Tuesday, August 06, 2013

DOE Reports On Record Growth In U.S. Wind Market; But?

Aug 6: The Department of Energy (DOE) released two new reports showcasing record growth across the U.S. wind market -- increasing America's share of clean, renewable energy and supporting tens of thousands of jobs nationwide. However, the wind industry indicates that Congressional bickering over the Production Tax Credit (PTC) is hurting the industry and policy stability is necessary going forward for the American wind energy industry to reach its full potential.
    According to the reports, the United States continues to be one of the world's largest and fastest growing wind markets. In 2012, wind energy became the number one source of new U.S. electricity generation capacity for the first time -- representing 43 percent of all new electric additions and accounting for $25 billion in U.S. investment.

    In a release DOE indicated that in the first four years of the Obama Administration, American electricity generation from wind and solar power more than doubled. DOE said, "President Obama's Climate Action Plan makes clear that the growth of clean, renewable wind energy remains a critical part of an all-of-the-above energy strategy that reduces harmful greenhouse gas emissions, diversifies our energy economy and brings innovative technologies on line [See WIMS 6/25/13 & See WIMS 6/26/13]. The Obama Administration has committed to another doubling of the renewable electricity generation from energy resources like wind power by 2020."

    DOE Secretary Ernest Moniz said, "The tremendous growth in the U.S. wind industry over the past few years underscores the importance of consistent policy that ensures America remains a leader in clean energy innovation. As the fastest growing source of power in the United States, wind is paving the way to a cleaner, more sustainable future that protects our air and water and provides affordable, clean renewable energy to more and more Americans." The growth in the overall U.S. wind industry has led directly to more American jobs throughout a number of sectors and at factories and power plants across the country. According to industry estimates, the wind sector employs over 80,000 American workers, including workers at manufacturing facilities up and down the supply chain, as well as engineers and construction workers who build wind installations.

    DOE and Lawrence Berkeley National Laboratory released the 2012 Wind Technologies Market Report -- detailing the latest trends in the U.S. wind power market. Last year, over 13 gigawatts (GW) of new wind power capacity were added to the U.S. grid -- nearly double the wind capacity deployed in 2011. This tremendous growth helped America's total wind power capacity surpass 60 GW at the end of 2012 -- representing enough capacity to power more than 15 million homes each year, or as many homes as in California and Washington state combined. The country's cumulative installed wind energy capacity has increased more than 22-fold since 2000.

    At the same time, the proportion of wind turbine components such as towers, blades, and gears made in America has increased dramatically. The report estimates seventy-two percent of the wind turbine equipment installed in the U.S. last year was made by domestic manufacturers, nearly tripling from 25 percent in 2006-2007. The report also finds that nine states now rely on wind power for more than 12 percent of their total annual electricity consumption -- with wind power in Iowa, South Dakota and Kansas contributing more than 20 percent. Additionally, Texas added over 1,800 megawatts of wind power last year, more than any other state. On a cumulative basis, Texas remains a clear leader with over 12 GW installed at the end of 2012 -- more than twice as much as California, the next-highest state. 

Also according to the report, technical and design innovation allowing for larger wind turbines with longer, lighter blades has steadily improved wind turbine performance and has expanded wind energy production to less windy areas. Since 1998, the average capacity of wind turbines in the U.S. has increased by 170 percent. At the same time, wind project capital and maintenance costs continue to decline, lowering the cost of wind energy to near-record lows. The price of wind under long-term power purchase contracts signed in 2011 and 2012 averaged 4 cents per kilowatt hour -- making wind competitive with a range of wholesale electricity prices seen in 2012.

    For the first time, DOE and Pacific Northwest National Laboratory also issued the 2012 Market Report on Wind Technologies in Distributed Applications -- highlighting strong growth in the U.S. distributed wind energy market. Compared to traditional, centralized power plants, distributed wind energy installations directly supply power to the local grid near homes, farms, businesses and communities -- helping to improve grid reliability and efficiency. Turbines used in these applications can range in size from a few hundred watts to multi-megawatts, and can help power remote, off-grid homes and farms as well as local schools and manufacturing facilities. Over the past ten years, the U.S. distributed wind market has grown more than five-fold.

