‘Wind is winning,’ but leaders remain watchful

Source: Daniel Cusick, E&E reporter • Posted: Thursday, May 26, 2016

NEW ORLEANS — Riding high on last year’s congressional extension of the production tax credit, the U.S. wind energy sector must now focus on reducing costs to remain competitive with other fuels like natural gas and solar, industry leaders told a national meeting of wind power officials gathered here this week.

In an address marking its achievements but also cautioning against complacency, Chris Brown, the president of Vestas Americas and incoming board chairman of the American Wind Energy Association, challenged his colleagues to “bend the arc of human history” by making wind energy the “obvious choice” to meet rising U.S. electricity demand after 2020.

“The right side of history looks like a world where energy is cleaner, cheaper and more abundant,” Brown told the plenary session of the AWEA national conference yesterday. “So I ask, will [you] contribute to bending the arc of human progress?”

Brown’s remarks, along with those of other senior officials, helped set an ambitious agenda for the wind energy sector through 2020. Wind is expected to account for between 8,000 and 10,000 megawatts of new generation capacity annually in the United States over the next four years.

“We’ve built an American success story that creates jobs, cuts carbon pollution and cuts costs for American consumers,” Tom Kiernan, AWEA’s chief executive officer, told the gathering. “We are leading the transformation of the U.S. and global economies toward low-carbon, renewable fuel economies.”

That kind of robust development pipeline should also help move the industry beyond the boom-and-bust cycles that defined its existence for years, replacing chronic policy and financial uncertainty with a foundation for long-term stability.

While the PTC’s 2.3-cents-per-kilowatt-hour credit for eligible wind farms for the first 10 years of operation has been critical to keeping the industry afloat, industry leaders stressed that utilities and corporate purchasers of energy are choosing wind today because it’s the most economic resource available in many parts of the country.

“Wind is winning,” Brown said. “The challenge is to make renewable technology so cheap that it’s the obvious choice. That’s why we’ve driven down costs by technology advancement including longer rotors, taller towers, advanced controls and product reliability.”

First offshore wind facility

At the same time, investor interest in wind power has continued to rise, as evidenced by the millions of dollars in equity financing being put behind wind energy projects and the falling costs of capital, Brown said.

While stressing the importance of policies that encourage the adoption of renewables, such as U.S. EPA’s Clean Power Plan, Brown said he remains bullish on wind energy’s ability to compete on pure economic grounds, so long as the industry does not lose sight of its need to adapt and change with the marketplace.

“The path to sustaining [that growth] requires all of us to become energy analysts who understand the levers of driving costs down,” he said.

Falling costs have also allowed states like California to revise renewable energy targets with the confidence that integrating more wind and solar does not compromise grid reliability and can be cost-effective for both utilities and ratepayers. California’s current renewable energy standard calls for meeting one-third of all power demand using renewable resources by 2020. It jumps to 50 percent by 2030.

Steve Berberich, president and CEO of the California Independent System Operator, told AWEA members that last weekend the state met 50 percent of its load demand using renewable resources, including between 5,000 and 6,000 MW of wind power that was dispatched onto the CASIO grid.

“I expect us to go higher and higher and higher,” Berberich added.

The coming year should also see the completion of the first U.S. offshore wind farm at Block Island, R.I., as well as the leasing of additional offshore wind power development sites on both the Atlantic and Pacific coasts, according to officials with the Bureau of Ocean Energy Management, a subagency of the Interior Department.

Transmission projects, including five major corridors being developed by Clean Line Energy Partners LLC of Houston, should be completed by 2020. That would allow the transfer of thousands of megawatts of power from wind-rich production areas in the Midwest and Great Plains to load centers in the East and Southeast, officials said.