Growth in U.S. Wind Power Requires Federal Support

A bright spot in an otherwise rather weak U.S. economy, the U.S. wind energy market continued to grow strongly in 2011, with wind power accounting for a “remarkable 32 percent of all new electric capacity additions in the United States last year and accounting for $14 billion in new investment,” according to a new report from the Dept. of Energy (DoE).

Ongoing growth in the US wind power market — which remained one of the largest and fastest growing in the world in 2011 - highlights the importance and beneficial effects of strong federal, state and local government support and policy frameworks, according to the DoE's “2011 Wind Technologies Market Report.”

Highlighting the boost wind energy investment is having on job creation and U.S. manufacturing, the percentage of wind power equipment made in the USA also increased dramatically in 2011. Nearly 70 percent of the equipment installed at U.S. wind farms was manufactured in the U.S., according to the report. That's up from 35 percent in 2005 and includes wind turbines, wind towers, turbine blades, gears and generators. The DoE's put an interactive map of US wind energy manufacturing facilities online.

Wind power's growing role in the U.S. economy

Commenting on 2011's strong performance, Energy Secretary Steven Chu said, “This report shows that America can lead the world in the global race to manufacture and deploy clean energy technologies. The wind industry employs tens of thousands of American workers and has played a key role in helping to more than double wind power over the last four years.

“To ensure that this industry continues to stay competitive, President Obama has called on Congress to extend the successful clean energy tax credits, which are benefitting businesses and manufacturers nationwide.”

Roughly 6,800-MW of clean, renewable wind power capacity was added to the U.S. grid in 2011. That's up 31 percent from 2010, bringing total U.S. wind power capacity to 47,000 MW. 2012 additions to date bring the total up to 50,000 MW, enough clean, renewable electrical power to supply 13 million homes. That's enough annual electricity capacity for all the homes in Alabama, Colorado, Connecticut, Nevada, Virginia and Wisconsin combined, the DoE pointed out.

Cumulative U.S. wind power capacity has grown 16 percent since 2010 and has increased more than 18-fold since 2000, according to the DoE's report. Wind energy now generates more than 10 percent of the electrical power in six U.S. states.

Examining the effects on employment, the U.S. wind energy sector employs 75,000 Americans across its supply chain, according to industry estimates. The total includes workers at manufacturing facilities up and down the supply chain, as well as engineers and construction workers who build and operate wind farms.

Ongoing technological advances and manufacturing innovations continue to result in more efficient wind turbines, blades and power equipment, the DoE notes in its report. Gains are also being made in wind project capital and maintenance costs, which continue to decline. These, along with support from the federal and state governments is “driving US manufacturing competitiveness on the global market,” the report authors state.

Indicative of the sharp and rapid decline in wind power cost, the price of wind power under long-term power purchase agreements (PPAs) with electric utilities was an average 40 percent lower last year than it was in 2010 and some 50 percent lower than in 2009. That's resulted in wind power becoming “competitive with a range of wholesale power prices seen in 2011,” according to the report.

The U.S. wind power market continues to exhibit strong growth so far this year, but the year-end expiration of the federal wind energy production tax credit (PTC) is already having a negative impact on wind farm project installation plans and investment. For 2013, the DoE anticipates a “dramatic slowing of domestic wind energy deployment due in part to the possible expiration of federal renewable energy tax incentives.”

Renewable energy and US energy policy are hot-button issues in the run-up to this year's elections. While Pres. Obama and his administration are intensifying efforts to foster growth in US renewable energy markets and capacity, Republican presidential candidate Mitt Romney has stated that he was in favor of letting the wind energy tax credit expire.

The Senate Finance Committee last week passed a proposed bill, "The Family and Business Tax Cut Certainty Act," that includes a one-year extension of the federal wind energy PTC. Primarily Republican opponents, backed by some major electric utilities and fossil fuel industry interests, are pushing counter-measures that would squash federal incentives and support for ongoing growth and development of wind and other clean, renewable energy resources.