The five-year average annual growth rate for the industry is now 39%, up from 32% between 2003 and 2008. US wind projects today generate enough to power the equivalent of 9.7 million homes.
The 2009 numbers reflect a fourth quarter boom, during which over just over 4,000 MW were installed, slightly below the 2008 fourth quarter total of 4,112 MW, which is still the high water mark for US wind energy installation in a single quarter.
The strong growth of US wind installations amidst an economic downturn reflects the impact of financial incentives adopted by the US Congress early in 2009.
However, to sustain the growth over a longer period, increase wind energy manufacturing jobs, and solidify wind’s place in the US energy market, the US wind industry in 2010 is seeking permanent renewable energy targets, in the form of a national renewable electricity standard (RES), which must be enacted by the US Congress and signed into law by President Obama.
The American Recovery and Reinvestment Act
In February 2009, the US Congress passed the American Recovery and Reinvestment Act (ARRA), an economic stimulus bill which included several provisions to spur development of wind energy in the adverse economic climate, such as:
*a 3-year extension of the Production Tax Credit (PTC) through to 2012;
*an option to elect a 30% Investment Tax Credit (ITC) in place of the PTC. The initial provision stipulated that this credit could then be converted into a grant for projects that begun construction or started operation in 2009, but this has now been extended until the end of 2010;
*tax credits for new manufacturing facilities;• a new $6 billion Department of Energy (DOE) renewable energy loan guarantee program.
These financial incentives, and particularly the grant programme, have been very beneficial in keeping the industry moving forward during the 2009-2010 economic slowdown.
Wind energy now operating in 36 US states
Thirty-six of the 50 states now have utility-scale wind installations and 14 states now have more than 1,000 MW installed.
Texas remains th e leading state with more than 9,000 MW of total installed capacity. Iowa is in second place with 3,670 MW, followed by California, Washington state and Minnesota. In terms of new capacity added in 2009, Texas led the pack with 2,300 MW, followed by Indiana, which got started in wind late in 2008, and installed more than 900 MW in 2009.
Oregon, Iowa and Illinois round out the top five in new capacity added in 2009.During 2009, work was completed on the world’s largest wind farm near Roscoe, Texas, with an installed capacity of 781.5 megawatts (MW), generating enough electricity to power more than 230,000 homes.
It covers nearly 100,000 acres in four counties, and hosts 627 turbines. Wind industry employs 85,000 peopleThe wind industry now employs around 85,000 people in the US, and at least 100 manufacturing plants have been built, announced or expanded in the past five years, 55 of those in 2008 alone.
The eight wind turbines manufacturers with a significant market share in the US have set up manufacturing facilities in the US, or have announced that they will do so.The five top turbine manufacturers in the US market in 2008 were GE Energy, Vestas, Siemens, Suzlon and Gamesa.
The five top wind power developers at the end of 2008, were Next Era Energy Resources (formerly FPL Energy), Iberdrola Renewables, MidAmerican Energy, Horizon-EDP Renewables, and Invenergy.
Studies show: 20% of US electricity could come from wind in 2020
Wind energy now is generating close to 2% of US electricity needs, but experts estimate that with the right policies in place, the potential is much greater. In 2008, the US Department of Energy released a ground-breaking report, finding that wind power could provide 20% of US electricity by 2030. A more recent analysis of wind integration in the Eastern region of the country drew similar conclusions.
Policy certainty: A national Renewable Energy Standard?
In the last decade the US wind energy industry has been subject to an on-again, off-again tax policy that has made it difficult to sustain momentum; growth in wind installed tended to rise and fall with the renewal or expiration of the main national policy incentive, the Production Tax Credit (PTC).
This situation has not been remedied. Although the PTC received a three-year extension as part of the Recovery Act, its future remains unclear, and there is a chance that the US market could return to the boom-and-bust cycle that it experienced in the first half of the last decade.
In order to provide stability and investor certainty to the market, the US wind industry has continuously called for the introduction of a national electricity standard (RES), which would provide a predictable, competitive market, within which renewable generators compete with each other to lower prices. RES policies currently exist in 28 U.S. states, but not at the national level.
A national RES would ideally call for 25% of the country’s electricity to come from renewable energy by 2025, with an aggressive near-term target, such as 10% by 2012, as was called for in the Obama-Biden New Energy for America plan, to ensure rapid renewable energy deployment.
This would signal a long-term national commitment to wind and other renewable energy, spur greater demand for wind energy and for wind energy components, and also lead to more turbine manufacturers building facilities in the US.
The US House of Representatives in June 2009 passed the American Clean Energy and Security Act, which contains a 20% RES by 2020 (allowing 8% of the standard to be met through energy efficiency improvements).
A similar bill, which was introduced to the Senate also in June 2009, contains 15% RES by 2020 standard, with a maximum of 4% to be met through energy efficiency improvements. However, the US Senate has not to date passed this bill, which also contains wider ranging cap-and-trade climate legislation.
The American wind energy industry is working hard on getting the RES bill passed through Congress in 2010 to provide a real long-term boost to the wind power sector.
Transmission upgrades neededThe other policy priority for the US industry concerns transmission. If the United States is to take full advantage of its wind resources, significant new transmission is needed to connect wind farms to the population centers where the power is consumed.
New transmission capacity will also have to connect markets that are now segregated. However, the present US regulatory structure makes it difficult and time consuming to get new transmission planned, financed and permitted.
The US industry is seeking changes in present laws and regulations so that new transmission lines can be built.Uncertain outlook for 2010 and beyondIt is difficult to predict how the US wind industry will perform in 2010 and beyond.
While during the year 2010, Recovery Act incentives will continue to be a driving factor, beyond this, the outlook for the industry will largely depend on market signals. Congressional action on an RES and transmission reforms will send an important signal that will stimulate demand and increase US manufacturing facilities. Only hard, long-term targets and an RES will be able provide the necessary stability for manufacturers to expand their US operations.