1. 1 Wind’s Role in the Global Energy Market Athens 28-2-2006 Prof. Arthouros Zervos Chairman Global Wind Energy Council President European Wind Energy Association

2. 2 Global representation for the wind energy sector Wind energy is increasingly becoming an international business sector, spreading beyond its original markets in a few European countries, India and the United States. The major manufacturers and project developers now operate across all five continents. At the same time, the leading wind power Associations around the world have become increasingly linked through overlapping membership and bilateral activities. The Global Wind Energy Council (GWEC) has been established to be the global forum for the wind energy sector, uniting the wind industry and its representative associations.

3. 3 The Members of GWEC GWEC represents a broad sectorial and geographical cross section of the Global wind energy community. Members are the leading national and continental associations representing the different continents, plus the major turbine and components manufacturers, developers and energy companies. The members of GWEC operate in over fifty countries and represent: Over 1500 companies, organisations and institutions 99% of the world’s 59.000 MW installed wind power capacity

4. 4

5. 5 The mission of GWEC GWEC’ s mission is to ensure that wind power establishes itself as one of the world’s leading energy sources, providing substantial environmental and economic benefits. The main objective is to promote the development and growth of wind energy around the world through: Policy development To participate in policy and regulatory forums that can assist the creation of frameworks for wind power development. Business leadership To provide the strategic and business leadership needed to engage external stakeholders. Global outreach To work with emerging markets to transfer know-how and strengthen the development of wind energy worldwide. Information and education To serve as a platform for providing quality information, expertise, analysis and data about wind energy.

6. 6 Evolution of energy prices Energy prices have reached a new floor from which they can only recede temporarily.

7. 7 World primary energy demand (IEA) Are the world's fossil fuel resources abundant enough to feed such an impressive growth?

8. 8 Adequacy of Resources The energy outlook studies from government bodies and trans-national organisations present, in consonance, a comforting picture looking to the future: soaring energy needs will be met by an ever expanding supply base. These studies, trusted and quoted by key business players and policy makers, have lately been challenged by a growing faction of dissenters who question their basic assumptions. Concerns over the adequacy of resources have been stirred in the context of consistently rising energy prices

9. 9 Conventional oil discoveries and production Production overtook discoveries in the 80s opening a growing gap: we are consuming every year more than three times as much oil as we can replace Source: F.Varela, RES, GWEC

10. 10 The Oil Gap Oil production will peak in the next decade and decline ever after. Unconventional sources cannot compensate for the massive gap. Source: F.Varela, RES, GWEC

11. 11 Gas discoveries and production Source: F.Varela, RES, GWEC

12. 12 Gas supply forecast vs. projected demand Natural gas production will peak 15 years later and won’t be able to support the expected additions of power generation capacity.

13. 13 Primary energy: oil and gas supply gaps in IEA’s projected demand Source: F.Varela, RES, GWEC The gaps in oil and gas supply combined represent 10% of the primary energy demand in 2020 and 18% by 2030.

14. 14 Gas demand by sector vs. available supply

15. 15 Gas-fired power generation capacity, projected vs. sustainable Source: F.Varela, RES, GWEC

16. 16 Conclusions The world’s energy resources are not sufficient to sustain the expected growth trends. The current fuel mix will change significantly in the mid term future as a growing gap develops between the expected demand and the available supply of hydrocarbons. There will be no such thing as a “business as usual” future. An unforeseen potential will become available to wind energy as a result of gas supply limitations. Up to 1200 GW of extra capacity could potentially be installed by 2030 without major policy efforts as wind power enters its “market era” sooner than expected.

17. 17 The Candidates to Fill the Gas Gap Coal Nuclear Wind Other renewables (PV, Solar Thermal Power, Biomass, Geothermal) The gas gap offers an enormous additional potential for wind power that was not foreseen in the traditional wind capacity forecasts. Not only is this potential technically realizable, but it wouldn't require any extraordinary policy efforts. Although wind power would have to vie against other alternatives for this new market, it clearly stands in a privileged position as one of the most cost-effective.

