The American wind industry installed 5,001 MW during the fourth quarter of 2015, more installations than in all of 2014, according to data released by the American Wind Energy Association (AWEA). Overall in 2015 the American wind industry installed 8,598 MW, the third largest amount ever installed in a year and a 77% increase over 2014.
AWEA highlighted the industry’s sustained growth in releasing its U.S. Wind Industry Fourth Quarter 2015 Market Report. The strong market activity is expected to continue, with a bipartisan vote by Congress late last year for a multi-year extension of the Production Tax Credit (PTC), supplying the industry with much-needed policy certainty. As 2016 began, an additional 9,400 MW were under construction.
“The data released shows 2016 presents an extraordinary opportunity for American wind power,” said Tom Kiernan, CEO of AWEA. “The time has never been better for states and utilities to lock in low-cost, stably-priced wind energy to achieve their Clean Power Plan carbon reductions. Wind energy is on track to supplying 20% of the country’s electricity by 2030.”
Wind installations during the fourth quarter of 2015 represent the second strongest quarter ever recorded, and significantly more than the 4,854 MW installed in all of 2014. The total installations across 2015 trail only 2009 and 2012. Altogether there is now 74,472 MW of installed wind capacity in the U.S. and more than 52,000 operating wind turbines.
“The U.S. wind industry hasn’t seen this kind of rapid growth for years,” said John Hensley, Manager, Industry Data & Analysis, for AWEA. “After surpassing the 70 GW milestone late last year, American wind power is on the verge of reaching 75 GW of installed capacity in coming months.”
Despite policy uncertainty, American ingenuity and over 500 wind-related manufacturing facilities across 43 states have helped reduce wind power’s costs by 66% in just six years. The extension of the PTC and the alternative Investment Tax Credit through 2019, as part of the budget deal Congress passed in December, keeps American wind power on the path to further advance wind turbine technology and lower its costs.
“Low-cost, stably-priced wind energy is a ‘no-regrets’ solution for states and utilities looking for the best way to meet the Clean Power Plan,” said Kiernan. “Texas ranchers and Iowa farmers know wind power costs one-third as much as it did six years ago. Analysis by the Energy Information Administration confirms that wind energy will make up the majority of states’ lowest-cost Clean Power Plan strategy.”
He added: “Having policy certainty with the tax credits in place overcomes one challenge, but others still exist, including availability of the necessary power lines. New transmission can act as a renewable energy superhighway, delivering low-cost wind energy from rural areas to densely-populated U.S. cities where it’s needed the most,” said Kiernan.
Reports out this week from the Southwest Power Pool and researchers at the National Oceanic and Atmospheric Administration confirm that investments in new transmission pay big dividends to a region and save consumers money, as well as being critical to meeting the nation’s carbon reduction goals.
“ERCOT has experienced several new wind generation records in the past year,” said Dan Woodfin, ERCOT director of System Operations. “These records are the result of several factors, including growth in installed capacity, a significant investment in the transmission system in Texas, and improved forecasts and market tools that help us integrate these resources reliably.”
According to AWEA’s report, Iowa now ranks second in the nation in total installed capacity with more than 6,000 MW. Oklahoma just surpassed 5,000 MW installed, and New Mexico has become the 17th state to enter the ‘gigawatt club,’ passing the 1,000 MW threshold. Texas continues to lead the nation with over 17,700 MW of installed capacity, more than twice that of any other state.
“Oklahoma has done a tremendous job of positioning the state as a competitive and attractive market for the wind industry to invest, and the benefits have been significant,” said Stephen Pike, VP of Operations and Maintenance for Enel Green Power North America, which last year in Oklahoma brought online more than 420 MW of capacity for a total of nearly one GW in the state.
Connecticut also saw its first utility-scale wind project completed during the fourth quarter, bringing the number of states with online wind projects to 40.
Market activity continues to be robust with the industry starting construction on over 1,850 MW of new wind power projects in the fourth quarter. The more than 9,400 MW of projects under construction at the conclusion of 2015 represents a slight decrease from recent records, due to the large number of projects completing construction and coming online in the fourth quarter. However, construction activity is expected to gain momentum in coming quarters with the policy certainty.
American cities grow market for low-cost wind energy
Fortune 500 companies continued to invest in low-cost wind energy during the fourth quarter as a way to lower their carbon footprints and lock in low-cost, stable electricity prices.
Non-utility purchasers accounted for approximately 75% of the total MW contracted under wind-power purchase agreements signed in the fourth quarter of 2015. This includes Fortune 500 companies like General Motors, Google Energy, and Procter & Gamble, which announced plans in October to use 100% wind power to make iconic brands Tide, Gain, Dawn, Downy, Febreze, and Mr. Clean.
“Last year saw unprecedented adoption of long-term renewable energy from corporate, industrial, and institutional customers in the U.S.,” said John Powers, who leads the strategic renewables advisory division at Renewable Choice Energy. “This growth was triggered by the compelling economics in certain grid regions alongside a growing understanding in the developer community of how to meet the unique needs of the corporate buyer. With the extension of the PTC and ITC, we anticipate that this sector will continue its rapid growth; it really is the new market for renewable energy.”
American cities have also increasingly turned to renewable energy to power their municipal utilities and local governments. Greensburg, Kansas, Aspen, Colorado, Burlingotn, Vermont, and Georgetown, Texas are examples of cities choosing to meet a large share of their municipal electricity needs with renewable energy. These utilities and city governments signed a mixture of PPAs and long-term contracts to purchase wind energy from specific projects.
Despite increased interest from non-utility purchasers, utilities continue to invest strongly in wind power. During the fourth quarter, more than 2,300 MW of the installed capacity had PPA contracts with utilities.
Out of the 4,000 MW of wind PPAs signed in 2015, 1,800 MW came during the final quarter of 2015. PPAs allow purchasers to lock in a fixed price for electricity provided by zero-emission wind power over periods of 10 to 20 years. The long-term contracts protect against volatile fuel prices, helping purchasers reduce risk and saving consumers on the major power grids billions of dollars a year.
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