Wind hits record high, but troubles loom

Source: By Haley Weiss, E&E News reporter • Posted: Tuesday, August 6, 2019

Wind farm development in the United States reached a record high last quarter despite challenges facing the industry from tax and tariff policy.

New projects launched in the second quarter of 2019 will add a total of 7,290 megawatts of wind power to the U.S. grid once completed, the American Wind Energy Association said in a report last week. Between government and commercial projects, AWEA’s findings showed a 10% increase in current construction from the same period in 2018.

“Our industry’s success strengthens the U.S. economy because access to affordable, clean American wind power is a competitive advantage in the eyes of business leaders,” AWEA CEO Tom Kiernan said in a statement. “And when those businesses invest in U.S. wind energy, it directly benefits the people living and working in our country’s farm, factory, and port communities.”

Strong demand for wind from utilities and businesses, as well as state governments’ support for offshore projects, contributed to the record quarter, AWEA said.

In recent months, multiple states have enacted legislation committing to build more wind generation. Maryland and Connecticut pledged to construct 1,200 MW and 2,000 MW, respectively, in offshore wind capacity, while New York will aim to provide an additional 9,000 MW of wind power to its residents by 2035.

In New Jersey, construction is scheduled to begin soon on the largest offshore wind farm in the United States, the 1,100-MW “Ocean Wind” project backed by Danish renewable energy company Ørsted A/S. Developers hoping to take advantage of expiring wind production tax credits must finish their projects by next year.

The AWEA report follows a petition last month by the Wind Tower Trade Coalition asking the Trump administration to levy new tariffs on imported wind tower components (Energywire, July 17). The industry has warned that high tariffs could lead to job losses tied to rural wind manufacturing.

The wind industry has grown steadily each quarter now for over a year, as more companies continue to commission their own projects, according to the new data. This quarter, Hormel Foods Corp., Smithfield Foods Inc., Crown Holdings Inc. and Ernst & Young were among those announcing wind energy projects for the first time.

Analysts caution that looming economic shifts could pose challenges for the industry. Wood Mackenzie wind energy research lead Dan Shreve said in an analysis last week that if the proposed 10% tariffs go into effect, many planned wind farms could be canceled.

“A tumultuous 2020 awaits the U.S. wind energy market as record installations of more than 13 GW push the wind industry’s value chain to the limit,” Shreve said. “Price pressure exists throughout the value chain already, but turbine OEMs are expected to bear the financial burden of the latest salvo in the ongoing trade war.”

About 84% of wind components imported to the United States currently come from Canada, Indonesia, South Korea and Vietnam — the countries targeted in the petition.

Reporter Christa Marshall contributed.