The United States
The past decade has seen enormous growth in the US wind energy. Back in 2000, slightly more than 2.5 GW had been installed. By the end of 2009, that had risen to a world-leading installed wind farm capacity of more than 35 GW.
However, that growth has never been steady. For reasons that often seem to have more to do with Washington politics than political will, national policy has been short-term and inconsistent, with the industry (especially in the first five years of the decade) either speeding to catch the green light, or braking hard.
Although the last few years have seen more stability, as this report is being written (late July 2010) the American Wind Energy Association (AWEA) has announced that wind power installations in the first half of 2010 (1,239 MW) have dropped by 71% compared with the same period in 2009 (in total, 2009 saw the addition of a massive 10 GW of new wind turbines) and by 57% compared with the first half of 2008.
However, despite a strong pipeline and a slight increase in wind turbines orders in the second quarter, 2010 will continue to be affected by the low level of orders in the immediate aftermath of the economic crisis as well as a drop in electricity demand.
Wind power now generates close to 2% of US electricity needs, but experts estimate that with the right policies in place, the potential is much greater. And with the US Energy Information Administration calculating that the country needs the addition of 89 GW of new power generating capacity by 2030, largely to replace ageing power plants, wind turbines can make a powerful contribution.
In 2008, the US Department of Energy released a groundbreaking 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, while a new assessment from the National Renewable Energy Laboratory published in February 2010 showed that onshore US wind resources could generate nearly 37 million GWh annually, more than nine times current total US electricity consumption.
Thirty-six US states now have utility-scale wind farms, and 14 of these have over 1 GW in operation. Texas leads, with over 9 GW of wind power, of which 2.3 GW were new installations in 2009 (including the world’s largest wind farm, the 627 wind turbines, 781.5 MW Roscoe wind farm).
Iowa, California, Washington state and Minnesota follow in terms of installed capacity, with Iowa receiving 14% of its 2009 electricity consumption from wind energy.
The US wind energy market has had two policy stimuli for some years. At the national level there has been a Production Tax Credit (with erratic terms/extensions); while a growing number of states followed the Texan example by introducing a state Renewable Energy Standard (RES), requiring a certain percentage of power in the state to come from renewable sources (with wind generally providing the majority of this).
Twenty-eight states currently operate an RES (sometimes known as an RPS). In February 2009 a package of measures were introduced as part of the American Recovery and Reinvestment Act: extension of the PTC to 2012; an option to receive an investment credit tax instead of the PTC ; tax credits for new wind turbines manufacturing facilities; a 6 billion USD renewable energy loan guarantee programme.
Together these were very beneficial in maintaining momentum in the sector during the 2008–2009 economic downturn. 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 is seeking a national renewable energy standard (RES).
This would stimulate utilities to buy wind power and conclude power purchase agreements, which are currently difficult to obtain, due to the drop in overall electricity demand, lower natural gas prices, and the absence of a clear national renewable energy policy.
There is still some chance that such a measure could be adopted before the end of 2010. Another policy issue that needs to be addressed is the regulatory structure for transmission. New transmission is needed to connect the good wind sites with towns and cities – at present planning, financing and permitting are slow and difficult processes and according to AWEA, many new wind farm projects are on hold in the United States due to transmission limitations.
At the end of 2009 the US wind industry employed 85,000 people, and the eight leading suppliers of turbines to the US market have either established manufacturing facilities or announced plans to do so. GE Wind supplied over 46% of new turbines installed during 2009, with seven others supplying between 4% and 12% each.
Although the United States has yet to enter the offshore wind energy sector, the 420 MW Cape Wind farm project off the Massachusetts coast won final approval in April 2010, and there are a number of wind farm projects at different stages of development, including in the Great Lakes.
Canada has an immense wind resource, and its wind power capacity has grown tenfold in between 2004 and end of 2009, a year during which 950 MW was installed. Canada was a relatively slow starter so the total installed capacity at the end of 2009 was 3.3 GW – yet this is sufficient to provide 1.1% of the country’s electricity.
