Falling prices, improved technology, global investment, and various incentive programs have spurred the growth of the wind power industry which has now quadrupled the installed capacity it had in 2005.
Global installed wind power capacity grew 21 percent in 2011, with China leading all countries with 43 percent of new global installations, according to a report from Worldwatch Institute.
However while China is the global leader, there is a gap between installed capacity and actual power generated.
«Because of grid connection challenges and other issues, China is struggling to use all of the electricity generated by its turbines,» said Worldwatch Climate and Energy Program Manager Mark Konold, the report’s author.
Several Chinese provinces, including Inner Mongolia and Gansu, are reported to have lost a significant portion of their generation capacity because of technical problems. Improvements are under way, with China planning to invest more than $400 billion to fully integrate its total installed wind capacity by 2015.
Following China’s lead in increasing the global capacity of wind energy are the U.S. (17 percent), India (7 percent), and Germany (5 percent).
While increasing capacity in 2011 by 27 percent more than in 2010, wind power still accounts for only less than 3 percent of the United States’ total power generation.
The growth was credited to the country’s Production Tax Credit, which helped finance approximately 4,000 megawatts of new capacity. The tax credit reduces corporate income tax by 2.2 cents for every kilowatt-hour produced. Nearing its scheduled expiration date at the end of 2012, failure to give the tax credit an extension could affect the industry negatively, the report said.
In the European Union, with Germany at the lead, economic instability had some negative impacts on its wind power – pushing future growth projections down and potentially hampering investment, the report added.
Meanwhile, wind power prices have fallen to $1.2 million per megawatt for the first half of 2011 due to improvements in supply chain efficiency and economies of scale, the report indicates. The excess capacity to build machines and flood the market of Chinese manufacturers also played a role.
With the influx of better technologies in the market, these factors are expected to reduce wind energy costs by 12 percent in 2016 – making it cost competitive with coal, gas, and nuclear power.