Global Wind Report 2022: GWEC

In News

• Recently, the Global Wind Report for 2022 was published by the Global Wind Energy Council (GWEC). 
  • The Global Wind Energy Council (GWEC) was established in 2005 to provide a credible and representative forum for the entire wind energy sector at an international level.

Major Highlights of the Report

• New offshore installations in 2022 are likely to decline to the 2019 / 2020 levels, primarily due to the reduction of installations in China.
• Market growth is expected to regain momentum from 2023, eventually passing the 30GW-mark in 2026.
• Growth in capacity: New installations of 93.6 gigawatt (GW) in 2021 brought global cumulative wind energy capacity to 837 GW, a year-on-year (YoY) growth of 12 per cent.
  • More than three times the capacity of offshore wind compared to 2020 was installed.
  • Offshore wind energy generation increases return on investment, along with reducing greenhouse gas emissions.
• Carbon dioxide emissions can reduce by 0.3-1.61 gigatonnes every year by 2050 if offshore wind energy generation is scaled up. 
• India specific study:
  • In India, more than 1.4 GW of wind was installed in 2021, exceeding the 1.1 GW of installations during the previous year.
  • The Union Ministry of New and Renewable Energy (MNRE) has set a target of installing 5 GW of offshore capacity by 2022 and 30 GW by 2030. India is yet to develop its offshore wind energy facility.
  • India can generate 127 GW of offshore wind energy with its 7,600 km of coastline.
• Global Study:
  • The offshore wind market enjoyed its best year in 2021, with 21.1 GW commissioned.
  • The global onshore wind market added 72.5 GW in 2021.
  • But the world’s two largest markets, China and the United States, failed to install new onshore capacity last year.
  • Europe, South America, Africa and West Asia increased their onshore wind installations by 19 per cent, 23 per cent and 120 per cent.
  • In China, the termination of the feed-in-tariff, a policy mechanism designed to accelerate investment in renewable energy technologies, led to a 39 per cent drop in installations to 30.7GW.
  • In the United States, a 25 per cent decline to 12.7GW was mainly due to COVID-19-associated supply chain issues and disruptions.
  • In sub-Saharan Africa, South Africa is the largest wind energy market in terms of installed capacity.
  • GWEC market intelligence expects that 557 GW of new capacity will be added in the next five years under the current policy environment. That is more than 110 GW of new installations each year until 2026.

Wind power in India

• Wind power generation capacity in India has significantly increased in recent years; the total installed wind power capacity is around 40 GW, the fourth largest installed wind power capacity in the world.
• Wind power capacity is mainly spread across the Southern, Western and Northern regions.
• Wind power accounts for nearly 10% of India’s total installed power generation capacity.

Challenges with Wind sector

• Inconsistent policy environments focused on short-term political aims.
• Badly designed markets which do not enable bankable renewable energy projects.
• Infrastructure and transmission bottlenecks.
• A lack of adequate industrial and trade policies related to renewable technologies Hostile political or misinformation campaigns.
• Reverse auction route in the wind sector, lack of financial incentives and difficulties in finding land at windy sites and power evacuation infrastructure for the projects.
• GST rate: The GST rate on wind turbines has been increased from 5% to 12% which has become an additional 7% cost in the wind turbine as there is no pass through.
• Wheeling Charges & Captive use: Currently all states with viable wind resources have different wheeling, transmission and banking policies; in few of the states these policies change very frequently on yearly basis.
• Without the necessary amplification, restricting global warming over pre-industrial levels to 1.5 degrees Celsius, a target set by the Paris Agreement and achieving Net Zero emissions by 2050 may become difficult.

Government Policies to promote Wind Sector

• Accelerated Depreciation benefit and concessional custom duty exemption:
  • The Government is promoting wind power projects in the entire country through private sector investment by providing various fiscal and financial incentives such as Accelerated Depreciation benefit; concessional custom duty exemption on certain components of wind electric generators.
• Generation Based Incentive (GBI) Scheme:
  • It was available for the wind projects commissioned before 31^st March 2017.
• National Institute of Wind Energy:
  • Technical support including wind resource assessment and identification of potential sites through the National Institute of Wind Energy.
• Inter-state transmission charges have been waived off:
  • In order to facilitate inter-state sale of wind power, the inter-state transmission charges have been waived off for wind projects to be commissioned by June, 2025.
• Issued Guidelines for Tariff Based Competitive Bidding Process:
  • For Procurement of Power from Grid Connected Wind Power Projects.

Way Forward/ Suggestions 

• Planning barriers: The report urges governments to tackle issues such as planning barriers and grid connection challenges.
• Grant permits: To sustain and increase growth in wind-based generation capacity, policymakers are urged to streamline the procedures to grant permits, including land allocation and grid connection projects.
• Policy priority: Workforce planning for large-scale renewables deployment should be an early policy priority and investment in grids must treble from current levels through to 2030.
• Annual transition-related investment in the energy system must increase 2.7 times from the 2019 level, to $5.69 trillion a year till 2030, International Renewable Energy Agency estimated.
• Public-private cooperation: GWEC also called for greater public-private co-operation to confront the new geopolitics of the wind supply chain.
• A stronger international regulatory framework is needed to address the increased competition for commodities and critical minerals.
• Change in the current Bidding Mechanism: Unlike solar, wind power development cost varies from state to state. There is a need to develop the wind project site, collect data and then carry out biddings.
• 5% GST should be introduced on sale of Renewable Power: This will complete the loop as currently there is no GST cost pass through.

Source: DTE