U.S.-China surge made 2014 a banner year for wind power — report 

Source: Daniel Cusick, E&E reporter • Posted: Monday, January 26, 2015

U.S. wind power developers, racing against the year-end expiration of the federal production tax credit, worked at breakneck speed to install 4.7 gigawatts of wind power capacity in 2014, according to new figures released yesterday by Bloomberg New Energy Finance.

The increased pace of development resulted in a 600 percent increase in U.S. installations over 2013 and solidified the United States’ status as the second-largest global wind energy market behind China, BNEF researchers found.

China also saw record-breaking wind energy development in 2014, with 20.7 GW of newly installed capacity. That’s more than 40 percent of the entire world’s new installations for the year, according to BNEF. China’s total grid-connected wind power capacity at year’s end was 96 GW, making its wind power sector larger than the entire power generation system of the United Kingdom.

In comparison, the United States as of last October had roughly 62.3 GW of installed capacity, according to figures from the American Wind Energy Association (ClimateWire, Oct. 22, 2014). AWEA will make public its fourth-quarter 2014 and annual performance data next week. A spokesman for the organization said officials will comment on the U.S. sector’s 2014 performance then.

The U.S. industry’s largest growth year was 2012, when wind power developers added 13.1 GW of new capacity. But legislative uncertainty about the PTC in the second half of 2012 effectively emptied the development pipeline for the first half of 2013. As a result, the industry added just over 1 GW of capacity for the entire year, its smallest annual growth in a decade, according to AWEA figures.

According to Bloomberg’s analysis, the next three largest markets for wind energy in 2014 after China and the United States were Germany, Brazil and India. Germany and Brazil also set new records for new wind power installations last year, at 3.2 and 2.9 GW, respectively, according to BNEF.

Policy shifts drive growth

Collectively, investment in wind energy for 2014 increased 11 percent over the previous year to a record $99.5 billion, BNEF said in earlier report on clean energy investment (ClimateWire, Jan. 9).

China, however, remained the big story for wind power in 2014, with single-year additions trumping the entire wind energy capacities of many other countries, according to BNEF. Yet even with last year’s surge, wind power remains China’s third-largest source of electricity, behind coal and hydropower, the analysis found.

Yiyi Zhou, China wind analyst for BNEF, said that most of the new turbines built in 2014 came from China’s leading domestic suppliers — Goldwind, Guodian United Power, Envision, Ming Yang and Sewind. Foreign manufacturers, by contrast, accounted for less than 2 percent of China’s new installations.

As in the United States, China’s surge in wind power development was driven by firms “rushing to complete projects ahead of the looming feed-in-tariff cut,” Zhou said. Policy shifts also drove Germany’s pace of development, according to BNEF, as developers took advantage of a grace period in the outgoing support system that is being replaced by a stricter system of supports.

In the United States, much of the industry’s focus has been on securing a long-term reauthorization of the PTC, which provides a 2.3-cent-per-kilowatt-hours tax break to wind energy developers. That PTC has been instrumental in driving growth in U.S. wind power, but it has also been targeted by congressional Republicans as an expendable subsidy.

U.S. still beats China in turbine efficiency

The U.S. industry has also recently pressed the idea that while China may have more wind turbines operating, wind farms in the United States are more efficient than those in many other countries, including China, Germany and Spain.

An analysis by AWEA, for example, shows that U.S. turbines are nearly twice as productive as those in China. An average-sized 2-megawatt turbine in the United States, for example, generates roughly 5,700 megawatt-hours of electricity in a year, compared to 3,300 MWh for a similar-sized Chinese turbine.

“Utility-scale wind was invented in America, and we do it best,” AWEA said in a recent blog post comparing U.S. wind energy production to that of other countries.

AWEA officials attribute the higher ratings to more advanced rotor and blade technologies being used in the United States, more precise siting of turbines to maximize energy output and lower downtime due to maintenance issues.

As a result, between January and October last year, the United States generated 148,047 gigawatt-hours of wind energy compared to China’s 122,300 GWh, according to AWEA’s analysis of data from the U.S. Energy Information Administration and the China Electricity Council.

Elsewhere around the world, BNEF found that Brazil saw grid-connected wind power installations for 2014 balloon to five times its previous record of 500 MW (0.5 GW), set in 2011. Increased transmission access helped the Brazilian market, according to BNEF, with nearly 1 GW of capacity that had been built in previous years reaching the grid for the first time.

David Hostert, BNEF’s European wind analyst, said that such policy shifts can be unique drivers in energy markets, and he cautioned that last year’s global development figures may not be reflective of future development.

Hostert noted, however, that one phenomenon worth watching is the “repowering” of existing wind farms with new equipment. Such projects accounted for more than 1 GW of all wind energy development last year. “This means making better use of existing wind sites and opening up new opportunities for developers and asset owners in a mature market,” he said.