China has fallen a point in the index because more than a quarter of electricity being generated by existing installations is not grid connected. This wasted electricity is forcing it to focus on improving grid infrastructure and imposing tighter regulations on project approvals. However, it may take until 2015-16 to close the gap between grid-connected capacity and installations, reducing its short to medium term wind sector growth prospects.
In the US, expiry of the PTC at the end of 2012 is causing a rush by developers to beat the deadline. However, uncertainty over an extension being secured before the start of the November elections, if at all, is already causing some to abandon projects, resulting in a three point fall in the index.
Germany has also fallen by one point, mainly as a result of increasing concerns about its ability to connect its significant offshore wind project pipeline to the grid. The Government is seriously considering ways to support grid development, butc.1GW of projects already face delays because of grid bottlenecks.
In India, expiry of the accelerated depreciation tax break incentive at the end of March has caused concerns that the wind sector could slow down as it adjusts to becoming more generation-driven. The scheme triggered the majority of India’s recent wind sector growth, and this uncertainty has resulted in an index score decrease.
Canada has dropped an index point following the Ontario Government’s announcement that it will reduce premium rates for wind power by 15%.
Brazil has also dropped in the index following Q1 indications that almost 1GW of wind projects secured in last year’s auction are delayed with no certain start date. Unsustainably low wind power prices as a result of the auctions may slow the rapid growth seen to date, and a number of auctions have already been delayed this year.
Meanwhile, Japan leaps up in the index following April’s release of Government recommendations on the FIT to be implemented from July. Wind power was recommended at JPY23.10 (€0.21) /kWh for plants with capacity over 20kW, and JPY57.75 (€0.53) /kWh for smaller plants.
According to the Spanish Wind Business Association, Spain’s wind energy sector recorded its lowest ever annual growth in 2011. A total of 1,903 MW is currently registered but is still waiting to begin operation, and around half of pipeline capacity will have problems being built. The current market stagnation, as a result of heavily reduced subsidies in recent years, signals poor short to medium term growth prospects.
Poland’s offshore wind potential received a boost in Q1, attracting 47 applications from investors looking to develop projects off its Baltic coast. At the end of March, it awarded the first licence to develop an offshore wind farm, and climbed a point in the index as a result.