Windpower Engineering & Development

  • Home
  • Articles
    • Most recent posts
    • News
    • Featured
  • Resources
    • Digital issues
    • Podcasts
    • Suppliers
    • Webinars
    • Events
  • Videos
  • 2025 Leadership
    • 2024 Winners
    • 2023 Winners
    • 2022 Winners
  • Magazine
  • Advertise
  • Subscribe

2014 year-end energy briefing: The future of the wind industry

By Paul Dvorak | January 30, 2015

This blog posting is the first of a series of five postings from the 2014 year-end energy briefing by law firm Akin Gump Strauss Hauer & Feld LLP. It presents a summary of an energy briefing hosted by the firm, held on December 10, 2014, and featuring energy industry updates along five topics from 12 members of the firm’s Global Energy and Transaction team. Moderating the briefing was Rick L. Burdick, Partner and Chair of the firm’s Global Energy and Transactions group and also Managing Partner for the firm’s international offices.

Burdick: Our first presenter is Ed Zaelke, a partner and chair of the Global Project Finance practice, who will lead a discussion about the future of wind energy.

Edward Zalke

Edward Zalke

Zaelke: The statistics for U.S. cumulative wind power capacity growth reflect an increase from 4,147 megawatts in 2001 to a current level of 62,300 megawatts of installed capacity. The current installed capacity of wind is about 6 percent of the country’s power mix. With the exception of the Southeast, online wind capacity is distributed across the country. Sixteen states now have more than 1,000 MW of installed wind, with Texas currently in the lead at nearly 13,000 MWs. We will see a 20 percent increase over the current capacity in the next 12 months. In order to qualify for production tax credits, current legislation requires that wind construction projects had to be started in 2013 and completed by the end of 2015, so there is a big bubble of wind projects scheduled for completion in 2015.

Why the growth in wind? There has been a constant decrease in the levelized cost of energy (LCOE) from wind, with a 58% decrease in the past five years. This was not anticipated. The prevailing wisdom, as of 2007 to 2008, was that all new technology already had been put into wind. However, with the Obama administration in place, wind R&D seemed a safe investment, resulting in cost-saving design and technology improvements. Further, with a shift into U.S. manufacturing, meaning “away from Europe,” manufacturing and transportation costs are much less. Finally, as wind becomes more mainstream, the cost of capital has decreased.

Layering decreasing costs over a $23 per megawatt-hour production tax credit (PTC) means that wind is running at about $20 per megawatt-hour going forward, based upon contracts that were signed in 2013. But if you take away the PTC credit and then layer on that effect for 10 years, prices will increase by $25 or $30 – close to the cost of producing electricity from natural gas. In the battle to determine the nation’s energy mix, and we assume a certain reduction of energy produced by coal and nuclear plants, the wind folks fear that gas will be the winner if the PTC goes away. Thus, the wind industry is pushing for an extension of the PTC, which will keep the industry running while it is continuing to make further efforts to lower the LCOE.

Akin Gump LLC
www.akingump.com


Filed Under: News
Tagged With: akingump
 

About The Author

Paul Dvorak

Related Articles Read More >

Richardson Electronics to deliver pitch energy modules to TransAlta wind fleets
Equinor halts work on Empire Wind offshore project after federal government order
ARESCA wants input on offshore wind standards
US wind market has worst install year since 2013

Podcasts

Wind Spotlight: Looking back at a year of Thrive with ZF Wind Power
See More >

Windpower Engineering & Development Digital Edition

Digital Edition

Browse the most current issue of Windpower Engineering & Development and back issues in an easy to use high quality format. Clip, share and download with the leading wind power engineering magazine today.

Windpower Engineering & Development
  • Wind Articles
  • Solar Power World
  • Subscribe to Windpower Engineering
  • About Us/Contact Us

Copyright © 2025 WTWH Media LLC. All Rights Reserved. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media
Privacy Policy | Advertising

Search Windpower Engineering & Development

  • Home
  • Articles
    • Most recent posts
    • News
    • Featured
  • Resources
    • Digital issues
    • Podcasts
    • Suppliers
    • Webinars
    • Events
  • Videos
  • 2025 Leadership
    • 2024 Winners
    • 2023 Winners
    • 2022 Winners
  • Magazine
  • Advertise
  • Subscribe