Wind power industry catches another breeze

Source: Daniel Cusick, E&E reporter • Posted: Monday, October 26, 2015

The U.S. wind power industry added 1,602 megawatts of new generation during the third quarter of 2015, nearly four times the amount of capacity added in the same quarter of 2014 and the second-highest third quarter since 2012.

For the first nine months of 2015, U.S. wind energy capacity expanded by 3,596 MW, placing the industry on track to have its strongest growth year since 2012, according to newly published figures from the American Wind Energy Association.

Nationally, the United States now claims 69,471 MW of wind energy capacity, nearly double the amount of installed wind power in 2009. Over the same period, the costs of wind power have declined by 66 percent, based on Department of Energy figures, further driving the industry’s robust growth.

“We are on the cusp of greatness,” Tom Kiernan, AWEA’s chief executive officer, said in a statement announcing the third-quarter results. “There are over $20 billion worth of wind farms under construction right now, creating well-paying jobs and spurring economic development in rural communities across the country.”

Texas remains the nation’s wind energy leader in both quarterly and annual growth, with 771 MW of capacity coming online between July and September, pushing the state to more than 16,000 MW of total capacity. An additional 6,300 MW of capacity is in the development pipeline in Texas, more than in any other state, according to AWEA.

Other states that saw capacity increases during the third quarter were Oklahoma (398 MW), Kansas (201 MW) and Illinois (175 MW).

On a webinar with reporters and industry followers yesterday, Rob Gramlich, AWEA’s senior vice president for government and public affairs, noted that the industry has continued to gain strength since its near-collapse in 2013, after its primary federal subsidy, the production tax credit (PTC), expired at the end of 2012.

Congress renewed the PTC, which provides a 2.3-cent-per-kilowatt-hour credit to wind farm owners for 10 years, in early 2013, then retroactively extended the program again through December 2014. But it remains a target for conservative lawmakers who oppose government subsidies for clean energy.

Experts have noted that much of the wind industry’s growth in 2015 is spurred by continued falling costs for new wind farms, technology improvements and efficiency gains across the industry, and a surge in utility and private-sector demand for energy sources that emit little or no greenhouse gases or other pollutants.

Breaking into the Southeast

Such conditions have helped the industry expand into new states like North Carolina, where Iberdrola Renewables LLC is building a 200-MW wind farm near Elizabeth City, with most of the farm’s output going to Inc. to power its cloud-based computing services. The $400 million project, announced in July, represents the wind power industry’s first major expansion in the Southeast, a region that has been slow to embrace non-hydro renewable energy.

Kevin Helmich, Iberdrola’s director of projects in the Midwest and Eastern regions, said the company is proud to have signed a major wind contract in a previously uncharted state, adding that the project, called the Amazon Wind Farm U.S. East, proves “that the Southeast is a viable place to invest in wind power generation in the U.S.”

AWEA officials noted that North Carolina adds to the list of states where advanced wind turbine technology is creating a “wind rush” by accessing faster, steadier winds at higher altitudes, meaning they can generate more electricity affordably.

Other notable non-utility power purchase agreements announced recently include a deal between Iberdrola and the District of Columbia to import 46 MW of wind energy from Pennsylvania, and Hewlett-Packard Co.’s commitment to purchase 112 MW of wind energy from a SunEdison-built project in Texas.

Early this week, consumer goods giant Procter & Gamble Co. announced it would buy 80 percent of the output from a 123-MW wind farm being developed by EDF Renewable Energy in Cooke County, Texas. The 12-year power purchase agreement will allow P&G to power all of its North American home care and fabric products facilities with renewable energy.

Yet, in spite of its recent successes, AWEA officials cautioned that the industry still faces considerable obstacles, including policy uncertainty about the future of the PTC. Despite intense lobbying in Washington, D.C., the industry has not been able to muster sufficient support in Congress to renew the PTC.

Wind power development also remains constrained by insufficient transmission capacity to carry wind energy from remote sections of the country with very high wind factors to load centers on the Atlantic and Pacific coasts and in the Midwest and Southeast.

Where significant transmission investments have been made, such as in Texas, wind energy has achieved production records, including as recently as this week, where wind energy set a grid-delivered power record on the Electric Reliability Council of Texas grid of 12,181 MW, according to AWEA.