America’s wind energy industry passed a major milestone
Economic challenges facing wind energy are nothing new, industry says.
Mark Hand August 9, 2017
The Dry Lake Wind Power Project in Arizona. CREDIT: Department of Energy
The wind energy industry reached an important milestone in 2016 when it passed the generating capacity of hydroelectric power for the first time to become the nation’s top renewable generating source. Wind energy’s growth — at least in the next few years — is showing few signs of slowing down, with 142,000 megawatts of new and proposed wind capacity lined up to connect to the nation’s electric power grid, according to new data released by the Department of Energy.
The total amount of wind capacity in the queue represents 34 percent of all generating capacity waiting to connect to the grid, higher than all other generating sources, DOE said. The wind energy industry added more than 8,200 megawatts of capacity in 2016, representing 27 percent of all energy capacity additions for that year.
That annual growth lifted the nation’s wind capacity to 81,312 megawatts at the end of December 2016, slightly above hydroelectric’s 79,985 megawatts of capacity, according to DOE. Wind supplied about 6 percent of U.S. electricity, and 14 states now get more than 10 percent of their electricity from wind.
DOE released three wind market reports on Tuesday, covering wind technology, offshore wind, and distributed wind. The primary authors of the wind technology report were employees at DOE’s Lawrence Berkeley National Laboratory. The offshore wind report was prepared by employees at DOE’s National Renewable Energy Laboratory. Employees at DOE’s Pacific Northwest National Laboratory prepared the distributed wind report.
“The wind industry continues to install significant amounts of new capacity, and supplied about 6 percent of total U.S. electricity in 2016,” Daniel Simmons, DOE acting assistant secretary for energy efficiency and renewable energy, said in a statement. “As our reports explain, a combination of federal subsidies, state mandates, and technological advancements continue to help drive new wind capacity additions.”
Prior to joining DOE, Simmons worked at the Koch-funded Institute for Energy Research as vice president for policy and also held a top position at the Koch-funded American Energy Alliance, which advocated for the office he now oversees at DOE — the Office of Energy Efficiency and Renewable Energy — to be eliminated.
Wind turbine prices remained well below levels seen a decade ago, DOE said. After hitting a low of roughly $800 per kilowatt from 2000 to 2002, average turbine prices increased to roughly $1,600 per kilowatt by the end of 2008. Over the past decade, though, wind turbine prices have dropped substantially.
Technological innovations are helping wind turbines optimize their performance by reaching stronger, steadier winds, according to the American Wind Energy Association, the primary trade association for the wind power industry. Longer blades have helped to boost new wind turbine performance, with wind projects built in 2014 and 2015 reporting a 42.5 percent average capacity factor in 2016, compared to a 32.1 percent capacity factor for projects built between 2004 and 2011, AWEA said in press release Wednesday.
In the offshore report, DOE noted that more than 20 offshore wind projects totaling 24,135 megawatts of potential installed capacity are in the works. The report highlighted that last December, Deepwater Wind completed the commissioning of the Block Island Wind Farm, marking a milestone as the first commercial offshore wind project in the United States.
From 2003 through 2016, a total of 992 megawatts in capacity from more than 77,000 wind turbines was deployed in distributed applications across all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and Guam, DOE said.
DOE said its recent and projected near-term growth in wind energy is supported by the federal production tax credit and state-level policies. Wind additions have also been driven by improvements in the cost and performance of wind power technologies, producing low power prices for consumers.
The prospects for wind energy growth beyond the current PTC cycle remain uncertain, given declining federal tax support, expectations for low natural gas prices, and modest electricity demand growth, DOE said. At the end of 2015, Congress agreed to extend the production tax credit. Since then, wind developers have been building projects before the tax credit expires completely in 2020.
The DOE report lists many positive factors, including the potential for continued technological advancements and cost reductions to enhance the prospects for longer-term growth, Hannah Hunt, a research analyst at AWEA, said in a blog post on Tuesday.
“Some have focused on the report’s discussion of potential economic challenges for the industry, including competition from natural gas and solar,” Hunt wrote. “However, it should be noted that those challenges are nothing new and have in fact been listed in every version of the report this decade. Thanks to the innovation and productivity of American workers, the wind industry has been able overcome those challenges by greatly exceeding cost reduction expectations, and we expect that successful track record to continue.”