Wind makes record strides, but trouble lies ahead

Source: Christa Marshall, E&E News reporter • Posted: Friday, August 24, 2018

Wind energy surged to provide 6.3 percent of electricity last year, but tax shifts and low natural gas prices could put a “damper” on future growth, according to three reports released today by the Department of Energy.

The sweeping reports from three national labs assess the status through 2017 of U.S. utility-scale wind, offshore wind and distributed wind.

Helped by the production tax credit and declining costs, wind added more than 7,000 megawatts of new capacity last year, with 41 states operating utility-scale projects. Only solar and natural gas added more power.

There were record levels of wind seeking connections to transmission lines. In four states, Iowa, Kansas, Oklahoma and South Dakota, wind supplied more than 30 percent of power.

Other successes for wind included commercial-scale projects being competitively selected in Massachusetts, Rhode Island and Connecticut.

The offshore wind project pipeline reached more than 25,000 MW of capacity across 13 states, including the Block Island Wind Farm, commissioned two years ago. Many offshore projects pushed during the Obama administration have moved forward (Energywire, July 12).

Distributed wind, which power homes and businesses directly, jumped to more than 1 gigawatt of capacity. In general, wind growth outpaced state targets.

“Recent and nearterm additions are supported by the industry’s primary federal incentive — the production tax credit (PTC) — as well as a myriad of state-level policies. Wind capacity additions have also been driven by improvements in the cost and performance of wind power technologies, yielding low-priced wind energy for utility, corporate, and other power purchasers,” the report states.

Other findings:

  • Texas leads the nation with more than 22 GW of wind capacity. Oklahoma, Iowa, California and Kansas have more than 5,000 MW.
  • The average installed cost of wind projects in 2017 was $1,611 per kilowatt, 33 percent lower than the peak in 2009-10.
  • The U.S. wind industry supported more than 105,000 jobs and invested more than $11 billion in new projects.
  • Large turbines with longer blades are enhancing wind performance. Projects built in recent years have seen capacity factors increase by about 79 percent compared to projects installed two decades ago.

Despite the recent growth, there is looming uncertainty because of the phaseout of the PTC, according to DOE. In December 2015, Congress passed a five-year extension of the tax credit, with annual phase-downs.

Various forecasts show wind additions of 8,000 to 11,000 MW a year through 2020, with “market contraction” anticipated starting in 2021 as the tax credit winds down, according to DOE.

Some forecasts after 2021 show a downturn, with changing tax policy, low natural gas prices, modest electricity demand growth and less of a push from state renewable portfolio standards, DOE said.

Limited transmission infrastructure, low natural gas prices and modest electricity demand growth also could slow development.

“At the same time, the potential for continued technological advancements and cost reductions enhance the prospects for longer-term growth, as does burgeoning corporate demand for wind energy and continued state RPS requirements,” the report said.

“Given these diverse and contrasting underlying potential trends, wind additions — especially after 2020 — remain uncertain.”

The report comes a week after President Trump slammed wind power at length at a fundraiser in New York, saying “windmills” create a “killing field of birds” (E&E News PM, Aug. 20). He also questioned why you need an energy source that needs “subsidy.”

White House budget requests have proposed slashing funding for the wind office in DOE’s Office of Energy Efficiency and Renewable Energy.

Energy Secretary Rick Perry, who was governor of Texas during a wind power boom, has made numerous statements supporting the industry. This month, he posted a photo of spinning turbines on his Twitter account and wrote, “Wind energy is an important part of America’s all-of-the-above energy future.”

Click here for the 2017 Wind Technologies Market Report from the Lawrence Berkeley National Laboratory.

Click here for the 2017 Offshore Wind Technologies Market Report from the National Renewable Energy Laboratory.

Click here for the 2017 Distributed Wind Market Report from the Pacific Northwest National Laboratory.