Wind, Oil and Gas
In 2011, the world’s population reached seven billion. The UN projects that the global population will have increased by another two billion by 2050. This means that the Earth over the course of only a few years will experience population growth equal to the global population at around the time of World War I. At the same time, the populations of the developing countries have a legitimate wish to raise their stand- ards of living. This will lead to higher energy consumption per capita.
If the world remains reliant on non-renewable sources of energy, the Earth will be further burdened by maintaining the population’s energy consumption. The world’s CO2 emissions cause a greenhouse effect which is expected to raise the average temperature by four degrees Celsius in this century. This will lead to further climate changes in the form of more extreme weather conditions such as droughts, storms and flooding, and large areas will be flooded by sharply rising water levels.
Wind power and other renewable energy sources may contribute to sustainable economic growth for millions of people around the world. ”Wind, Oil and Gas” is Vestas’ vision, which expresses the ambition of making wind an energy source on a par with fossil fuels.
Vestas is confident that a robust price on CO2 will pave the way for the necessary climate investments. Such measure would provide industrial and financial investors with a higher degree of predictability than the present quota system, which leads to large fluctuations in the price of CO2. In November 2011, Australia paved the way by introducing a fixed price on CO2.
The credit crisis and the economic slowdown in the OECD countries have made many countries reluctant to go through with climate investments. Continuing global concerns about the economy, tight fiscal policies and the very low gas prices in certain markets will represent a challenge to the wind power industry. The same applies to the historically low prices on CO2 credits which reduce the cost of buying CO2 reductions in e.g. developing countries.
However, a number of countries have now defined long-term national and local climate targets. China has tabled a five-year plan, which includes wind power, whilst the EU has taken the lead by defining a target that 20 per cent of the energy consumption must be covered by renewable energy sources already by 2020.
South America is experiencing high gas prices, and dry summers reduce the amount of hydropower. Consequently, ambitious plans have been proposed for increasing the use of wind power. According to EER, Brazil and Mexico are expected to increase their installed capacity by 3,500 MW and 1,000 MW, respectively, over the next four years, while Chile and Uruguay are also expected to witness strong growth in wind power during the same period and install 605 MW and 450 MW, respectively. For Vestas, total order intake from the Latin American markets in 2011 amounted to 742 MW – almost four times higher than the year before.
In the USA, an agreement on federal climate and energy targets which may underpin the green ambitions already defined by more than 30 states remains pending. Vestas is preparing for the non-renewal of the US Production Tax Credit (PTC) beyond 2012, which will have notable, adverse consequences for the US market, where the lower price of gas squeezes the power price and, by extension, the price of wind power. Vestas encourages the US decision-makers to extend the PTC in order to retain the positive developments in the US wind industry and thus secure many American jobs and a more independent energy supply.
