Germany Wind Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Germany Wind Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The wind energy installed capacity in Germany is expected to register a CAGR of over 3% during the forecast period of 2021-2026, reaching a value of approximately 75 GW by 2026, up from 61 GW in 2019. The country registered a slowdown in installations when the pandemic first arrived in the country, but the recovery in May and June 2020 was strong, outpacing 2019 installations during the same period. Germany completed wind energy auctions from January to June 2020, but the overall capacity awarded in the country was significantly lower than last year, with some delays due to COVID‑19. Factors such as supportive government policies and efforts to meet the rising power demand using renewable energy sources and to decrease dependency on fossil fuels are expected to drive the market in the coming years. With the advancement in technology and the involvement of major companies like General Electric Company, the market has become very competitive, which is resulting in the reduction of installation and operational cost. In 2019, the Levelized cost of energy for offshore and onshore wind power had been estimated as USD 0.125/KWh and USD 0.062/KWh, respectively. On the other hand, the slow licensing procedure for the distribution of contracts has decreased the annual installation since 2016. Along with this, regulatory difficulties and lawsuits against new wind projects are posing threats not only to the turbine manufacturers but also to Germany's renewable energy and emissions reduction targets.

Key Highlights

• Although offshore wind energy accounts for only 12.3% of the overall wind energy installed capacity in the country as of 2019, this segment is expected to witness significant growth in the coming years owing to the lack of land for onshore wind projects and declining CAPEX requirements for offshore wind projects in the country.
• With a significant share in energy production, wind energy met one-fourth of demand for electricity in 2019 and is expected to reach a share of 32% by the end of 2030, which is not only going to invite locals to invest in the wind energy market but presents a huge opportunity to the players involved in Germany wind energy market in the near future.
• Reforms in licensing and regulatory policies are required to improvise the situation.

Key Market TrendsOffshore Wind Farms to Witness Significant Growth

• Installation of wind farms in offshore areas is becoming lucrative because of the higher wind speed in comparison to on the land. So, offshore wind power generation capacity is higher per amount of capacity installed.
• The onshore and offshore wind combined now is Germany’s greatest power source, accounting for 75.05 TWh during the first half of 2020, or 30.6% of the country’s generation. That was 11.7% compared to 2019. Due to numerous winter storms, its share even rose to 45% of net electricity generation in February 2020.
• The wind power companies have installed taller wind turbines and deepwater areas due to improvements in the wind turbine materials used, which allows the turbines to exploit higher altitude winds. Moreover, these new turbines have larger blades and can sweep more area than smaller turbines. The growing size of wind turbines has helped lower the cost of wind energy, indicating that it is economically competitive with fossil fuel alternatives.
• Out of the total, 225 billion kWh was generated from renewable in Germany; offshore wind farms generated 19.4 billion KWh in 2019, holding a significant share of 9%. These ongoing developments are expected to drive the offshore segment during the forecast period.

Stringent Regulations and Slow Approval Procedure to have a Negative Impact on the Growth of the Wind Energy Market

• The number of permits issued for onshore wind turbines in Germany dropped by more than 70%, comparing to 1228 licenses in 2016 and less than 400 in 2019. Due to this additionally approved capacity of onshore wind farms fell from 3.6 GW to 1.3 GW.
• On the flip side where Germany is facing a lack of area for turbine installation, and on the other hand, mandatory 1000 meter distance from the residential area to install a wind turbine along with lawsuits brought by different organizations, has put the construction of around 2000 turbine with a combined capacity of 11 GW on hold.
• Along with the aforementioned factors, Germany also lacks the necessary grid connection infrastructure. With a lack of more than 5000 km of grid connectivity, the growth of the wind market has been hampered, which requires to be upgraded.
• The current political and regulatory situation is a severe challenge for Germany to meet its 65% renewable share goal by 2030. Serious and bold steps must be taken to improve the derailed situation.

Competitive Landscape

The German wind energy market is partially fragmented. Some of the major companies include Siemens Gamesa Renewable Energy SA, General Electric Company, Enercon GmbH, Nordex SE, Senvion SA, and PNE AG.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

Siemens Gamesa Renewable Energy SA
General Electric Company
Enercon GmbH
Nordex SE
Senvion SA
PNE AG

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