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Record Number of Wind Energy Projects Under Construction

Record growth in wind energy construction after an uncertain 2013

For American wind power, 2013 was the best of times, and the worst of times. On one hand, the American Wind Energy Association (AWEA) reports that 1.084 gigawatts (GW) of wind power came online in 2013, down fully 92 percent from the 13.131 GW of new capacity brought online in 2012.

Despite yet another expiration of the Production Tax Credit in Congress, there are a record number of wind energy projects under construtionNot surprisingly, we can thank Congress for the precipitous drop in new wind capacity last year due to uncertainty and delay in dealing with the Production Tax Credit (PTC). We can all recall fondly the looming threat of the “fiscal cliff” that ushered in the start of 2013. The PTC was allowed to expire on December 31st 2012, extended the next day and signed back into law on January 2nd. By then the damage had been done for 2013. According to the AWEA when the PTC is allowed to expire the wind energy industry typically experiences a 70 percent to 95 percent drop-off in new installations. 2013 bore out this historical trend.

Originally enacted as part of the Energy Policy Act of 1992, Congress has extended the PTC five times and allowed it to expire 5 time, the last time on December 31, 2013. Given the “off” status of Congress’ on-again, off-again approach to energy governance, you may think things don’t look well for 2014 for wind energy growth. Fortunately, part of the American Tax Payer Relief Act of 2012, enacted in January 2013, allows eligible wind projects under construction before January 1st 2014 to qualify for the PTC.

Now the good news.

In it’s fourth quarter 2013 report, AWEA reports a record 12,000 megawatts (MW) of new wind energy capacity under construction at the end of 2013. Of that, 10,900 MW started construction in the forth quarter. AWEA also reports at least 60 Power Purchase Agreements for nearly 8000 MW were established between utilities and corporate buyers.

Congress and the PTC –  why bad governance must end

Even with a record number of new projects under construction, Congress needs to stop it’s short-sighted policy for the PTC. Not only does it adversely impact renewable energy development, it hampers overall economic growth. According to the Union of Concerned Scientists, wind capacity more than tripled between 2007 and 2012, representing an average annual investment of $18 billion. There are now more than 550 manufacturing plants in 44 states producing 72 percent of all wind turbines and components in the United States. That’s a 25 percent increase since 2006. Furthermore, the cost of generating electricity from wind power has fallen by more than 40 percent in just the past three years.

Now it’s time for Congress to act responsibly on behalf of all Americans and offer long term support of the future of America and the new energy economy.

“Our current growth demonstrates how powerful the tax credit is at incentivizing investment in wind energy,” says AWEA CEO Tom Kiernan. “Now it’s up to Congress to ensure that growth continues by extending this highly successful policy.”

Let your Senators know you want action to support U.S. wind energy growth!

Image credit: ClarkMaxwell, courtesy flickr

The post Record Number of Wind Energy Projects Under Construction appeared first on Global Warming is Real.

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Discussions

Jesper Antonsson's picture
Jesper Antonsson on Feb 9, 2014 3:23 pm GMT

Wouldn’t it be a better idea to remove the PTC completely? Add a carbon tax and wind should be fine anyway.

Robert Bernal's picture
Robert Bernal on Feb 9, 2014 9:54 pm GMT

We need the PTC for wind because it is the least expensive renewable. Wind can generate about 20% of a complete planetary civilization (until “free” and massive storage is available). Hopefully, the parts will become less expensive so that the industry doesn’t “fail” every time congress changes their minds.

It’s a shame that we have such costly subsidies for solar, though. The industry will never cut costs if it is always guaranteed so much help! However, we can’t just give up on solar, either. Its advancement needs to be the catylist towards the development of the autonomous machinery needed to extract and make the clean energy infrastructure, economically possible.

Can we rely on the renewables to completely replace fossil fuels in a growing world, to prevent fossil fueled depletion into an overheated biosphere?

We also need government help to get the ball roll’n for closed cycle nuclear because it can power a complete planetary civilization for less cost (once people realize that it can be melt down proof with only 1% of the wastes as conventional nuclear). It is intrinically less expensive than any renewable capacity because it requires far less material to build reactor capacity.

The scientifically sound fossil fuels replacement strategy depends on developing ALL of the clean energy options!

Nathan Wilson's picture
Nathan Wilson on Feb 10, 2014 12:55 am GMT

New taxes of any kind will be hard to sell to congress.  The PTC is a tool that is best suited for new technology, which wind, at 4% of all electricity generation, is not.  

A CO2 emissions portfolio standard for utilities makes more sense than placing regulations on individual plants, since it is really the total that matters.  It gets the government out of the business of picking  winners, since utilities can choose a regionally appropriate low carbon technology.

John Miller's picture
John Miller on Feb 10, 2014 2:00 am GMT

If “the cost of generating electricity from wind power has fallen by more than 40 percent in just the past three years”, why does this industry still need 2.3 cent/KWh PTC subsidies.  This represents a subsidy on the order of 50% based on average 2013 wholesale prices.  If Congress does renew the PTC, shouldn’t the levels of wind power generation subsidies be reduced significantly in each future year, since the cost to produce wind power is apparently being reduced substantially each year.  If wind power is truly sustainable and ultimately affordable it should not need any Federal subsidies in the not too distant future.

Schalk Cloete's picture
Schalk Cloete on Feb 10, 2014 12:37 pm GMT

The $30/MWh pre-tax value of the PTC is equivalent to a CO2 price of roughly $70/ton levied on gas-fired plants. I think it is safe to say that we are still many years away from seeing such a strong CO2 price. 

Schalk Cloete's picture
Schalk Cloete on Feb 10, 2014 12:59 pm GMT

Well, we will probably not run out of wind anytime soon, but it is possible that climate change can have a significant impact on wind speeds over coming decades. Since wind turbine output is proportional to the wind speed cubed, even a small change in the average wind speed can have substantial impacts on wind turbine economics. 

It is possible that a reduction in the temperature gradient between the poles and the equator can reduce global wind speeds, that more frequent extreme weather can force more downtime and reduce turbine lifespan, and that regional wind patterns can shift significantly within timescales in the order of a wind farm lifetime. 

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