Are energy answers blowing in the wind?

Alex Crees
By Alex Crees October 4th, 2018
For business

U.S. wind power grew rapidly in 2017, with more than 7,000 megawatts of capacity added, according to a U.S. Department of Energy report.

Per this year’s Wind Technologies Market Report, wind accounted for a quarter of all electric-generating capacity additions last year, falling only behind solar and natural gas as the nation’s third-largest source of capacity additions.

Will wind continue to see the same success moving forward?  And what does the future of wind technology look like?  Here are five key takeaways from the report:

The U.S. ranks 2nd in capacity, but lags in penetration

Globally, wind capacity additions totaled 52,500 MW in 2017, falling short of 2015’s record 63,600 MW of capacity added.  Accounting for 2017’s wind capacity additions, 539,000 MW of wind power  have been installed worldwide.

With 7,017 MW of new capacity, the U.S. ranked second last year in annual and cumulative wind capacity – as well as annual wind generation –  behind China.

For more information, see Wind Energy Generation by State in our Data Center

“Supported by favorable tax policy and other factors, cumulative wind power capacity grew to 88,973 MW [in the U.S.],” according to the report.

Though the nation’s wind industry saw a successful year in terms of installations, the renewable energy source only made up 6.3 percent of total U.S. power generation, up from 5.7 percent in 2016.

This level of penetration lag s other countries, such as Denmark, where wind is estimated to supply the equivalent of 48 percent of demand, and Ireland and Portugal, where wind supplies approximately 30 percent of demand.

Texas is still the nation’s leader

Once again, Texas led the way in terms of wind capacity additions, installing 2,305 megawatts of wind energy in 2017, which brought its total wind capacity to nearly 22,600 megawatts.

“On a cumulative basis, Texas remained the clear leader,” the report authors said.

That’s not to say other states didn’t see wind-related wins: In Iowa, Kansas, Oklahoma and South Dakota, wind accounted for at least 30 percent of all in-state power generation last year.  Fourteen states generated at least 10 percent of their energy from wind, and 24 states installed new utility-scale wind turbines.

Over the last decade, wind has constituted 30 percent of all U.S. capacity additions – particularly in the Interior (55 percent) and Great Lakes (44 percent) regions.  Wind has traditionally seen smaller amounts of growth in the Northeast (19 percent), West (18 percent) and Southeast (2 percent).

Tax credits have been crucial to success

Supported by a favorable tax policy – namely, the federal renewable electricity production tax credit, which incentivizes clean energy development – $11 billion was invested in new wind power plants in 2017.

Congress passed a five-year extension of the credit in 2015 that provides the full PTC to wind projects that started construction before the end of 2016, but phases out the credit for projects that started construction in subsequent years.

“Projects that started construction in 2017 get 80 percent of the PTC, which drops to 60 percent and 40 percent for projects starting construction in 2018 and 2019, respectively,” the report’s authors explained.

As a result, the authors predict “wind power capacity additions will continue at a rapid clip for the next several years, before declining, driven by the five-year extension of the PTC and the progressive reduction in the value of the credit over time.”

Bigger turbines = better performance

Recent technological trends, such as bigger turbines, have enhanced wind project performance and optimized costs.

Average capacity, rotor diameter and hub height all increased in 2017 in accordance with long-term trends observed over the past decade.

“To optimize wind power project cost and performance, turbines continue to grow in size,” the authors said.

The average rated capacity of turbines installed in 2017 was 2.32 megawatts, an 8 percent increase compared to 2016 and a 224 percent increase compared to 1998.

Diameter has grown 4 percent year-over-year, to 113 meters (a 135 percent increase compared to 1998), and hub height has grown to 86 meters, a 4 percent increase from 2016 and a 54 percent increase since 1998.

Permit applications to the Federal Aviation Administration indicate turbines will continue to grow.

“Federal Aviation Administration permit data suggest that near-future wind projects will deploy progressively taller turbines, with a significant portion (>35 percent) of permit applications in early 2018 over 500 feet,” the authors said.

Prices are falling

Turbines may be getting bigger, but prices, conversely, aren’t.

According to the report, the price of turbines has declined from $1,600 per kilowatt in 2008 to $750–$950 per kilowatt, which was associated with a $795/kW decrease in reported project costs from $2,405/kW in 2008 to $1,610/kW in 2017.

The price of the energy generated from those turbines has also fallen: “After topping out at $70/MWh for power purchase agreements (PPAs) executed in 2009, the national average levelized price of wind PPAs within the Berkeley Lab sample has dropped to around or even below $20/MWh,” the authors wrote.

They note the projects within the sample largely hail from the lowest-priced Interior region, where most new capacity has been added in recent years.

“Today’s low PPA prices have been enabled by the combination of higher capacity factors, declining installed costs, and record-low interest rates documented elsewhere in this report; the PTC has also been a key enabler over time,” they said.

Alex Crees is a writer covering issues related to energy, the environment and politics.  Her work has appeared in Fox News and Prevention. Alex earned a bachelor’s degree in journalism from New York University.