How much of the world's electricity supply is generated from wind and who are the leading generators?

Last Updated: August 30, 2011

Worldwide wind power generation exceeded 250 billion kilowatthours in 2009, which is equivalent to the annual electricity consumption of over 22 million average households in the United States. Wind generation increased by about 20% from 2008 to 2009, and has more than tripled since 2004. This growth is mostly due to capacity increases in the United States, China, India, and Western Europe. Despite this growth, the world still generated only 1% of its total electricity from wind power in 2009

Maintaining its position for two years in a row, the United States led all other countries in wind power generation in 2009. The remaining top-ten wind power generators, listed in descending order, were Germany, Spain, China, India, the United Kingdom, France, Portugal, Denmark, and Italy. Although about 35 countries reported significant wind power generation in 2009, these top-ten countries accounted for more than 85% of all wind generation worldwide. Wind generation in China continues to grow rapidly. Wind generation growth in the country increased by an average of 80% each year since 2004 and doubled from 2008 to 2009.

Nearly 20% of Denmark's electricity generation came from wind in 2009. The next highest levels of wind penetration are found in Portugal at 16%, Spain at 13%, Ireland at 11%, and Germany at 7%. No other country surpassed 5% penetration, including the United States, which generated almost 2% of its electricity from wind in 2009.

According to the World and European Wind Energy Associations, installed global wind capacity reached 197,000 megawatts by the end of 2010, with just over 3,000 MW of that total located offshore. Even though offshore development lags behind onshore, generally due to higher costs and technology constraints, over 1,000 MW were built in 2010. Western Europe is home to nearly all existing offshore capacity; Japan and China have started to add offshore wind farms of their own. As of June 2011, there were no operating offshore wind farms in the United States, although the Department of the Interior approved construction plans for the 420-megawatt Cape Wind project off the Massachusetts coast in April 2011.

Over the lifetime of the plant, electricity from wind power generally costs more than electricity from power plants burning fossil fuels.1 However, wind power is expected to continue to grow worldwide because of favorable government policies. Multiple types of government support exist, including a production tax credit and State renewable electricity portfolio standards in the United States, a feed-in tariff (see the "Did You Know" box on the left) in Germany, and wind capacity targets in China.

1 Although wind farms have relatively low operating costs, capital investment costs are significant. In addition, the intermittent nature of wind results in relatively low capacity factors, such that a wind plant will generate less electricity than a conventional thermal or hydroelectric plant of the same size and over the same period of time. As a result of the high capital costs and intermittency associated with wind, the "levelized cost of electricity" (LCOE) – or the sum of the plant's present value of capital and operating costs, divided by its generation over the plant's lifetime – tends to be higher for wind than for most conventional generation types.
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What are renewable portfolio standards (RPS) and how do they affect renewable electricity generation?

Last Updated: January 25, 2013

Renewable portfolio standards (RPS) are policies designed to increase electricity generation from renewable resources, including wind, solar, geothermal, and biomass. While there is no national-level renewable portfolio standard, many states have established their own.

Renewable portfolio standards (RPS), also referred to as renewable electricity standards (RES), are policies designed to increase generation of electricity from renewable resources. These policies require or encourage electricity suppliers within a given jurisdiction to supply a certain minimum share of their electricity from eligible renewable resources as designated by each state. Generally, these include wind, solar, geothermal, biomass, and some types of hydroelectricity, but may include other resources such as landfill gas, municipal solid waste, and marine energy. In addition, some programs also allocate credits for various types of renewable space and water-heating, fuel cells, energy efficiency measures, and advanced fossil-fueled technologies.

Although several RPS or other clean energy proposals have advanced part way through the U.S. Congress in recent years, there is currently no such program in place at the national level. However, many states have enacted RPS programs. These programs vary widely in terms of program structure, enforcement mechanisms, size, and application — no two state programs are exactly the same.

A wide range of policies is considered to be under the RPS umbrella. In general, an RPS sets a minimum requirement for the share of electricity to be supplied from designated renewable energy resources by a certain date/year. Often, the selected eligible resources are tailored to best fit the state's particular resource base or local preferences. Some states also set targets for specific types of renewable energy sources or technologies to encourage their development and use. Some states focus the RPS requirement on large investor-owned utilities, while others apply the standards uniformly across suppliers. (Detailed descriptions of state RPS programs are available from the Database of State Incentives for Renewables & Efficiency.)

Another common feature of many state policies is a renewable electricity credit (REC) trading system structured to minimize the costs of compliance. Here's how it works: a producer who generates more renewable electricity than required to meet its own RPS obligation may either trade or sell RECs to other electricity suppliers who may not have enough RPS-eligible renewable electricity to meet their own RPS requirement. In some cases, a state will make a certain number of credits available for sale. Such a system accommodates timing differences associated with planning and construction of new generation capacity. In general, only one entity — the generator or the REC holder — may take credit for the renewable attribute of generation from RPS-eligible sources. In addition to the cost control mechanism of a REC, many RPS programs have "escape clauses" if renewable generation exceeds a cost threshold.

