In October, the American Wind Energy Association (AWEA) reported that the success of the federal Production Tax Credit and wind energy’s increased affordability are helping drive turbine installations to record levels in America.
The U.S. wind industry in August for the first time surpassed 50,000 megawatts (MW) of total installed electrical generation capacity – enough to power 13 million homes. America has added 4,728 mw of wind power so far this year with another 8,430 mw currently under construction.
Factors for the strong year so far include:
- Greatly expanded U.S. manufacturing, which now makes up to nearly 70 percent of the value of U.S.-installed equipment, cutting transportation costs
- Technological advances, such as higher towers and longer blades, which make turbines more efficient and further drive down costs
- The fact that more electric utilities are locking in 20- to 25-year contracts for lower-priced wind power, to the benefit of their consumers
- The federal Production Tax Credit for renewable energy, which has been kept continuously in place since 2005 and currently extends to the end of the year
“This is what a successful policy looks like when it’s working, but whether wind will continue to be a bright spot in the U.S. economy now depends on whether Congress acts to extend the Production Tax Credit by the end of the year,” said Denise Bode, CEO of AWEA.
Wind Power Tax Credit
The tax credit incentivizes over $15 billion a year in private investment in U.S. wind farms. It currently is set to expire on Dec. 31, 2012. A proposal to extend the tax credit for projects that start construction next year won bipartisan support from the Senate Finance Committee on Aug. 2, as part of an overall “tax extenders” package. It now awaits action by the full Congress, expected in its lame duck session after the election.
“We have the bipartisan support to get the job done,” Bode said, “but it is up
to Congress to bring it to a vote or else lose 37,000 jobs by the first quarter
of next year.” That is what Navigant Consulting has forecast will be the job
loss if the credit is not extended.
The year-to-date total stood at 4,728 mw at the end of the quarter, up 40 percent from the same point in 2011. The average turbine size installed throughout the year continues to hover around 2.0 MW.
Top states for installed new wind capacity during the third quarter include Kansas, on track to more than double the state’s wind capacity this year with 473 mw added; Oregon (333 mw); Texas (281 mw); Oklahoma (229 mw); and Nevada (152 mw).
- Nevada’s wind project was its first, making it the 39th state with utility-scale wind installations.
- Across 29 states and Puerto Rico, there are currently more than 8,430 mw under construction, a record for this time in the year.
- Texas leads the nation with 1,291 mw under construction, followed by California (1,022 mw); Kansas (836 mw); Oklahoma (734 mw); Iowa (597 mw); Colorado (496 mw); Illinois (480 mw) and Michigan (472 mw). In total, 10 states are on track to add at least 500 mw of wind this year with Texas, California, Kansas and Oklahoma on track to add over 1,000 mw each.
- Utilities are locking in more wind power on long-term contracts. Over 80 percent of the new capacity coming online or under construction is covered by a long-term power offtake agreement, either through a power purchase agreement between a utility and a wind developer, or through direct utility ownership. In fact, projects online through the third quarter and under construction are either owned by or have contracted power with 68 different utilities.
Texas Wind Power Leader
The Electric Reliability Council of Texas (ERCOT), grid operator for most of the state, set a new wind record on Nov. 10, 2012.
Wind power output reached 8,521 megawatts (mw) at 10:21 a.m. This represented nearly 26 percent of system load at the time and surpassed the previous instantaneous record, set the evening of June 19, 2012, by more than 150 mw.
One megawatt is enough electricity to power about 200 homes during hot summer days when electric use is highest and about 500 homes during periods of typical consumption.
"We have surpassed previous wind power records several times this year," said Kent Saathoff, ERCOT’s vice president of Grid Operations and System Planning. "While added capacity is one reason for this growth, experience and improved tools also are enabling ERCOT to integrate this resource into the grid more effectively than ever before."
Nearly 7,000 mw of the new record included wind power from West Texas wind farms, followed by more than 1,100 mw from wind farms along the Texas Coast.
ERCOT has more than 10,000 mw of wind power capacity, with nearly 21,000 mw of additional wind generation under review. The completion of high-voltage transmission projects in Competitive Renewable Energy Zones by the end of 2013 will improve ERCOT’s ability to move wind power from West Texas to the metropolitan areas where demand on the grid is highest.
ERCOT manages the flow of electric power to 23 million Texas customers -- representing 85 percent of the state's electric load.