Discussions are progressing on Capitol Hill about additional support for renewable energy, AWEA chief executive Tom Kiernan said.
The U.S. has surpassed 100 gigawatts of wind capacity, a momentous milestone that comes as the industry girds its loins for a post-subsidy world.
It was the largest third quarter on record for the U.S. wind market, according to the American Wind Energy Association, a performance powered in large part by the ongoing and dramatic onshore wind boom in Texas.
The U.S. becomes only the second country in the world with 100 gigawatts of wind capacity, following China. More than a quarter of that capacity is in Texas.
NextEra Energy is the largest owner of U.S. wind capacity, followed by Berkshire Hathaway Energy, Avangrid and EDP, according to AWEA.
The American wind market faces a number of major challenges in the years ahead, including the expiration of its longstanding bedrock subsidy, the Production Tax Credit; fierce competition from natural gas and solar; and severe transmission congestion in key development regions.
Still, the market is set for some huge years ahead. It took the U.S. 35 years to cross the 100-gigawatt mark, but it’s realistic to think the next 100 gigawatts could come online within a decade, a growing portion of it offshore, said John Hensley, AWEA’s vice president for research and analysis.
In its latest North America Wind Power Outlook, Wood Mackenzie forecasts around 85 gigawatts of new U.S. wind capacity from 2019-2028. That would mean the coming decade would see more wind farms built than in the previous decade.
While a substantial slowdown looms for the onshore market in the mid-2020s if the PTC is not extended, there’s a record-high 46.5 gigawatts of capacity under construction or in what AWEA considers “advanced development,” meaning the project either has a power-purchase agreement or a turbine contract, or alternately is proceeding under utility ownership.
“Those are projects we expect to come online in the next couple of years,” Hensley said. “So we’re essentially halfway [to that next 100 gigawatts].”
Meanwhile, the offshore market looks set to blossom over the next few years if the industry’s permitting challenges can be ironed out. On Wednesday Massachusetts announced the winner of its second offshore wind tender, awarding an 800-megawatt project to a joint venture of Shell and EDP Renewables.
PTC prognosis
Major lobbying efforts are underway in Washington, D.C. on behalf of the renewables sectors as their main subsidies phase out. The wind industry recently confirmed it will push to become eligible for the solar Investment Tax Credit, which has a more favorable stepdown schedule than wind’s Production Tax Credit.
Despite the current political chaos in D.C., AWEA CEO Tom Kiernan said he sees hope for the passage of a tax extenders package this year that would benefit renewables.
“There are discussions within the Senate Finance Committee — Chairman [Charles] Grassley and ranking member [Ron] Wyden are in some discussion, as we understand it,” Kiernan said.
Grassley, a Republican from Iowa and a longtime champion of wind energy, was reported earlier this year to be cool on the notion of further subsidy extensions, due to his belief that the previous round of extensions would be the last.
“I think things are moving forward,” Kiernan said of the behind-the-scenes talks ongoing in the Republican-controlled Senate. “We anticipate significant further discussions this fall.”
Separately, Kiernan said he was optimistic about efforts to extend tax credits for the offshore wind sector, which is in a much earlier stage of its development than are onshore wind or solar.
There are pro-offshore wind bills in play in the House and Senate, both with bipartisan support, Kiernan noted. “Having talked to some of the sponsors, some in the last couple of weeks, I know they’re looking at any number of vehicles. It could get added to some package; it could get added to an omnibus budget.”
“Obviously, the impeachment inquiry is adding uncertainty,” Kiernan added. “We think there’s a good shot at [an extension of the credits] this year.”
Another big milestone for wind looms: It’s expected to overtake hydro as the largest U.S. source of renewable power this year, with each now generating around 8 percent of the country’s electricity, and wind’s share is growing quickly.
WoodMac expects the annual solar market to be consistently larger than wind from the early 2020s onward, but solar has a ways to go in catching up in actual power generation; the latter currently accounts for about 3 percent of the country’s electricity.
U.S. solar capacity will crack the 100-gigawatt mark sometime around 2021, WoodMac forecasts.
Natural gas overtook coal as the largest U.S. generating source several years ago, and the gap between the two is now cavernous, with gas accounting for about 44 percent of U.S. electricity and coal at around half that level.
Source : greentechmedia