Each of the provinces now has some wind farm installed, and new government power purchase agreements for at least six provinces in 2010 should ensure a record-breaking year. The Canadian Wind Energy Association (CanWEA) in its ‘WindVision 2025’ document sets a goal of producing 20% or more of the country’s electricity from wind power by 2025.
Canada’s leading province in terms of wind power is Ontario, with 1,168 MW of wind installed and a further 647 MW under contract at the end of 2009. Ontario’s Green Energy Act, announced in 2009, introduced a feed-in tariff for wind power, with enhanced tariffs for community projects and ‘First Nations’ (i.e. Native American) projects, and a higher rate for offshore wind.
The Ontario Power Authority has a plan that calls for 4.6 GW of wind energy by 2020, and many other provinces have signed contracts to expand their wind energy capacity during 2010 and beyond. At federal level there is disappointment about the government’s decision not to extend Canada’s ecoENERGY federal incentives.
It was announced in March 2010 that the ecoENERGY programme – set up in 2007 to support the construction of over 4 GW of renewable energy projects – had already allocated all of its funding and would be supporting no wind energy projects built after March 2011. The concern is that this would make Canada less attractive to investors than its southern neighbour.
Mexico, too, has an outstanding wind resource, especially in the Oaxaca region. In 2009, Mexico’s installed wind capacity more than doubled, adding 117 MW of new capacity to the 85 MW that were operating at the end of 2008, bringing the total installed wind power capacity to 202 MW.
This increase was the result of two private self-supply projects brought online in 2009, ‘Parques Ecológicos de México’ (79.9 MW) and the first phase of the ‘Eurus’ wind farm (37.5 MW). The first half of 2010 saw the addition of a further 300 MW. At present, however, hardly any of Mexico’s wind power makes its way into the national grid. Rather, it is used on-site by self wind turbines, such as heavy industry.
The government is struggling to come up with a regulatory framework that could really open up the very substantial resources in the country. Though it is the Oaxaca region that has seen most development so far, the Baja region also has good potential and is attracting the eye of potential developers from the US.
The GWEO scenarios For OECD North America
Within this region we are looking at the three distinct markets of the United States, Canada and Mexico. And with the various states and provinces having policies of their own, there is potentially more variability here than in the single market of China, for instance.
Our three possible projections start with 2010, and the Reference scenario predicts relatively modest growth of 6.5 GW (as compared with the actual figure of 11 GW added during 2009), while the Moderate and Advanced scenarios anticipate addition of about 11 GW for 2010.
In fact the Reference scenario anticipates a flat market of some 6 GW per year, across North America, for the next couple of decades, slowing to 3.5 GW by 2030. This is considerably less than the US Department for Energy projections of annual markets reaching 16 GW by 2018 and stabilising at this rate, in the US alone, not even counting growth in Canada and Mexico.
The Reference scenario numbers would result in a total wind power capacity of 141 GW by 2030, which would produce 346 TWh of electricity and save the emission of 207.6 million tonnes of CO2 every year. Jobs in the sector would peak ten years from now, when the industry would employ under 90,000 people.
However, the alternative scenarios show wind energy taking a much more significant role across this continent. Even the Moderate scenario shows that by 2020, the annual market for new wind turbines installations could be more than twice the size of the record-breaking 2009 market, and by 2030 wind power would be producing over a thousand terawatt hours of electricity per year while saving the emission of over 600 million tonnes of CO2 each year – three times that in the Reference scenario.
Under this scenario, investments in wind power would peak around 2020, reaching some US$37 billion per year, but then tailing off. If the Advanced scenario could be realised, all these figures would be dwarfed: massive CO2 savings of over 1,000 million tonnes would be made each year by 2030, the sector would be employing 700,000 people, and wind power alone would be providing 1,700 T Wh of electricity per year across North America.