Europe - Eastern Europe targets more wind energy

Wind turbines increasingly becoming part of the Eastern European landscape

Alongside vast fields of barley and wheat and windswept coastlines, a new feature is increasingly becoming a part of the Eastern European landscape: wind turbines. While Germany, Spain and Denmark are still by far the biggest wind-producing countries on the Continent, Eastern Europe is fast becoming a new frontier in wind power development as Europe tries to find environmentally friendly ways to satisfy growing energy demand and to meet ambitious targets for renewable energy.

When the European Union committed in March to cutting greenhouse gas emissions by 20 percent by the year 2020, it also agreed that a fifth of its energy would come from renewable sources like wind and solar power. According to the European Wind Energy Association, wind - which now satisfies about 3 percent of total European energy consumption - is likely to cover as much as 16 percent by 2020. The European Commission reports that the amount of electricity produced from wind has grown by an average of 26 percent a year since 2001.

But markets in the major wind-producing countries, while still expanding, are nearing capacity. "These markets are starting to get tapped out, and it's increasingly difficult to get in," said Catalina Robledo, an analyst specializing in European wind energy for Emerging Energy Research, a consulting company based in Barcelona and Cambridge, Massachusetts. Turning to their neighbors may be the answer. "Some of these developers are looking to move to Eastern Europe where there are still possibilities for market entry," Robledo said. "There's definitely an interest in what's happening there."

Emerging Energy Research projects a 13-fold growth in Eastern European wind power capacity by 2015, to 7,552 megawatts from 569 megawatts in 2006, with most of the increase in Poland, Turkey, the Czech Republic and Hungary. Some of the largest players in the global wind market, including Iberdrola of Spain; Acciona of Spain; EuroTrust of Denmark; and Good Energies, based in London, are getting a foothold in the region, often in partnership with local firms. The European Bank for Reconstruction and Development, which was established after the fall of Communism to help rebuild the economies of central and Eastern European countries, is also investing in wind projects throughout the area.

"A year ago I would have told you that outside of the old European Union, there's not much worth looking at in terms of development," said Michael Rand, a principal banker in the European Bank's power and energy utilities unit. "In the last 12 months, the market has really taken off." While wind capacity in Eastern Europe is still far less than in Western Europe - Spain alone has 11,600 megawatts - the region has nevertheless taken a giant leap forward. In Poland, considered the most attractive of the Eastern markets because of state support, good wind conditions and the availability of land, the European Commission says the coastal area has potential similar to that of Denmark and the interior of the country similar to that of Germany.

Power companies are taking notice. Good Energies, for example, announced last month a €175 million, or $234 million, 120-megawatt wind farm, enough to supply power to 72,000 homes, in Poland, to be installed by late 2008. The managing director, Andrew Lee, said that the company considered Poland a "core market" and expected to expand to 500 megawatts by 2010. Opportunities still exist in Western Europe, Lee said, "but they tend to be smaller and a lot of the best sites have been taken." He added that the company preferred "being in new countries and new areas where opportunities are expanding rather than trying to fight in a mature market."

There are clear advantages to harnessing wind power in a bid to solve the global warming crisis, Arthurous Zervos, the president of the European Wind Energy Association, said. First, it is cheaper than other forms of renewable energy: an average of about 6.5 euro cents per kilowatt hour, compared with about 10 cents for biomass and more than 30 cents for photovoltaic solar power, according to the European Commission. Wind farms are quick to install, taking only a few months to build after permits have been granted, versus years for traditional power plants. And technology has advanced considerably in the past few years, so that individual turbines can now produce 3.5 megawatts of power each, translating into more energy potential in smaller wind farms.

The result is the prevention of 80 million tons of carbon from being emitted into the air per year, according to the European Wind Energy Association. By 2010, the amount saved will rise to 140 million tons a year. But there are also significant barriers to wind power development, and the emerging economies in Eastern Europe produce their own set of challenges. These countries have long relied on coal, oil and gas for their energy, and hesitate to switch to other forms. While wind might be cheaper than other sources of renewable energy, it is still more than twice as expensive as coal, for example, which accounts for more than 90 percent of the energy used for heating in Poland; or gas, which provides 75 percent of heat in Hungary. "They're still probably trying to figure out, 'What's in it for us?' " said Robledo of Emerging Energy Research.

In addition, the regulatory framework for renewables is much less developed in Eastern Europe than in some of the Western countries. Incentives like subsidies and tax credits are being adopted, but are not as mature as those in Germany, for example, where the government offers developers a lucrative tariff for the first five years of wind installment and a guaranteed tariff above the market price after that. Potential developers have also run into problems with government quotas. In Hungary, growth has been capped at 330 megawatts by 2010 - the amount the government has estimated that the grid infrastructure can handle. But permits have already been granted that add up to a much larger capacity, so there is a scramble to figure out which can go forward, while developers push for infrastructure upgrades that will allow them to get in on the game.
Finally, Eastern European countries are saddled with issues affecting the entire industry, including the shortage of wind turbines as manufacturers struggle to keep up with demand and the challenges of persuading local communities to live in sight of dozens of 80-meter, or 262-foot, wind turbines.

The EU targets, which are being revised for individual countries, are already encouraging countries to make changes in their regulatory frameworks to resolve some of these issues; and some investors, including the European Bank for Reconstruction and Development are working directly with local governments and the European Commission to iron out problems. In Hungary, for example, the bank paid for a consultant to analyze the amount of wind capacity the grid could sustain, and is using the results in talks with the country's energy office about the number of licenses granted, while the government is reviewing its energy law, including options for renewable-energy subsidy plans.

Despite the various obstacles, people in the industry are confident that the burgeoning market will spur new legislation, and vice versa, to help wind sweep through Eastern Europe. "What are the alternatives?" Zervos, of the wind energy association, asked. "Without a big contribution from wind we cannot achieve EU targets. It's the realization of this fact that's making changes happen."

Online editorial www.windfair.net
Posted by Trevor Sievert, Online Editorial Journalist
wind energy, wind farm, renewable energy, wind power, wind turbine, rotorblade, offshore, onshore

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