After Dismal Year, Wind’s Future Looks Brighter
Last year the American wind industry built only 5,115 MW (5.1 GW) of wind power, barely half of the record amount installed in 2009, AWEA said in its Fourth Quarter Market Report.
This year China’s total wind capacity surpassed U.S. capacity for the first time. China now has 41.8 GW, compared to the 40.2 in the U.S., AWEA said.
But AWEA said the industry now has 5.6 GW under construction in the U.S., and wind is becoming cost-competitive with natural gas.
“Wind power is a great deal right now in many areas of the country,” said Denise Bode, CEO of the American Wind Energy Association (AWEA). “However, our industry continues to endure a boom-bust cycle because of the lack of long-term, predictable federal policies, in contrast to the permanent entitlements that fossil fuels have enjoyed for 90 years or more.”
In its final days, the 111th Congress passed a one-year extension to the section 1603 investment tax credit, which has been a crucial incentive for wind power development.
More projects are expected to start up this year to meet the tax credit’s deadline at the end of 2011.
AWEA argues that wind prices are now on par with those of natural gas. Low natural gas prices have worked against wind development for the last few years. Most famously, natural gas tycoon T. Boone Pickens announced he was cancelling plans to build one of the world’s biggest wind farms, after a fall in oil and natural gas prices, as well as the recession, made the wind plan untenable.
“Wind’s costs have dropped over the past two years, with power purchase agreements being signed in the range of 5 to 6 cents per kilowatt-hour recently.” AWEA director of industry data & analysis Elizabeth Salerno said. “With uncertainty around natural gas and power prices as the economy recovers, wind’s long-term price stability is even more valued. We expect that utilities will move to lock in more wind contracts, given the cost-competitive nature of wind in today’s market.”
The five states with the most wind capacity at the end of 2010 were:
- Texas: 10,085 MW
- Iowa: 3,675
- California: 3,177
- Minnesota: 2,192
- Washington: 2,105
Texas pushed past the 10,000 MW mark just last year, installing 680 MW in 2010. Wind now generates 7.8 percent of electricity on Electric Reliability Council of Texas (ERCOT) grid, which covers most of the state.
Delaware and Maryland both saw their first utility-scale wind projects built in 2010, AWEA said, pushing the number of states with wind power up to 38.
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