Onshore wind energy is geographically highly concentrated, with over 80% of the global capacity in just five key nations, a trend sustained over the last half-decade. China leads this pack by a significant margin, its 2022 installed capacity being more than double that of the closest contender, the United States. China may lead in generation capacity, but the picture changes when we look at wind energy penetration which indicates the proportion of wind-based power in the total grid-connected supply. This highlights the progress of various European nations in shifting towards renewable energy sources. These countries were among the first to incorporate wind power in their grid mix, and they now dominate the top 10 list for wind energy penetration, indicating their unwavering commitment to sustainable energy practices.
Figure 3 1 – Top 10 Countries in: renewable energy generation capacity, renewable energy penetration. (IRENA, 2023; Energy Institue, 2023)
China’s Role and Growth in the Global Wind Market
China’s position as the world’s leading wind power market is bolstered by a shift towards market-driven growth. From 2022, the country embraced a grid-parity model, aligning with its ambitious goal to source at least 50% of the incremental power sector demand from renewables under the 14th five-year plan (Energy Foundation, 2022). Despite reaching only 13.8% of consumption from wind and solar combined (Balkan Green, 2023), China remains steadfast in its commitment, even in the face of steady coal-based capacity growth.
The future landscape involves several 10GW wind and solar farms, spurred by active government support and bolstered by China’s robust manufacturing base, which supplies 60% of the global onshore wind turbine nacelles. Chinese Original Equipment Manufacturers (OEMs) are gaining prominence globally, a paradigm shift from conventional norms, fueled by increased competition within China.
US Inflation Reduction Act: A Catalyst for Growth
The US takes a significant leap in its commitment to renewable energy through the groundbreaking Inflation Reduction Act (IRA). This policy, unparalleled in its scale, not only revitalizes domestic manufacturing but also serves as a global catalyst for energy transition. By extending production and investment tax credits for wind power businesses, IRA provides stability and visibility, attracting investments and revitalizing critical manufacturing sectors like blade production.
This policy not only reinvigorates existing facilities but also prompts the establishment of new manufacturing capacities. With six new facilities announced for onshore wind power equipment, the US market is on the brink of a substantial surge. This emphasis on local supply aligns with the government’s goals of a 50%-52% economy-wide emissions reduction and a net-zero emissions grid by 2035 (Reuters, 2023), underscoring the pivotal role onshore wind energy plays in the envisaged rise of renewable energy share.