Over the past seven years, the Close Brothers Renewable Energy team has become the leading funder of energy projects in the UK. In this report we run the rule over wind energy globally as well as in the UK*, which is the second most profitable wind energy industry in Europe.
The cumulative capacity of installed wind power worldwide reached nearly 743 gigawatts (GW) in 2020 - new installations of wind power capacity reached approximately 93 GWs worldwide (1 GW can power 300,000 homes). Onshore wind energy still makes up the largest share of wind capacity, however offshore farms have seen a greater growth rate in recent years.
As technologies improve and become more economically viable to implement, the global share of electricity generation from renewable sources has risen over the past decade. In the coming 20 years, renewable energy consumption is expected to keep growing steadily as countries replace traditional fossil fuel sources with renewable technologies.
The largest wind power market in the world is China, with a capacity of over 237 GWs of wind power installed, while among developing economies, India and Mexico took the lead for newly installed wind power capacity as these emerging markets - Southeast Asia and Latin America - are predicted to propel the wind energy market forward.
Global renewable energy generation as a share of total generation continues to grow as renewable technologies become more cost-effective; for example, onshore wind energy capacity grew nearly five-fold between 2009 and 2020 to 700k megawatts (MW).
At a European level, the UK has the third highest installed wind power capacity, behind Germany and Spain. Germany has installed roughly 60.8 GWs worth of onshore and offshore wind power plants, more than double the cumulative capacity available in Spain, where 25.7 GWs have been installed so far.
Unsurprisingly, wind electricity generation was also highest in Germany (126 TW hours), with the UK in second place (63.5 TW hours). In total, wind power production in the EU reached 426 TW hours.
Europe installed 14.7 GW of new wind capacity in 2020. This was 6% less than in 2019 and 19% less than what was expected pre-COVID. The EU installed 10.5 GW with 80% of the new wind installations being onshore. Wind accounted for 16% of the electricity consumed in 2020 and Europe now has 220 GW (194 GW onshore and 25 GW offshore) of wind capacity. The Netherlands installed the most wind capacity in 2020, most of it offshore wind. Norway built the most onshore wind, with Spain and France not far behind. Germany’s new installations were its lowest since 2010.
Looking ahead, Europe is expected to install 105 GW of new wind farms over 2021-25, with over 70% of likely to be onshore wind. At 18 GW, the UK is set to install the most new wind power in Europe between 2021- 25, followed by Germany, France, Sweden and the Netherlands.
Combined onshore and offshore wind power capacity in the United Kingdom reached over 24 GWs. Onshore wind energy still makes up the largest share of wind capacity, however offshore farms have seen a greater growth rate in recent years. The British government aims to reach 40 GW offshore wind capacity by 2030 in an effort to achieve carbon neutrality.
The UK generated 64.3 terawatt (TW) hours’ worth of electricity and heat through wind power with onshore wind farms producing 32.19 TW hours of power, which was minimally more than the amount generated by farms situated offshore. Wind power capacities have steadily increased, with renewable energies taking up a greater share of the UK's energy mix following the phasing-out of coal.
The load factor (the ratio of how much electricity was produced as a share of the total generating capacity) for electricity generation from both onshore and offshore wind in the United Kingdom has fluctuated since 2010.
Since 2009 the installed capacity of onshore wind sites has steadily increased. In 2020; figures reached a high of 14,282 MWs, roughly 4 MWs more than installed across offshore sites.
Clyde Wind Farm has the largest number of wind turbines out of all onshore wind farms in the United Kingdom. The South Lanarkshire, Scotland located wind farm operates 152 wind turbines, 12 more than Whitelee, which ranked second. That year, the Clyde Wind Farm also had the greatest installed capacity , at 350 MWs.
Key projects funded by the renewable energy team
Pogbie wind farm
Debt funding was secured to allow the acquisition and development of the Pogbie wind farm. In one of the first deals of its kind in Scotland, an onshore wind farm has been financed with the goal of targeting fuel poverty in Scotland. The innovative deal structure for the Pogbie wind farm brings together multiple stakeholders, including the Scottish Investment Bank. The focus of the project is to support not-for-profit energy supplier, Our Power, in its fuel poverty alleviation aims. Once finalised, Pogbie wind farm will contain 12 turbines with a total capacity of 9.6 MWs. Nett surpluses from the project will go towards communities that are suffering fuel poverty.
Crossdykes wind farm
The Energy team financed the first subsidy-free development to be project-financed. In total, there will be 10 x 4.6MW turbines, the highest onshore wind turbines to receive planning consent in the UK, to date. Tip heights will top out at 176.5m – almost as high as the Gherkin building in the City (180m)!
For context, an average onshore wind turbine with a capacity of 2.5 MW–3 MW can produce more than 6 million kWh in a year – enough to supply 1,500 average households with electricity. The bigger the turbine, the more power is produced.
The Energy Finance team also funded the construction of three further 2.75MW wind turbines in Scotland in a deal with Muirhall Energy, worth £9m; this brought to four the number of projects between the two companies, totalling £75m. The site now contains 11 turbines with a capacity of 26.95 MWs that can generate enough electricity to power nearly 14,000 homes, and at 120m in length, the new turbines’ rotors are the UK’s largest.
*Sources available on request