Manufacturing techniques have been optimised, and mass production and automation have resulted in economies of scale. The cost developments in the GWEO scenarios are based on the assumption of a gradually decreasing capital cost per kilowatt of installed capacity, due to increased deployment, which accelerates technological progress and increases economies of scale in manufacturing, which in turn results in lower equipment costs.
Since this progress will be faster the more units are produced, the cost of wind turbines is projected to decrease most quickly in the Advanced and least quickly in the Reference scenario.
Capital costs per kilowatt of installed capacity are taken as an average of €1,350 per kW in 2009. In the Reference scenario, these costs fall gradually to €1,240 per kW by 2020 and €1,216 by 2030.
In the Advanced scenario, costs will fall more rapidly to reach €1,093 per kW in 2030. Given the high up-front costs of wind power projects, large investments of predominantly private but also public funds are expected to flow into the growing wind power markets.
This investment will directly benefit regional development by creating jobs in manufacturing, transportation, construction, project development and operation and maintenance; providing new revenue sources to local landowners such as a farmers or communities; and increasing the local tax base.
The investment value in the future wind energy market envisaged in this scenario has been assessed on an annual basis. In the Reference scenario the annual value of global investment in wind farm equipment drops by nearly half from €51.8 billion in 2009 to only €26.6 billion by 2015, and then rises again to reach current levels after 2030.
In the Moderate scenario the annual value of global investment in the wind power industry rises from €53.5 billion in 2010 to €79.1 billion in 2015 and €106.5 billion by 2020. Investment rises rapidly during the next 10 years to reach €166 billion by 2030.
In the Advanced scenario the annual value of global investment rises rapidly from €57.5 billion in 2010 to €109.1 billion by 2015, and peaks at €202 billion in 2030.
Although these figures are large, they should be seen in the context of the total level of investment in the global power industry. During the 1990s, for example, annual investment in the power sector was running at some €158–186 billion each year.
Employment
The employment effect of this scenario is a crucial factor to weigh alongside its other costs and benefits. High unemployment rates continue to be a drain on the social systems of many countries in the world. Any technology which demands a substantial level of both skilled and unskilled labour is therefore of considerable economic importance, and likely to feature strongly in any political decision-making over different energy options.
A number of assessments of the employment effects of wind power have been carried out in Germany, Denmark, Spain and the Netherlands. The assumption made in this scenario is that for every megawatt of new capacity, the annual market for wind energy will, as of 2010, create employment at the rate of 14 jobs (person years) per MW installed in that year through manufacture, component supply, wind farm development, installation, transportation, as well as indirect employment.
As production processes are optimised, this level will decrease, falling to 13 jobs per MW by 2020 and 12 by 2025. In addition, employment in regular operations and maintenance work at wind farms will contribute a further 0.33 jobs for every megawatt of cumulative capacity.
Under these assumptions, more than 600,000 people would have been employed in the wind energy sector in 2009. Under the Reference scenario, this figure would decrease to just 463,000 jobs in 2010, then slowly recover to reach 524,000 jobs by 2020 and 809,000 by 2030.
In the Moderate scenario, the wind sector would become a powerful jobs motor, providing ‘green collar’ employment to more than a million people by 2015 and 1.3 million five years later. By 2030 the wind industry would employ 2.6 million people worldwide.
The Advanced scenario would see the employment level rise rapidly to 1.4 million as early as 2015, almost reaching close to 2 million jobs in wind energy by 2020 and going beyond 3 million by 2030.
Carbon dioxide savings
A reduction in the levels of carbon dioxide being emitted into the global atmosphere is the most important environmental benefit from wind power generation. Carbon dioxide is the gas largely responsible for exacerbating the greenhouse effect, leading to the disastrous consequences of global climate change.
Modern wind farm technology has an extremely good energy balance. The CO2 emissions related to the manufacture, installation and servicing over the average 20 year lifecycle of a wind turbine are generally ‘paid back’ after the first three to nine months of operation. Beyond this, wind power produces no CO2 emissions.
