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U.S. Wind Power Is ‘Going All Out’ with Bigger Tech, Falling Prices, Reports Show
View Date:2025-01-08 15:45:53
Wind power capacity has tripled across the United States in just the last decade as prices have plunged and the technology has become more muscular, the federal government’s energy labs report.
Three new reports released Thursday on the state of U.S. wind power show how the industry is expanding onshore with bigger, more powerful turbines that make wind energy possible even in areas with lower wind speeds.
Offshore, the reports describe a wind industry poised for a market breakthrough.
“Right now it’s going full bore,” said Mark Bolinger, a research scientist at the Lawrence Berkeley National Laboratory and co-author of one of the new reports. “The industry is really going all out.”
Some of the key findings:
- The country’s wind energy capacity has tripled since 2008, reaching 88,973 megawatts by the end of 2017. Wind contributed 6.3 percent of the nation’s electricity supply last year.
- The average price of wind power sales agreements is now about 2 cents per kilowatt-hour, down from a high of 9 cents in 2009 and low enough to be competitive with natural gas in some areas.
- State renewable energy requirements once were the leading contributor to demand for new wind farms, but they were responsible for just 23 percent of new project capacity last year due to rising demand for clean energy from corporate customers, like Google and General Motors, and others.
- Offshore wind is going from almost nothing, with just five wind turbines and 30 megawatts of capacity off Rhode Island, to 1,906 megawatts that developers have announced plans to complete by 2023.
“The short story is wind is doing well in the markets, has been doing well, and looks like it will continue to do well,” said Michael Webber, deputy director of the Energy Institute at the University of Texas at Austin, who was not involved with the reports.
“It’s despite a lot of these policy shifts that have happened under the Trump administration,” he said, referring to proposed rules aimed at boosting fossil fuels. “It’s as if the markets have spoken, and they’ve chosen wind.”
Texas is the country’s wind energy leader by a long stretch, with 22,599 megawatts of capacity, including 2,035 megawatts newly installed last year, which also led the nation.
Oklahoma was second for total capacity and new capacity last year, with 7,495 megawatts and 851 megawatts, respectively. That’s likely to slow, though, after Gov. Mary Fallin signed legislation in April to end a key state tax incentive for wind power three years early.
Nationally, an important driver for onshore wind power expansion has been the federal Production Tax Credit, which is also phasing out. The ticking clock for incentives has led to a surge in projects heading into 2020, the final year when developers can get the full value of the credit.
Onshore Wind Boosted By Bigger Turbines
Turbines at land-based wind farms are getting larger and more efficient, according to the Lawrence Berkeley Labs report. This has pushed average turbine capacity to 2.32 megawatts, up 8 percent from the prior year and up more than 200 percent since the late-1990s.
Rotors are getting larger, blades are getting longer, and turbines are getting taller, with more projects exceeding 500 feet—the level at which federal aviation regulators need to issue a special permit.
Increases in size and other design improvements are allowing turbines to operate at levels closer to their full capacity. Turbines built between 2014 and 2016 had an average “capacity factor” of 42 percent, compared to an average capacity factor of 31.5 percent for projects built from 2004 to 2011. (For a capacity factor of 100 percent, a power plant would be running at full capacity around the clock.)
Tax Credits Drive the Market Outlook
The U.S. industry has a track record of market cycles that are tied to qualifying for federal tax credits. This is what led to a still-standing record for capacity additions in 2012, followed by a drop-off in 2013.
Current tax credits are likely to lead to another banner year in 2020 and 2021. “After that, it’s less certain,” Bolinger said.
But the annual ups and downs do not provide a complete picture, because wind farms take years to develop. For instance, looking at 2017 in isolation, new project completions were slightly down for the second year, yet it was the third consecutive year of 7,000 or more megawatts of new capacity, the first time that had happened in the U.S. market.
Offshore Wind Energy on the Rise
The U.S. offshore wind market is gearing up for major growth, with the tiny Block Island Wind Farm in Rhode Island about to get a lot of company, the new report from the National Renewable Energy Laboratory suggests.
Thirteen states have offshore wind projects in some phase of development, or areas that are likely to be open for leasing: California, Connecticut, Delaware, Hawaii, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Ohio, Rhode Island and Virginia.
In Massachusetts, the Vineyard Wind project, expected to be started next year and completed in 2021, stands to become the country’s largest offshore wind farm for at least a few years at 800 megawatts.
Massachusetts is one of several states in the Northeast that have passed laws to encourage offshore wind, setting off a competition as states try to attract the companies that will serve the industry.
Offshore wind is an attractive option there, in part because it would be close to major population centers in a way that would be difficult for onshore wind or solar projects in densely populated areas.
But even with projects planned, the United States is far behind the offshore wind leaders. The United Kingdom and Germany have 5,824 and 4,667 megawatts, respectively, followed by China, with 1,823 megawatts.
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