2012 sets record pace, but layoffs could hit supply chain amid policy uncertainty for 2013

GLOBE-Net, August 13, 2012 - American wind power has blown through an historic milestone: 50 gigawatts of electric generating capacity according to a report released last week by the American Wind Energy Association. The report comes just weeks before the U.S. Congress decides on whether to extend a Production Tax Credit  that has been a key factor in the growth of wind power in the United States.

The 50 gigawatts (GW) online today means that U.S. wind turbines now power the equivalent of nearly 13 million American homes, or as many as in Nevada, Colorado, Wisconsin, Virginia, Alabama, and Connecticut combined. According to the Association 50 gigawatts (GW) of wind power capacity: 

• Represents the generating power of 44 coal-fired power plants, or 11 nuclear power plants.
• Avoids emitting as much carbon dioxide as taking 14 million cars off the road.
• Conserves 30 billion gallons of water a year compared to thermal electric generation, since wind energy uses virtually no water.

For an infographic on what 50 gigawatts looks like, see www.powerofwind.com. (By comparison Canada is now the ninth largest producer of wind energy in the world with current installed capacity at 5,403 MW - representing about 2.3 per cent of Canada's total electricity demand.)

"These truly are the best of times and could be the worst of times for American wind power," said Denise Bode, CEO of the American Wind Energy Association. "This month we shattered the 50-gigawatt mark, and we're on pace for one of our best years ever in terms of megawatts installed. But because of the uncertainty surrounding the extension of the Production Tax Credit, incoming orders are grinding to a halt.

"Layoffs have begun up and down our American manufacturing supply chain, which the industry has so proudly has built up in support of the U.S. economy and made-in-the USA manufacturing. And when incoming orders stop, so do factories. Congress must act now to give wind energy a stable business environment to keep producing all this homegrown power, and save 37,000 American jobs by the first quarter of next year," Bode said.

"This milestone for wind-energy production marks continued success for this clean, renewable and domestically produced energy source," said Sen. Chuck Grassley (R-IA), father of the Production Tax Credit that has helped Iowa become the state with the second most wind power in the nation. "Wind energy has exceeded expectations since I first authored the tax incentive, in 1992, and offers an ideal for expanded production and use of alternative energy sources in the future."

Among the projects that contributed to crossing the threshold of 50 gigawatts (equal to 50,000 megawatts) are projects newly connected to the power grid in Nevada, Oklahoma, Idaho, California, Hawaii and Iowa. Featuring turbines made by General Electric, REpower, Siemens and Vestas, they include:

• Pattern Energy's Spring Valley wind farm, 30 miles east of Ely, Nevada (151.8 megawatts, or MW)

• Enel Green Power North America's Rocky Ridge wind farm in Oklahoma (148.8 MW)
   
• enXco's Pacific Wind project in Kern County, California (140 MW)
   
• Utah Associated Municipal Power's Horse Butte project in Idaho (57.6 MW)
   
• First Wind's Kaheawa Wind II wind farm in Hawaii (21 MW)

Utility-scale wind farms are now located in 39 states, increasing the economic as well as environmental benefits around the country. "We're very proud that Spring Valley Wind is not only Nevada's first wind power facility but also helps America reach 50 gigawatts of clean wind generation," said Mike Garland, CEO of Pattern Energy.

"Spring Valley Wind brought over 250 jobs to Nevada and will now power up to 45,000 local homes with zero emissions. This project will also generate significant tax revenue and community benefits for decades to come, demonstrating that wind energy is a meaningful long-term investment in the economic health of local communities."

A series of community wind projects in Iowa also contributed to reaching the goal:

• AG Land 5 and 6 (3.2 MW)
• Cumberland Rose Wind Energy (1.6 MW)
• Forward Fontanelle Power (1.6 MW)
• Greenfield Wind Power (1.6 MW)
• Meadow Ridge Wind Energy (1.6 MW)
• Sky Volt (1.6 MW)

Industry's growth has been geometric

Both American wind development and the capacity of a typical turbine have taken off in recent years. Although utility-scale wind generation dates to the early 1980s, it took 23 years to reach 5 GW of U.S. generating capacity (from1981 to 2003).

American wind power reached 10 GW in 2006, 25 GW in 2008, and now has doubled that in just four more years. The last time a new energy technology ramped up to 50 GW was nuclear, in the late 1970s and early 1980s - since then, no new energy technology has been as successful as wind.

With the growth of capacity has come higher domestic content in U.S.-deployed wind turbines, which surged from 25 percent U.S.-made in 2005 to over 60 percent today, with a steadily increasing number of factories joining the supply chain here. Today, 500 U.S. factories provide wind power components.

Jobs and continued growth depend on stable policies

Driving this expansion has been relative policy stability starting in 2005, when President Bush and Congress extended the wind energy Production Tax Credit (PTC). With subsequent extensions, the PTC has not expired since, but is scheduled to do so at the end of the year. That has caused the industry's manufacturing supply chain to already start dramatically slowing down, given the 18-month project development cycle under which the industry operates.

Bumper crop seen in 2012, amid uncertainty over 2013

News of the 50-gigawatt milestone comes just as AWEA released numbers for the second quarter that show an industry blazing forward in 2012 despite the policy uncertainty that has 2013 installations in doubt. American wind power installed enough new wind turbines just in April through June 2012 to power the equivalent of 330,000 average American households.

The new installations boosted the industry's total for the year to 1,400 turbines and over 2,800 MW to date, sufficient to power 840,000 homes, and underscored the success of the PTC incentive in creating jobs and helping the industry attract over $15 billion a year of private investment in new wind farms.

AWEA reports more than 10,000 MW of wind farms were under construction at the quarter's end, an all-time record, with over 100 MW under construction in 21 states - headed by Texas, Kansas, California, Oklahoma and Iowa. The blistering pace of new construction results from wind farm developers' racing to finish work before the scheduled Dec. 31 expiration of the PTC, unless Congress acts to extend it.