On days like this – cloudless blue skies above, winds whipping across empty fields – running a modern wind farm seems almost easy.
It’s Friday afternoon, and the half-dozen wind technicians sitting around the control room at Avangrid’s 208MW Amazon Wind Farm North Carolina are more concerned with their weekend plans – beer and basketball figure prominently – than their role in the energy transition.
The wind farm is just a year old, yet already feels such a fixture of the landscape and local economy that one might assume it would be commonplace in this unassuming and jobs-hungry corner of North Carolina.
In fact, there’s nothing like it for hundreds of miles in any direction. And given the way local politics has been moving, that may not change any time soon.
The US wind market is thriving from coast to coast with one striking exception. The Southeast – a vast and varied region that includes coastal Atlantic states such as the Carolinas and Florida; Appalachian states like Kentucky and Tennessee; and the Deep South along the Gulf Coast – has less than 250MW of wind capacity in place, nearly all of it at Avangrid’s project.
It’s a pathetic showing for a 12-state region in the world’s number-two wind market. And it doesn’t have to be this way for Dixie.
There are valid reasons why wind developers have steered clear of the Southeast: a relatively poor wind resource; some of the country’s cheapest and dirtiest electricity; a conservative population not overly concerned with climate change. Yet such reasons are less and less convincing.
Bigger, more efficient turbines have rendered much of the Southeast economically viable for wind development. There’s plenty of cheap land and the population is growing. Once-reluctant utilities like Southern Company and Duke Energy have warmed to renewables.
Yet while many factors are trending in the right direction, industry figures caution that there are serious challenges ahead, not all of them necessarily solvable.
Competition from utility-scale solar is more intense here than in nearly any other part of the country. More worryingly, local politics has become distinctly unfriendly to wind development in some places, and bad ideas can quickly become contagious in American politics.
North Carolina, one of the region’s brightest prospects, stunned the wind industry last year by passing an 18-month moratorium on wind development across the state while simultaneously giving a big boost to solar – a brutally timed blow for wind given the sun-setting production tax credit (PTC).
Even more extraordinary, a handful of Republican state lawmakers publicly pleaded with the incoming Trump administration to kill Avangrid’s $400m project when it was just weeks from completion, all of the turbines already installed – a request so outlandish that it fell on deaf ears even at the current White House.
The Southeast is the last virgin wind market in the contiguous US. Yet even today the industry looks at the region with equal parts hope and hesitation.
“The Southeast is not blessed with the same wind resource as the Midwest, but there are places where the resource is adequate,” says Craig Poff, business development director at Avangrid Renewables, the country’s third-largest wind owner.
“With the advances in turbine technology, I think the Southeast holds a lot of promise,” he tells Recharge.
“But I have to temper that optimism with the signals being sent by various states. In 2007, the signal was positive. In 2018, and in North Carolina in particular, the signal is just the opposite.”
If anything has changed the conversation about the Southeast for the positive, it’s the advent of bigger turbines. At 80 metres off the ground, the region’s wind is pretty poor in many places, but things quickly get interesting as you push higher.
Avangrid’s North Carolina wind farm, for example, uses turbines with hub heights and rotor diameters of 93 and 114 metres respectively, compared to national averages of 83 and 108 metres in 2016, the year the project was constructed.
Even in the renewables sector, many people have not yet grasped that modern turbines can profitably unlock the Southeast’s wind resource, says Kevin Siwik, director of regional sales for GE Renewable Energy. “I can tell you, the turbines are here – they’re available,” he told a recent industry conference in Atlanta.
Building wind farms in virgin markets is often a logistical nightmare, but it’s a piece of cake in the Southeast thanks to low labour costs and an excellent transportation network, including abundant access to ports for imported parts.
Those same factors have drawn a substantial portion of the US wind supply chain to the Southeast in spite of the lack of a local wind market. GE’s largest US wind factory is in Pensacola, Florida, and LM Wind Power has a huge blade plant in Arkansas – despite there not being a single turbine installed in either state.
One of the biggest immediate stumbling blocks for the Southeast is simply a lack of projects in development, Siwik says.