An RPS is one policy mechanism to encourage development of renewable energy. States with RPS policies have seen an increase in the amount of electricity generated from eligible renewable resources. At the same time, other states without RPS policies have also seen significant increases in renewable generation over the past few years resulting from a combination of federal incentives, state programs, and market conditions. Increases in renewable generation have been driven by the availability of federal tax incentives, as well as by state RPS policies.2

As of January 2013, 30 states and the District of Columbia had enforceable renewable portfolio standards (RPS) or other mandated renewable capacity policies.1 Together, these 31 areas accounted for 69% of all electricity sales in 2011. In addition, seven states had voluntary goals for renewable generation. The most recent new RPS was put in place in 2009 in Kansas, though many states continue to update existing standards. Renewable Portfolio Standards require electricity providers to generate or acquire a certain portion of their power supplies from renewable sources.

Renewable Portfolio Standards require electricity providers to generate or acquire a certain portion of their power supplies from renewable sources.

Renewable portfolio standards have evolved in many states. In California, for example, an RPS of 20% by 2010 (with extension available to 2013) of retail sales was originally enacted in 2002. As of April 2011, the RPS requires California's electric utilities to derive 33% of their retail sales from eligible renewable energy resources in 2020. The law also established interim targets of 20% by the end of 2013, and 25% by the end of 2016, and expanded covered sales to explicitly include local publically-owned utilities.

Solar and wind are expected to show strong growth in the future, partly as a result of RPS programs. Biomass (including wood) is also expected to increase, influenced in part by the federal renewable fuels standard.

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Indonesia: Energy Rich and Electricity Poor

Even though it enjoys sizeable coal and natural gas reserves, Indonesia struggles to provide electricity to its growing economy. Geography is its most obvious challenge. Others include evolving international markets and an energy sector that remains highly politicized.

A vast Southeast Asian archipelago of more than 17,500 islands that straddles the equator, Indonesia has become an established and crucial player in the world’s energy markets. It is endowed with some of the world’s largest reserves of fossil fuels, and in 2011, it was the world’s largest steam coal exporter and the eighth-largest natural gas exporter. Yet, today, energy security has become Indonesia’s paramount challenge. And it appears it will be the country’s preoccupation until at least 2020.

At the heart of the issue is that the economy of world’s fourth-most-populous country (after China, India, and the U.S.), with 243 million people, has been booming at an enviable annual rate of 6% since 2010. But so has its domestic energy consumption, which surged by more than 50% over the past decade on the back of an emerging consumer class. This consumption growth has forced the country to halt exports of oil, temper its natural gas exports, and redirect nearly a quarter of produced coal for domestic production of electricity.

On the other hand, compounded by its geographic complexity, without available electricity imports, and reluctant to rely on diminishing domestic oil supplies that fuel off-grid diesel generators on the nation’s 6,000 inhabited islands, the country has been stricken by a critical undersupply of power. Though it is one of Southeast Asia’s biggest economies, it has one of the lowest electrification rates in the region. This dilemma is underscored by forecasts suggesting that between 2009 and 2019, national electricity demand will increase by an average 9% per year and reach 328.3 TWh in 2020—more than double last year’s figure of 162.4 TWh.

The government’s solution is to seek massive power capacity increases, and it recently embarked on an ambitious plan to add at least 55.3 GW of new capacity and at least 49,299 kilometers of new transmission lines within the next decade. Can Indonesia bypass a number of hurdles and resolve its energy dilemma?

It is important to note that the country has been long-steeped in a festering electricity crisis characterized by rolling blackouts lasting, on a national average, about 3.8 hours per day, according to 2009 figures. As Dr. Mika M. Purra of the Center on Asia and Globalization at the National University of Singapore points out, power shortages have been routine since Indonesia’s independence from the Netherlands in 1949. Moreover, Purra asserts that while modernization of the power sector has been a specific goal of the government since 1998, a “historical narrative reveals repetitive attributes that have continuously stalled any serious efforts to reform the sector, thus causing significant harm to the state, its economy and the general public.” ±±One pervading issue is that the governance structure is based on the dominance of state-owned enterprises, and until recently the government functioned on a constitutional mandate as the sole provider of electricity for the nation. Under the authoritarian regimes of former Presidents Sukarno (1945–1967) and Suharto (1967–1998), the principles of bureaucratization were reinforced and did little to change the structure of state-owned power entity Persero-Perusahaan Listrik Negara (PLN), which held an iron-grip monopoly on the country’s generation, transmission, and distribution.

Only after the Asian financial crisis of 1997–98 and the fall of Suharto’s regime did fundamental changes in the power sector come, Purra says. The new era of democratization of political process achieved, among its most notable changes, passage of Energy Law No. 30 in 2009 (Figure 1). The landmark law allows independent power producers (IPPs) to generate and sell electricity to end users in the Indonesian market, ending PLN’s 60-year-long monopoly as the single electricity supplier in Indonesia.

1. Major players. In a power market regulatory upheaval, Indonesia’s Energy Law No. 30, passed in 2009, allowed independent power producers (IPPs) to begin generating and selling electricity. But state-owned power company Perusahaan Listrik Negara (PLN) generated about 75% of all power in 2012, remains heavily subsidized, holds a monopoly on transmission and distribution grids, and functions as the system operator. This chart shows the major players in Indonesia’s electricity system and how PLN generates revenues and receives subsidies. Source: Differ Group, “The Indonesian Electricity System—A Brief Overview,” differgroup.com/analysis, 2012

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