Wind industry issues bright forecast despite weak growth in early 2015
But AWEA downplayed the anemic Q1 numbers, which reflect the sector’s fourth smallest quarterly growth since 2008 (its three smallest quarters all occurred in 2013). Instead, AWEA said the sector has emerged from its recent downslide and is poised for huge capacity additions as more than 100 projects currently under construction come online later this year and into 2016 and 2017.
“We’re just getting this bounce back started,” Tom Kiernan, AWEA’s CEO, said in a statement. “Over $23 billion worth of new wind farms is in development now, and more will follow as we work to double American wind power by 2020.”
Developers reported 1,200 MW of construction activity in the first quarter of 2015, and more than 13,600 MW of total wind capacity under construction across 23 states, marking the second highest construction levels in the U.S. wind sector’s history.
More than half of that development, nearly 8,000 MW of new capacity, is occurring in Texas, followed by Oklahoma (890 MW), Kansas (870 MW) and New Mexico (680 MW). Illinois, Iowa and North Dakota each claim more than 500 MW of wind farms under construction, according to AWEA.
A looming renewable cliff?
For wind farms already in service or nearing completion, interest in purchasing their output has also remained strong. Industry officials reported that utilities and other firms signed power purchase agreements (PPAs) in the first quarter for 750 MW of wind power, pushing total contracted wind power to upward of 12,000 MW.
Among the largest PPAs announced in early 2015 were for Dow Chemical (200 MW), Wal-Mart (50 MW), Kaiser Permanente (43 MW) and Google Energy (43 MW), according to AWEA.
The group will try to capitalize on that momentum going into its national conference in Orlando from May 18 to 21. But many industry observers see dark clouds ahead for the wind energy sector unless Congress renews the recently expired production tax credit (PTC), which provides a 2.3-cent-per-kilowatt-hour tax credit for wind projects that entered the development pipeline by the end of 2014.
“No one wants to throw a promising American industry off a cliff, but that’s what could happen to future development unless the PTC is extended,” Kiernan said.
But critics of the PTC, including many congressional Republicans, argue that renewable energy tax credits artificially prop up industry sectors that should succeed or fail on their own terms. Conservatives have been especially critical of the PTC for wind energy and the investment tax credit (ITC) for solar energy, both of which have helped spur a U.S. renewable energy boom.
The last time the PTC for wind energy was allowed to expire, at the end of 2012, the sector entered an 18-month tailspin that saw investment dry up and new capacity additions come to a near standstill for much of 2013.
The industry made a solid recovery last year, however, thanks to an extension of the PTC and other factors, including the continued implementation of state renewable energy standards and falling prices for wind energy developers. In 2014, the industry added roughly 5,000 MW of new capacity (ClimateWire, April 16).