There are a few major wind developers quietly beavering away in the region, including Apex Clean Energy and RES Americas. But GE can count no more than 1.5GW of projects in development across the region. “That’s a pittance compared to other markets,” Siwik says. “The technology has moved faster than project development.”
Another reason for hope is the region’s utilities.
The American South is known for its conservatism, and that old-fashioned mindset extends to its electricity utilities and their regulators. North Carolina-based Duke Energy and Georgia-based Southern Company, two giants of the US utility sector with a combined market value of nearly $100bn, remain disturbingly reliant on fossil fuels and nuclear energy for their regulated utility businesses.
Duke has a 50GW generation portfolio, but in 2017 just 1% of the power for its regulated utility businesses came from renewables. Compare that to Iowa-based MidAmerican Energy, which last year got 37% of its electricity from wind, and is only at the beginning of its $3.6bn, 2GW Wind XI expansion programme.
But change is finally coming to the Southeast. Duke and Southern have both become national renewables leaders through their quicker-moving unregulated generation businesses, which sell into various wholesale markets outside the Southeast – and their appreciation for renewables is trickling back to the traditional utilities.
Just weeks after North Carolina’s moratorium went into effect, Duke issued its first-ever wind-power request for proposals (RFP) for its Carolinas utility, looking for 500MW – either remotely or locally sited.
Georgia Power, Southern Company’s largest subsidiary, sources virtually all of its electricity today from gas, coal and nuclear, but it’s in the process of procuring 1.2GW of large-scale renewables over the next few years. First Solar won a recent RFP and is now building a 200MW PV array, which is the largest solar project in the Southeast.
“This department didn’t exist three or four years ago,” says Wilson Mallard, head of Georgia Power’s renewables development unit. “Now we’re 27-people strong. I think that’s emblematic of the growth of renewables here in the Southeast.”
There’s little doubt that in the coming years more of the Southeast’s electricity will come from wind. What’s not clear is how much of it will be generated locally versus being “wheeled in” on transmission lines from lower-cost wind farms in the central US.
The only wind Georgia Power buys today comes from a 250MW off-take deal with an EDP Renewables project in Oklahoma, nearly 1,000 miles (1,600km) to the west. But transmission bottlenecks may make such deals less attractive in the future.
The recent struggles of high-profile transmission projects such as Clean Line Energy Partners’ Plains & Eastern, which has sought to bring Oklahoma wind power to the Southeast via a 700-mile high-voltage direct-line, could encourage developers to take a fresh look at siting projects closer to Southern population centres.
It’s noteworthy that Georgia Power has taken the step of installing LiDAR units in multiple locations across the Peach State to better study the local resource. “Longer-term, we definitely see local and regional wind playing a bigger and bigger role in Georgia and the Southeast,” Mallard says.
Solar and politics
By far the most obvious challenge for wind in the Southeast is solar energy. Solar only began taking off in the region a few years ago, with North Carolina leading the charge, but it’s soared beyond anyone’s expectations.
Aside from the desert Southwest, there’s nowhere in the US where solar has such a commanding lead over wind today, and it’s hard to imagine that gap closing in the sunny Southeast.
“The price of solar power is probably wind’s biggest hurdle in the Southeast,” says Katharine Kollins, president of the Southeastern Wind Coalition, whose members include developers, manufacturers and utilities.
North Carolina’s lone wind farm stands alongside more than 4GW of installed PV capacity in the state, making it the number-two solar market in the country, trailing only global pacesetter California. Florida, Georgia and South Carolina all have large solar markets, and other states like Alabama are up and coming.
Florida-based NextEra is a renewables giant of global proportions, with 16GW of wind and solar on its books today and at least 10GW more expected to come on line by the time the wind PTC and solar investment tax credit expire.
Yet NextEra does not own a single wind farm in its home state. The reason? The wind resource is simply too bad. Taller towers and longer blades will unlock many parts of the Southeast for wind development in the years ahead, but no one – even NextEra – is holding their breath for the Sunshine State.
