GE, Vestas maintain dominance of US wind market 

Source: By Daniel Testa, SNL • Posted: Tuesday, August 23, 2016

General Electric Co and Vestas Wind Systems A/S maintained their dominance of the U.S. wind power market in 2015 by capturing 73%, according to a new report by the U.S. Department of Energy.

Siemens AG was also among the top three turbine suppliers in the U.S., with 14% of the market, compared to 40% for GE and 33% for Vestas. These and other trends were identified in the DOE’s “2015 Wind Technologies Market Report,” released Aug. 17, which illustrated growth for the wind industry on several fronts.

Wind power purchase agreement prices dropped to about $20/MWh in 2015, according to the DOE, down from roughly $70/MWh in 2009, based on the national average level-through price in the report’s sample. Those prices include the federal production tax credit, which Congress voted to extend at the end of 2015. The DOE also acknowledged that those prices were based on a sample of projects located mostly in the lowest-priced Interior region of the country. Drivers behind the low PPA prices included higher capacity factors, declining costs and record-low interest rates.

But the drop in wholesale power markets across the U.S. in 2015 hampered the relative economic competitiveness of wind, particularly in the Interior region. DOE noted, however, the prices of wind PPAs from 2014 through 2016 compare “very favorably” to projections by the U.S. Energy Information Administration on the fuel costs of gas-fired generation through 2040.

Prices for wind turbines also declined, with pricing in recent 2015 transactions ranging from $850/kW to $1,250/kW, according to the DOE, compared to average turbine prices of more than $1,500/kW by the end of 2008. These lower turbine prices, in turn, have driven down the capacity-weighted average installed project cost for wind to approximately $1,690/kW, down $640/kW from the peak in 2009 and 2010.

The DOE reported 8,598 MW of new wind capacity was added in the U.S. during 2015, an increase of 12% bringing total capacity to 73,992 MW. Wind constituted 41% of all U.S. generation capacity additions in 2015, representing the largest source of electric capacity additions, and up sharply from its 24% market share in 2014. Over the last decade, according to the DOE, wind power accounted for 31% of all U.S. capacity additions, and a larger fraction in the Interior and Great Lakes regions.

Texas topped states for installed capacity in 2015 with 3,615 MW for a cumulative total of 17,711 MW. Installed wind power capacity in Iowa supplied more than 31% of all in-state electricity generation for the year, and in South Dakota wind supplied more than 25%. Twelve states in the U.S. have achieved wind penetration levels of 10% or more.

With the help of the PTC extension, improving wind power technology and growing corporate demand, domestic wind capacity additions are expected to average more than 8,000 MW annually through 2020. From 2021 to 2023, however, projections suggest a downturn as the PTC phases down.

Other factors that could impede wind growth include low natural gas prices, slow load growth, lower near-term demand from state renewable portfolio standards and inadequate transmission infrastructure. These negative factors could be offset by the U.S. EPA’s Clean Power Plan clearing court challenges and taking effect, as well as new transmission development in regions that could open up new wind resources to development.