Wind power in Germany, Denmark, the United States, the Netherlands, China and India.

 

The first wind power plants had been developed in the 1880s, but it was not until the 1970s that the currently dominant design was settled upon and deployed. Denmark, the United States, Germany, the United Kingdom, Sweden and the Netherlands were early movers in wind energy innovation but followed different approaches. In the 1970s and 1980s, Germany and Sweden had focused on public R&D support for a quick scaling up to a range of 2-4 megawatts (MW), but provided only limited support for market formation. Premature scaling up failed to build a sustainable industry, and established utilities had little incentive to deploy high-cost, intermittent wind turbines which were difficult to maintain. Denmark, the Netherlands and the United States focused on R&D and deployment of smaller-scale and simpler wind turbines in niche markets. Denmark established a test station for wind turbines in 1978, issued type approvals from 1979 and introduced investment and production subsidies in the same year (Grübler and others, forthcoming). The result was sustained growth of the industry, the entry of new actors (farmers and municipalities), and very high reliability (98 per cent in 1985) (Heymann, 1998). While the Netherlands had also established a test field in 1981, it focused on competition rather than cooperation among manufacturers, which led to much slower progress and to lower reliability. In the United States, a number of subsidy schemes were introduced that led to a boom in wind power so that, by 1986, California had installed 1.2 GW of wind power which, at the time, constituted 90 per cent of the world total. However, “subsidy harvesting” by the private sector spurred hasty development and inadequate operational testing. By 1985, only 38 per cent of wind-power plants in the United States were operating properly; and the industry collapsed in 1986 when Government subsidies were reduced. From the 1990s, many increasingly large wind power projects were undertaken in Denmark, Germany and Spain. The cost per kWh of wind power was halved between 1980 and 2000, and reliability, efficiency, level of turbine noise, and grid stability greatly improved. Germany introduced feed-in tariffs, and average wind farm and turbine prices declined by 30 per cent from 1991 to 1996 (a learning rate of 10 per cent), with export prices at about half the average domestic price. Germany’s feed-in tariffs effectively cross-subsidized technology transfer and the development of wind power industries in other countries, including China and India. From 1996 onward, prices began to increase in Germany, owing to rapidly expanding demand both domestically and for exports to emerging economies and later owing to higher commodity prices.


China and India have used industrial policy, including legal provisions, duties, taxes and subsidies, to support domestic wind power research and the wind power industry since the 1990s. Further, China mandated domestically produced components and, along with India, instituted domestic technology certification programmes. As in the case of Europe, wind power plants were not necessarily built in the most suitably windy locations: the local policy environment was a much more important factor. For example, in India in 2004, 57 per cent of wind power capacity was installed in Tamil Nadu which only has 7 per cent of the wind resources (Global Wind Energy Council, World Institute of Sustainable Development and Indian Wind Turbine Manufacturing Association, 2011). By the end of 2010, 194 GW of wind power capacity had been installed worldwide (figure II.6), of which 84 GW were in EU, 40 GW in the United States, 42 GW in China and 13 GW in India. In 2010, 35.7 GW of new capacity were installed, which was 6 per cent less capacity than in 2009. More than half of this new capacity was installed in China (16.5 GW) and India (2.1 GW), compared with 9.8 GW in EU and 5.1 GW in the United States (Eurobserver, 2011)