with 88 GW awarded globally, of which 69 GW (78%) was onshore and 19 GW (22%) was offshore.

 

Wake-up call

Looking ahead, it forecast that the compound annualised growth rate (CAGR) for wind installations for the next five years was 6.6%, which equates to 557 GW of forecast installations from 2022-2026. This means that wind is way behind what net zero demands, as at current rates of installation, the report forecast that by 2030 the world will have less than two-thirds of the wind energy capacity required for a 1.5°C and net-zero pathway, putting climate goals in danger.

The report called for more supportive policies from governments and the international community.

“Decisively addressing issues such as permitting and planning will unlock economic growth and create millions of jobs by letting investment flow, while allowing rapid progress on our climate goals. If we carry on with “business as usual”, however, we will miss this unique window of opportunity,” Backwell said.

The emerging issues of energy security and volatile prices, exacerbated by Russia’s invasion of Ukraine, have pushed renewables up the investment agenda and should focus on fostering faster and more widespread growth in the wind sector.

“The events of the last year, which has seen economies and consumers exposed to extreme fossil fuel volatility and high prices around the world, are a symptom of a hesitant and disorderly energy transition, while Russia’s invasion of Ukraine has exposed the implications of dependency on fossil fuel imports for energy security,” Backwell said.

“The last 12 months should serve as a huge wake-up call that we need to move decisively forward and switch to 21st century energy systems based on renewables,” he added.

 

Market design

The report said that the current energy crisis is the consequence of energy markets built around fossil fuels. This meant that the wind industry faced higher costs amid perverse market design: The report called for policymakers need to re-evaluate markets to align with economic and social objectives.

“Policymakers must guarantee regulatory stability as well as overcome permitting bottlenecks and further develop grids. The wind industry stands ready for a massive deployment of renewable capacity; national and regional policy must clear the path for this,” said Xabier Viteri Solaun, managing director of Iberdola Renewables.

The report welcomed the energy system reform packages underway in Europe and other regions, in light of the Ukraine crisis.

For example, the EU is giving great priority to the Green Deal targets, via its new REPowerEU programme, as a key way to reduce reliance on Russian oil and gas.

 

Looking ahead

GWEC said that such initiatives could significantly revise upward its five-year forecast this year.

However, the body called for policymakers to accelerate permitting procedures for wind projects in the near term and initiate structural market design changes in the mid-term to enable an acceleration in renewable energy deployment.

The good news is that the energy policy environment is in flux, and GWEC said it expected a wave of new policy initiatives to address the gap between current installation rates and the trajectory needed to achieve net zero and energy security.

However, reforming the market will need such developments as removing direct and hidden subsidies or advantages for fossil fuels generation; prioritising land/seabed allocation, procurement, construction, grid connection and dispatch for renewables-based generation; accounting for the socioeconomic and environmental costs of carbon; and realigning electricity markets to consider system value more widely.

Technology innovation and scale are also necessary for supporting stability, flexibility and responsiveness as fossil fuels are phased out.

The report is welcome news for the wind industry and for the energy transition as a whole, but the rate of change is still woefully short of what is needed to reach net zero.

Global leaders put 2050 and net zero at the very top of the political agenda at COP26 in Glasgow in 2021.

Yet they also warned that the targets would be difficult to meet. This latest wind report demonstrates just how difficult, but still possible, that task is.