November 02, 2010

U.S. Wind Industry Reports Slowest Quarter Since 2007

The U.S. wind energy industry has experienced its slowest quarter since 2007 and seeks swift action to strengthen policies that unleashed a wave of private investment in 2008 and 2009.

The U.S. industry added just 395 MW of wind-powered electric generating capacity in the third quarter of 2010, making it the lowest quarter since 2007. Year-to-date installations stood at 1,634 MW, down 72 percent versus 2009, and the lowest level since 2006. In 2010, wind projects in the U.S. are being installed at half the rate as in Europe, and a third of the rate as in China.

Factors include lack of long-term U.S. energy policies, such as a Renewable Electricity Standard, and resulting lack of certainty for business, which has the country's utilities failing to move forward with wind build-out plans. Such policies are already in place in China and Europe, resulting in more than $35 billion of expected investment in 2010 –nearly four times the investment the U.S. will see this year. The industry calls on Congress to match such efforts to establish long-term policy.

"We're increasing our dependence on fossil fuels, impacting our national security, instead of diversifying our portfolio to include more renewables," said Denise Bode, CEO of the American Wind Energy Association (AWEA), the national trade association of over 2,500 companies.

Data from the U.S. Energy Information Administration and other third-party sources show that wind accounted for 39 percent of new installed capacity in 2009, versus 13 percent from coal; in the first nine months of 2010, however, the ratio flipped, and wind accounted for only 14 percent, versus 39 percent from coal.

"At the same time, wind is becoming an even better deal," Bode said, "with up-front costs decreasing, higher-performing technology, and the certainty of a long-term stable price." Wind has become cost-competitive with all new methods of generation, and is not subject to fuel price spikes, or environmental regulations on pollutants, water use, etc.

Swift, short-term action to extend tax credits for renewable energy in 2009 helped boost the U.S. wind industry to historic job growth and a high of 10,010 MW in new capacity last year. With swift passage of a Renewable Electricity Standard, Bode said the wind industry can get back on track, and add new generation faster than any other source of electricity.

"U.S. wind energy can again lead the world," Bode said, "but if federal policymakers do not act quickly to provide investment certainty through a Renewable Electricity Standard, and longer-term tax policy like our energy generation competitors enjoy, the U.S. wind industry will stall out."

Bode noted that domestic content of U.S. wind turbines has steadily increased with nearly 400 facilities in the U.S. manufacturing components for wind turbines, aided by a degree of stability of the Production Tax Credit, the support of a refundable tax credit under the Recovery Act, and state requirements for renewable energy.

Bode said the best way to galvanize the industry now will be continued tax credits and a federal benchmark of 15 percent renewables in the national electricity mix by 2020, as sponsored in the U.S. Senate by Energy and Natural Resources Chairman Jeff Bingaman (D-NM), Sam Brownback (R-KS), Byron Dorgan (D-ND), John Ensign (R-NV), Mark Udall (D-CO), and Susan Collins (R-ME). "That will send a clear signal to investors that the U.S. is open for business," she said.

There are now 14 states with over 1,000 MW of wind installed, and 37 states with some utility-scale wind installed. Iowa, which got over 14 percent of its electricity from wind in 2009, is nearing 20 percent from wind, although government figures for 2010 have yet to be released. Oregon took the lead in adding the most capacity in the third quarter, the spot historically filled by Texas, where the industry now awaits investment in more electric transmission lines. With 111 MW installed this quarter, Indiana moved into the top 10 wind power states.

Source : Press Release

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