MAKE’s latest wind power outlook for North America forecasts another boom and bust cycle for the U.S. market and a westward shift of wind power installations in Canada.
After 2021, the PTC phase-down offers limited value, and in the absence of long-term policy drivers such as the Clean Power Plan, wind will fight for new capacity additions in pure-LCOE competition for the first time in U.S. history.
In the U.S., the four-year installation window for the latest extension of the production tax credit (PTC) will drive a record ~40 GW market from 2017 to 2020. Various considerations on the demand and supply sides of the industry will result in most of this capacity reaching commercial operation in 2019 and 2020, potentially exposing projects to complications from political upheaval and construction resource shortages.
Several such complications loom in the U.S. outlook: Corporate tax reform threatens to reduce the appetite for tax equity investments that have financed more than half of all U.S. wind installations in recent years. A border adjustment or other tariff action would destabilize a domestic supply chain that has become increasingly reliant on turbine components sourced from abroad. Shortages in engineering, procurement, and construction resources are on the horizon as well.
Key points:
- The U.S. market is witnessing a four-year boom period through 2020, driving nearly 40 GW of demand
- After 2021, the PTC phase-down offers limited value, and in the absence of long-term policy drivers such as the Clean Power Plan, wind will fight for new capacity additions in pure-LCOE competition for the first time in U.S. history
- In all, only 11.5 GW of onshore wind will be installed from 2022 to 2026 in the U.S., almost entirely confined to a handful of states in the center of the country.
MAKE also forecasts that Canada will install 6.2 GW of new wind capacity from 2017 to 2026.
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