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The Rise of Wind Energy

  • 8 March 2021 8 March 2021

This third article in our series, “The Energy Transition – Post-COVID 19”, considers the latest developments in the wind energy sector – widely acknowledged as one of the most promising of the renewables.

When the COVID-19 pandemic hit, the wind energy supply chain experienced major disruption, particularly with construction and assembly of wind turbines. Many large wind farm equipment suppliers faced production shutdowns, causing backlogs and delays in order fulfilment. Further, many wind energy projects were temporarily halted or stalled due to lockdowns and social distancing measures. This caused a fall in demand for wind farm equipment and turbines, resulting in major manufacturers such as Siemens and Nordex experiencing net losses for the first half of 2020.

Despite the impacts of COVID-19 on energy consumption, according to the International Energy Agency (IEA), renewable energy still managed to account for 90% of all new electricity generation in 2020. Out of that total, the IEA expects wind power to account for close to 33% of all new renewable electricity generating capacity in 2020 (approximately an 8% increase from 2019), which is second only to hydropower.

The end of 2020 in fact saw the wind energy industry shake off the pandemic-related disruptions earlier in the year, with turbine manufacturers’ order books for the whole of 2020 pushing past 2019 levels due to the recovery in the last seven months of 2020. The offshore wind sector in particular, was observed to have only been mildly affected by the pandemic due to long project lead times. For onshore wind, the IEA sees overall capacity additions accelerating into 2021 due to a wave of delayed onshore projects becoming operational in light of key countries such as the US and Europe passing regulations allowing for flexible commissioning deadlines. Overall, the IEA expects annual net wind capacity additions to grow by 8% year-on-year for 2020.

The promise of wind energy

Currently and traditionally, Europe is and has been dominating the global wind turbine energy market, mainly due to high levels of appreciation and concern for environmental sustainability across the region. With wind energy already supplying just above 20% of electricity demands in Europe, the European Union aims for this number to hit 50% by 2050.

In the United States, the IEA found that the COVID-19 pandemic caused almost no slowdown in the market, with a record amount of new capacity additions in the first half of 2020. The US already has the second largest installed capacity for onshore wind farms globally and is further forecast by the IEA to lead the world in installed offshore wind capacity by 2024, with the market to emerge in the next five years.

Asia is catching up, with China already the world leader having more than a third of the world’s wind installed capacity, and a recent surge of projects in Taiwan and Vietnam, and to a lesser extent, Japan and South Korea. The region is projected to experience a substantial compound annual growth rate of more than 5% between 2020 and 2025 – with estimates by the International Renewable Energy Agency providing that by 2050, Asia would account for more than 50% and 60% of global onshore and offshore wind power installations, respectively.

The potential of offshore wind

Onshore wind farms are particularly restricted by land constraints as well as public opposition to developments near where people live. In contrast, offshore wind farms not only have the vast ocean for potential developments, but also face less resistance because they are located far away from where people live. The greatest advantage of locating turbines offshore however, is that they are able to generate more energy over the ocean. The development of floating wind turbines has added an additional layer of flexibility with the ability to redeploy turbines where economic and/or climate drivers apply.

Since wind is both stronger and more consistent off the coast than on land, the largest offshore wind turbines can produce between 14 to 15 megawatts of power, while the largest onshore turbine can only reach about 4 to 5 megawatts, according to Aurora Energy Research. At its maximum potential, offshore wind production could reach more than 120,000 gigawatts, or 11 times the projected global electricity demand in 2040.

Although onshore wind currently dominates the global turbine market, the grand promises of offshore wind farms have led countries to bet big on the technology, with the price of offshore wind power falling by one-third year-on-year. Bloomberg recently reported an estimated 25 gigawatts of power capacity generated by offshore wind farms in 2020, which is expected to more than double by 2025.

Largely unaffected by the COVID-19 crisis, offshore capacity additions are expected to hit a record 7.3 gigawatts in 2021 according to the IEA, with major turbine manufacturers announcing large projects in the US, Taiwan, China and Europe.

Wind energy projects on a whole however, are still facing some headwinds in the form of policy uncertainties, permit-related and social acceptance challenges, as well as grid connection issues in lesser developed regions. However, with major economies adopting ambitious targets to transition from fossil fuels to renewables, as capital costs continue to fall due to technological developments, and supportive government policies become increasingly prevalent, the wind industry is poised to be one of the main drivers of the renewable energy transition in the coming years.


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