18. 18 Wind: Competitive Posture Source: Platts Analytics Near-Term Opportunity Wind without support Wind with support New Coal-Fired Generation Cost Long-Term Competitiveness Challenge Period New Gas-Fired Generation Cost

19. 19 Short Term Projections

20. 20 Global growth scenario 2005 – 2010

21. 21 Total MW installed - 2005

22. 22 Annual MW installed - 2005

23. 23 Projected Installations (MW) 2006-2010

24. 24 Total MW installed - 2010

25. 25 Top 15 total installed MW 2006-2010 84.4% 63,700 1. United States15,00019.8% 2. Spain10,00013.2% 3. Germany 6,600 8.7% 4. India 6,000 7.9% 5. Canada 4,300 5.7% 6. France 4,000 5.3% 7. United Kingdom 3,500 4.6% 8. Portugal 3,000 4.0% 9. China 3,000 4.0% 10. Brazil 2,000 2.6% 11. Australia 1,500 2.0% 12. Japan 1,500 2.0% 13. Italy 1,300 1.7% 14. Greece 1,000 1.3% 15. Sweden 1,000 1.3% The rest 11,800 15.6% Total the world 75,500 100%

26. 26 Top 16-30 total installed MW 2006 - 2010 16. Mexico1,0001.3% 17. Norway 900 1.2% 18. Denmark 800 1.0% 19. Korea South 8001.0% 20. New Zealand 8001.0% 21. Taiwan 7000.9% 22. Ireland 6000.8% 23. Netherlands 6000.8% 24. Turkey 600 0.8% 25. Egypt 600 0.8% 26. Austria 5000.7% 27. Poland 400 0.5% 28. Argentina 400 0.5% 29. Belgium 300 0.4% 30. Finland 300 0.4% The rest2,5003.3% 12.3% 9,300

27. 27 WIND FORCE 12

28. 28 Global vision

29. 29 Why Scenarios? images of alternative futures neither predictions nor forecasts image of how the future could unfold useful tools for investigating alternative future developments and their implications Scenarios can create a vision for the future and guide decision makers

30. 30 Are the world’s wind resources large enough and appropriately distributed geographically to achieve a level of 12% penetration? What level of electricity output will be required and can this be accommodated in the existing grid systems? Is wind technology sufficiently developed to meet this challenge? With the current status of the wind industry, is it feasible to satisfy a substantially enlarged demand and what growth rates will be required? Methodology

31. 31 The world’s wind resources are estimated to be 53.000 TWh/year. 2001 global electricity consumption is 15.578TWh/year. This is predicted to rise to 25.579 TWh/year by 2020 (IEA). Lack of resource is unlikely ever to be a limiting factor. The total global wind resource that is technically recoverable is more than twice as large as the projection for the world’s entire electricity demand by 2020. Is There Enough Wind?

32. 32 The world’s wind resources, TWh (World total 53,000 TWh)

33. 33 Offshore wind resources in Europe (electricity production in TWh/year)

34. 34 12% wind powered by 2020 – Annual new capacity MW

35. 35 12% wind powered by 2020 Cumulative New Capacity MW

36. 36 Projected global electricity consumption and wind electricity output % figure is the increase in global electricity demand

37. 37 12% wind power in 2020 – Regional breakdown of GW

38. 38 12% global electricity demand. 716,491 wind turbines installed. 3,054 TW hours of wind powered electricity. 1,245,030 MW wind installed. Cost reduction to 2.45 eurocents/kWh, installation cost of 512 euro/kW. 2,338,000 jobs. Annual investment of 82 billion euro. Cumulative savings of 10,771 million tons of CO 2. Global Summary for the Year 2020

39. 39 Wind energy capacity projections and potential extra capacity due to gas unavailability Source: F.Varela, RES, GWEC

40. 40 EREC - Advanced Policies Scenario for Primary Energy Supply

41. 41 EREC - Advanced Policies Scenario for Electricity

42. 42