U.S. Wind Energy Could Double, But It's Deja-vu All Over Again in Congress

Last year got off to a shaky start for the U.S. wind energy industry, but new project construction and installed generation capacity took off following belated Congressional extension of the federal renewable energy production tax credit (PTC). By year's end a record number of wind energy projects were under construction, and new wind energy generation records had been set across the country.

By the end of 2013, 46,100 wind turbines on 905 utility-scale wind farms with rated generation capacity of 61,110 megawatts (MW) were online, producing more than 4 percent of U.S. electricity generation, according to the American Wind Energy Association's (AWEA), “U.S. Wind Industry Annual Market Report 2013.”

Wind energy investment has been growing at a 19.5 percent annual rate over the past five years, with an average $15 billion per year invested in new projects. With costs dropping 43 percent between 2008 and 2012, wind energy is now providing clean, renewable electricity to the equivalent of 15.5 million U.S. homes across 39 states and Puerto Rico, and the U.S. economy and society is benefiting in numerous other ways.

Momentum is still very much dependent on the federal wind energy PTC, however. As Congress once again debates whether or not to extend the PTC, wind energy industry companies, their employees and suppliers can only watch, wait and make contingency plans.

Wind energy comes of age

U.S. wind energy growth and development has been remarkable over the past five years and more, notwithstanding successive boom-bust cycles – the result of the waxing and waning of the wind energy PTC.

Whether its building or operating wind farms or manufacturing, the wind energy industry is now present in all 50 U.S. states and Puerto Rico. In a surprisingly short period of time, wind energy has become the lowest cost means of producing electricity in a growing number of U.S. markets, accounting for 31 percent of new U.S. electric generation capacity over the past five years. As the AWEA points out:

“The 905 U.S. wind projects span 39 states while the 560 manufacturing facilities span 43 states. The majority of U.S. Congressional Districts, over 70 percent, have a wind project, a manufacturing facility or, both.”

Regionally, wind-generated electricity accounted for 60 percent of supply in the Pacific Northwest, Plains states and Midwest, and as much as 80 percent in the Upper Midwest between 2011 and 2013, the AWEA highlights. Wind energy was the largest source of new generation capacity across the U.S., with the exception of the Southeast and Mid-Atlantic regions.

Touting the industry's success, AWEA President Tom Kiernan stated:

“Increasingly, America is powered by wind energy. As utilities and Americans become more familiar with this affordable and reliable energy source, they want more of it. Our industry is responding with record construction numbers, more business for American factories, and more deployment of wind energy that has become a new cash crop for our farmers and ranchers.”

Then, of course, there are the social and environmental values and benefits associated with producing electricity with zero carbon and greenhouse gas emissions, essentially zero in the way of land, water and air pollution, and drastically lower water use as compared to fossil fuel alternatives. The AWEA highlights:

“Operational wind energy projects, combined with the projects under construction, will avoid 115 million tons of carbon dioxide emissions annually—more than 5 percent of U.S. power sector emissions—while avoiding the consumption of over 36 billion gallons of water each year, because wind turbines use virtually no water in operation.”

Realizing wind energy potential: A look ahead

Looking ahead, the AWEA highlights the boost anticipated as a result of growing investment to expand transmission capacity from wind energy facilities to demand centers.

“More than 10,000 MW of new transmission capacity was completed in 2013, and near-term projects could deliver another 60,000 MW of wind energy – allowing a doubling of the total amount of capacity installed today. These power lines result from years of work, which must continue if growth is to be sustained.”

Driven by ongoing technological advances, declining costs and the Jan. 2, 2013 extension of the wind energy PTC, last year's results were dramatic. Equally dramatic have been the effects of allowing the federal wind energy PTC to expire. That was clearly demonstrated yet again in late 2012, as the AWEA recounts in its news release:

“The supply chain had slowed down during the months preceding the threatened expiration. As a result of the slowdown and the months needed to region momentum, the industry saw a 92 percent drop in installations, down from a record 13,131 MW in 2012 to just 1,087 MW in 2013.”

The bust proved short-lived and was to be followed by a boom following Congress's Jan. 2 renewal. As 2013 drew to a close, a record 12,000 MW and 100 projects were under construction across the U.S.

Unfortunately, for the U.S. wind energy participants and society at large, the debate as to whether or not to renew the PTC for wind energy is playing out yet again this year.

Speaking for the industry, AWEA Kiernan said:

“In the last several years, and highlighted by the tremendous industry activity that ramped up in 2013, U.S. wind energy has shown what it can do for America. The time is now for Congress to give the industry a green light to keep contributing jobs and clean electrons to America, by providing a stable business environment for further investment.”