U.S. Wind Energy Construction Booms After 92 Percent Drop in 2013

More than 12,000 megawatts of U.S. wind power plants were under construction at the end of 2013, the most ever, as developers raced to qualify for an expiring federal tax credit, according to the American Wind Energy Association.

That’s about 11 times the amount of wind power that went into service last year after installations plunged 92 percent to 1,084 megawatts, the Washington-based trade group said today in a statement.

Congress let the production tax credit lapse briefly at the start of last year, and uncertainty over the policy slowed wind development almost to a halt after 13,131 megawatts of new turbines were added in 2012. Once the credit was reinstated, it took much of the year for development activity to resume, said Liz Salerno, AWEA’s chief analyst.

“We knew 2013 was going to be lackluster after the record installations in 2012,” she said in an interview today. Now the industry is gearing up for significant growth, with 10,900 megawatts beginning construction in the fourth quarter. “That’s an unprecedented level of activity.”

Developers that signed contracts to sell wind power to utilities, and haven’t yet started construction should complete an additional 5,200 megawatts over the next two years, AWEA said.

The credit pays owners of wind farms 2.3 cents a kilowatt-hour for electricity. When the incentive lapsed, it covered projects that went into service by the end of 2012, part of the reason why it was a record year.

When it was extended for a year at the start of 2013, the language was changed to apply to power plants that began construction by Dec. 31. That spurred the fourth-quarter surge in new construction, Salerno said.

That shift is driving demand for new turbines. At the end of last year developers signed contracts for equipment from manufacturers including General Electric Co. and Siemens AG. (SIE) Down payments of 5 percent of a project’s total cost may qualify a project for the credit.