November 1, 2013
U.S.

Amid uncertainty, just 70 MW of wind capacity installed in 2013: AWEA

Brian Scheid | Edited by Jason Lindquist | Platts | 31 October 2013 | www.platts.com

After a record-breaking 2012 the US wind industry has slowed to a unprecedented crawl this year, installing less than 70 MW of new capacity in the first three quarters of 2013, the most stagnant growth in recent industry history, according to the American Wind Energy Association.

In a report released Thursday, AWEA said the industry installed 68.3 MW of new wind capacity in the third quarter after installing 1.6 MW in Q1 and no new capacity in Q2. There are 60,078 MW of installed capacity in the US, according to the report.

This limited increase is particularly jarring when compared with 2012, when wind power became the leading source of new US electricity generation capacity and accounted for 43% of all new electric additions and roughly $25 billion in US investments, according to the Energy Department.

Wind capacity growth so far this year has been the slowest since the industry started tracking capacity in 2005, according to Elizabeth Salerno, AWEA’s director of industry data and analysis.

While analysts have blamed stagnant wind industry growth, at least partly, on the low cost of natural gas, threats to state renewable portfolio standards and turbine and other related technology costs, AWEA officials said Thursday the blame rests entirely with uncertainty over the federal production tax credit.

“The uncertainty is hugely problematic. People are exhausted by the boom and the bust,” Tom Kiernan, AWEA’s CEO, told reporters Thursday.

“If you’re trying to negotiate with a utility and you don’t know if this PTC is going to be there or not, the risk alone … can halt negotiations,” Salerno said. “We delayed six or nine months of investments for really no good reason.”

The industry was paralyzed for months by uncertainty over the PTC, which expired at the end of 2012, Kiernan said.

The fiscal deal the Senate and House approved early this year included a one-year extension of a 2.3-cent/kWh PTC for wind, as well as an extension of the PTC for geothermal and closed-loop biomass. The PTC included new language under which wind projects can qualify for the PTC as long as construction begins in 2013. Previously, projects only qualified if they were placed into service during a given calendar year.

Kiernan said he expects the PTC will be addressed when Congress takes up a long-awaited tax-reform effort. A source lobbying against renewal of the PTC said this week the PTC will definitely not be renewed this year due to a lack of “must pass” legislation Congress will take up before the end of the year.

There are more than 2,300 MW of wind projects under construction in the US which are expected to qualify for the PTC this year, according to AWEA, including about 540 MW under construction in Texas, according to AWEA’s new report. At least 1,650 MW of these projects under construction have long-term power offtake agreements in place through long-term power purchase agreements or direct utility ownership, AWEA said.