    The report finds that distributed wind in the U.S. reached a 10-year cumulative installed capacity of more than 812 megawatts (MW) at the end of 2012 -- representing more than 69,000 units across all 50 states. Between 2011 and 2012, U.S. distributed wind capacity grew by 175 MW, with about 80 percent of this growth coming from utility-scale installations. At the state level, Iowa, Massachusetts, California and Wisconsin led the nation in new distributed wind power capacity in 2012. Still, most distributed wind buyers continue to choose small wind turbines, which have a rated capacity of no greater than 100 kilowatts. Last year, domestic sales from U.S. wind suppliers accounted for nearly 90 percent of new small wind generation capacity. Broadly, nine out of the top ten wind turbine models installed last year in U.S. distributed applications were made in America.

    DOE said that the wind sector's growth underscores the importance of continued policy support and clean energy tax credits to ensure that wind manufacturing and jobs remain in America. The 2012 Wind Technologies Market Report expects 2013 to be a slow year for new capacity additions, due in part to continued policy uncertainty and project development timelines. While the report notes that 2014 is expected to be more robust, as developers commission projects that will begin construction in 2013, it also notes that projections for 2015 and beyond are much less certain. On Thursday, August 8, at 3 PM ET, DOE will be discussing key findings from the reports during a special Google+ Hangout on wind energy in America.

    On July 30, the American Wind Energy Association (AWEA) issued the U.S. Wind Industry Second Quarter 2013 Market Report and reported that after coming to a standstill in the first half of 2013 due to Congressional delay in extending the Federal wind energy Production Tax Credit (PTC), activity in the U.S. wind industry is ramping back up as a strong wave of utilities sign up for more wind power. AWEA said that throughout 2012, the industry awaited a policy signal from Congress via a PTC extension, but that extension didn't come until New Year's Day of this year. As the industry had previously warned, with wind energy project timelines spanning 18-24 months, the delay had serious consequences, and its impacts have continued to ripple through the industry well into 2013.

    AWEA reports that only 1.6 megawatts (MW) of wind power were commissioned during the first half of the year and none at all during the second quarter, yet activity is now robust in areas that indicate impending project construction -- namely, requests for proposals (RFPs) and power purchase agreements (PPAs). More than 20 RFPs have been issued, and extremely competitive prices for wind energy are spurring utilities to ink contracts for even more megawatts than their initial RFPs requested. Approximately 1,300 MW are now under construction, while more than 3,600 MW in PPAs are secured. In total, utility plans for more wind announced in the first six-plus months of the year total nearly 5,000 MW.

    AWEA CEO Tom Kiernan said, "The market pattern playing out in U.S. wind energy right now tracks exactly with warnings sounded by the industry a year ago, and with studies that examined the consequences of not extending the PTC. No industry can contribute what it's capable of giving America without  stable policy, and wind energy is Exhibit A of that reality. The industry is hard at work getting geared up to meet the strong demand for more wind energy, but if it's going to generate more jobs and clean energy for America in the future, it simply must have the same kind of policy certainty under which other industries operate." AWEA indicated that construction is underway across eight states, and 2013 PPAs have been signed for projects in 11. The bulk of recent activity is occurring in the interior region of the U.S. -- from North Dakota down through Texas -- but projects in states including California, Michigan and New York are being supported through strong state policies and competitive prices. Kiernan said, "What we are seeing now is a testament to the willingness of utilities to sign long-term contracts for wind energy offered at competitive prices. But the late PTC extension caused serious harm, and we urgently need policy stability going forward for the American wind energy industry to reach its full potential."

    Access a release from DOE on the two reports (click here). Access the 92-page Technologies Market Report (click here). Access the 78-page Distributed Applications report (click here). Access more information on the Google+ Hangout and how to submit questions (click here). Access a release from AWEA (click here). Access the 2Q13 Market Report from AWEA (click here). [#Energy/Wind, #AskEnergy]