Solar, however, is another story. Florida’s solar market surged in 2017, climbing to the number three spot among US states. And in March, NextEra announced a landmark deal with China’s JinkoSolar, the world’s largest maker of PV modules, to buy 2.8GW of modules from Jinko over the next four years, with Jinko opening its first US factory in Jacksonville, Florida.
The announcement will be seen by some as vindication for solar tariffs recently imposed by the Trump administration on all imports into the US.
Solar’s rapid entrenchment within the Southeast’s energy economy has helped safeguard it against what might be the most acute threat to wind in the region: local politics.
The wind industry has been baffled by the rise of resistance among Republican state legislators just as the industry was poised to begin delivering a gusher of investment and recurrent tax revenues into rural areas. The Amazon wind farm alone brings in more than $1m a year in local taxes and lease payments to landowners.
Yet North Carolina is the brightest flashpoint. Republican lawmakers here couch their opposition to wind in concerns about the impact on the military, an important source of local jobs. But such arguments plainly don’t hold water: the military itself insists there’s no problem and remains openly supportive of renewables.
“The wind industry, the vast majority, is excellent to work with,” says Ronald Tickle, executive director of the Department of Defense’s (DOD) siting clearing house, which evaluates energy projects for any impact on military operations. “And typically we’re not the problem for the wind industry,” he told the Atlanta conference.
In the past four years, the DOD’s siting clearing house has evaluated more than 3,000 proposed wind turbines across the country, and just a “small percentage” were seen to have any impact on the military, Tickle says.
When potential conflicts do arise, the military engages with developers to find a solution: sometimes turbines need to be sited a little differently or portions of a project scrapped; other times developers are asked to pay for upgrades to military equipment to mitigate the impact of their project. Fleetingly rare are the instances where the military has moved to block a wind project full-stop.
Yet North Carolina Republicans remain unpersuaded. In pleading with the Trump administration to block Avangrid’s wind farm, a group of powerful state lawmakers claimed the Pentagon had only approved the project because of a pro-renewables “political correctness” agenda under the Obama administration.
North Carolina’s wind battle underscores an important point for the US market going forward. As the PTC fades and then expires, federal energy policy will take a backseat to local politics – a realm that receives far less scrutiny from the media and even the industry itself.
When Congress threatened last year to undermine the PTC, the US wind industry rose up in uniform resistance, marshalling action from pro-wind Republicans in states like Iowa. But when an individual state with little installed wind adopts bad policies, it attracts far less attention.
When it comes to state politics, “what really matters is how powerful the small minority of anti-wind folks are”, Kollins tells Recharge.
“What happened in North Carolina is you have the Senate majority leader who is extremely anti-wind. He was anti-solar too, but he realised that train’s coming and he can’t do anything about it, so he might as well step out of the way.”
For now, North Carolina’s wind moratorium remains in force until the end of the year. Should things go badly from there, it’s not hard to imagine developers leaving the state altogether.
“As an organisation, we’re spending a lot of time on North Carolina right now,” Kollins says. “Our goal is to make sure the moratorium doesn’t turn into bad wind legislation.”
Looking to the future
So where does this leave the Southeast? The reality is the region will largely miss out on the final boom years of the PTC, a disappointment to developers and their turbine suppliers hoping to expand the US market.
Kollins predicts that only a handful of big projects will make it over the finish line over the next few years – with North Carolina, Arkansas and Virginia the states to watch for progress.
That may not sound like much in the context of the US market, but it’s a leap forward from where the Southeast stands today. And the wind industry has an impressive track record of starting small and building off its own momentum.
And as the horizon extends into the mid-2020s and beyond, offshore wind could become a factor in the Southeast.
Denmark’s Ørsted is working with Virginia-based utility Dominion Energy to build the first pilot offshore wind project in the mid-Atlantic region. A year ago Avangrid paid $9m for the development rights to a 122,000-acre (500sq km) zone off North Carolina.
The Southeast holds advantages for offshore wind, like the longer construction seasons that come with its fair weather. But even Avangrid insists that first things must come first.
“Certainly offshore is going to get here eventually in the Southeast,” Poff says. “But there’s a lot of good resource onshore that needs to be harvested first.”
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