The benefit to be obtained from carbon dioxide reductions is dependent on the fuel, or fuels, that wind power displaces; for example, emissions from coal for a kilowatt hour of electricity produced are higher than from natural gas. Calculations by the World Energy Council show a range of carbon dioxide emission levels for different fossil fuels.
Working on the assumption that coal and gas will still account for the majority of electricity generation in 20 years’ time – with a continued trend for gas to take over from coal – it makes sense to use a figure of 600 kg/MWh as an average value for the carbon dioxide reduction to be obtained from wind generation.
Although this will vary from region to region, we have assumed these same average global CO2 reduction value for the regional scenarios as outlined below.
This assumption is further justified by the fact that more than half of the cumulative wind farm generation capacity expected by 2020 will be installed in the OECD regions (North America, Europe and the Pacific), where there is a strong trend for a shift from coal to gas for electricity generation.
Outside of the OECD, the CO2 reduction will generally be higher due to the widespread use of coal-fired power stations. The expected annual CO2 savings from wind energy under the Reference scenario is 243 million tonnes in 2010, passing 500 million tonnes per year between 2015 and 2020, gradually climbing to 843 million tonnes per year of CO2 savings by 2030. This is small compared with the 18.7 billion tonnes of CO2 that the IEA expects the global power sector will emit every year by 2030.
Under the Moderate scenario, wind power would save the emission of a more significant 1.2 billion tons of CO2 per year by 2020, rising to 2.6 billion tonnes by 2030.
Under the Advanced scenario, by 2020 1.6 billion tons of CO2 would be saved every year, and this would grow to a considerable 3.3 billion tonnes per year by 2030– thereby saving a sixth of all CO2 emitted by the electricity sector compared with the IEA’s projections.
However, it is the cumulative effect of these yearly CO2 savings that really matters to the atmosphere. The slow growth of wind energy as envisaged by the Reference scenario would mean that by 2020, wind power would have saved just 5.5 billion tonnes of CO2 globally, and this would rise to 13 billion tonnes by 2030.
A much faster growth such as the one outlined in the Moderate scenario would substantially increase the cumulative CO2 savings, by achieving reductions of 8.5 billion tonnes by 2020 and 28 billion tonnes by 2030. Under the Advanced scenario, these savings would be as high as 10 billion tonnes by 2020 and 34 billion tonnes of CO2 by 2030.
What will make a significant difference to the climate is the speed at which cuts are made. So it is not only the total emissions reductions that are of value, but it is the timing of them.
Wind power’s scalability and speed of deployment is a critical part of any plan to get global emissions to peak and begin to decline by 2020, which is essential to put us on a pathway where global mean temperature rise can be kept below 2°C, the most positive part of the agreement in the Copenhagen Accord.
Research Background
The German Aerospace Centre
The German Aerospace Centre (DLR) is the largest engineering research organisation in Germany. Among its specialities are the development of solar thermal power station technologies, the utilisation of low and high temperature fuel cells, particularly for electricity generation, and research into the development of high efficiency gas and steam turbine power plants.
The Institute of Technical Thermodynamics at DLR (DLRITT) is active in the field of renewable energy research and technology development for efficient and low emission energy conversion and utilisation. Working in co-operation with other DLR institutes, industry and universities, research is focused on solving key problems in electrochemical energy technology and solar energy conversion. This encompasses application oriented research, development of laboratory and prototype models as well as design and operation of demonstration plants. System analysis and technology assessment supports the preparation of strategic decisions in the field of research and energy policy.
Within DLR-ITT, the System Analysis and Technology Assessment Division has long term experience in the assessment of renewable energy technologies. Its main research activities are in the field of techno-economic utilisation and system analysis, leading to the development of strategies for the market introduction and dissemination of new technologies, mainly in the energy and transport sectors.
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