U.S. wind industry touts major 2015 gains, says more to come
The industry saw 5,001 megawatts of new capacity come online during the fourth quarter. For the full year, new wind power capacity jumped 77 percent from 2014. At just under 8,600 MW, it drove the nation’s total installed capacity to 74,472 MW (or 74.4 gigawatts).
The 2015 figures reflect two consecutive years of sustained growth for the renewable energy sector after recovering from a near meltdown in early 2013. That’s when Congress allowed the industry’s primary tax benefit, the production tax credit (PTC), to sunset at the close of 2012.
Industry officials said they see a much brighter future in 2016 and beyond thanks to the most recent extension of the 2.3-cent-per-kilowatt-hour tax credit, as well as the mounting pressure on utilities to shift power generation away from fossil fuels due to tightening regulations on carbon dioxide and other pollutants.
“The data released today show 2016 presents an extraordinary opportunity for American wind power,” AWEA’s chief executive, Tom Kiernan, said yesterday.
Referencing federal climate change regulations, Kiernan added, “The time has never been better for states and utilities to lock in low-cost, stably priced wind energy to achieve their Clean Power Plan carbon reductions.”
Iowa tops Calif.; Texas still tops
True to form, Texas led the nation in wind energy generation, with 17.7 GW of installed capacity at year’s end, more than twice as much as any other state. Iowa edged ahead of California as the nation’s No. 2 wind energy producer, with 6.2 GW.
Dan Woodfin, director of system operations for the Electric Reliability Council of Texas (ERCOT), said a glut of new wind turbines in the state led to several new wind generation records in 2015. That includes Dec. 20, 2015, when 13,883 MW of wind power was flowing across the ERCOT territory, accounting for 41 percent of the grid’s real-time load.
“These records are the result of several factors, including growth in installed capacity, a significant investment in the transmission system in Texas, and improved forecasts and market tools that help us integrate these resources reliably,” Woodfin said.
Oklahoma also passed a key milestone in 2015, marking 5 GW of installed wind power capacity and solidifying its place as a top five producer nationally. Officials said Oklahoma’s boom has been spurred by attractive state policies for energy development and strong demand for wind power from electric utilities, as well as corporate and industrial energy consumers.
A recent study from the Oklahoma Chamber of Commerce found that new and existing wind farms in the state have generated $1 billion in tax revenue for local governments and school districts, as well as millions in royalty and lease payments to private landowners (ClimateWire, Nov. 6, 2015).
The latest data show that 40 states are now producing utility-scale wind energy, and 17 generate at least 1 GW of wind power, according to AWEA. But as the industry’s footprint continues grow across much of the country, development continues to lag in the Southeast, a region experiencing both population growth and rising energy demand.
With the exception of a handful of turbines owned by the Tennessee Valley Authority, as well as North Carolina, which is building its first commercial wind farm, the industry has had zero penetration in nine Southern states from Arkansas and Louisiana to Virginia and Kentucky and southward to Georgia and Florida.
Non-utility buyers rising
Hannah Hunt, an AWEA research analyst, said the Southeast, while lagging behind the rest of the country in terms of wind energy development, has become more active in importing wind power from outside the region.
For example, she noted that Southern Co.’s northwest Florida subsidiary, Gulf Power Co., recently finalized an agreement to purchase wind energy from Oklahoma, following the lead of other Southern Co. utilities in Georgia and Alabama. The 20-year power purchase agreement (PPA) is expected to save Gulf Power customers between $11 million and $48 million over the life of the contract, according to the Florida Public Service Commission.
Florida has also emerged as a key state in the wind energy supply chain and ownership sectors, hosting executive offices and manufacturing facilities for firms such as Siemens AG, General Electric Co. and NextEra Energy Resources, one of the nation’s largest renewable energy holding companies, or “yieldcos.”
Private companies, institutions and municipalities have also continued to expand their wind power portfolios, often to meet environmental and sustainability goals, but also to secure long-term electricity supply for power-hungry factories and data centers.
In fact, non-utility buyers accounted for approximately 75 percent of the total megawatts of wind power contracted in 2015, including major deals with Google Energy LLC, Amazon Web Services Inc., General Motors Co., Procter & Gamble Co. and Salesforce.
The PPAs between wind energy developers in Texas and West Virginia and San Francisco-based Salesforce are also unique in that they are “virtual power purchase agreements,” meaning there is no direct transmission connection between the producers and buyers of the power. Rather, the wind energy will be bought at a fixed price by Salesforce, then sold onto regional grids where Salesforce has its data centers.
Other companies, including Yahoo Inc., have also signed virtual PPAs as a way of expanding clean energy markets in places where direct purchases of electricity by non-utilities may be limited or prohibited, according to the Rocky Mountain Institute, which operates a Web-based platform to aid businesses with renewable energy procurement.