The U.S. wind energy industry saw 35 percent average annual growth over the last five years and accounted for 35 percent of new U.S. power capacity in that period, according to the 2010 U.S. Wind Industry Annual Market Report. Its only rival in growth and new capacity has been natural gas. So either natural gas is alternative energy -- or wind isn’t.
The report from the American Wind Energy Association (AWEA) describes a power source that has become integral in the U.S. energy supply -- one that AWEA CEO Denise Bode calls “not a silver bullet, but part of the silver buckshot that is the answer to America’s energy needs.”
Wind equated to fifteen percent of Iowa's electricity in 2010, twelve percent of Minnesota’s, and ten percent of South Dakota’s. It stands to reason that states with such brutal winters and sultry summers would not depend on an 'alternative' form of energy. By the end of 2010, wind was 2.3 percent of U.S. electricity, up from 1.8 percent a year ago.
Wind’s seven cents per kilowatt-hour rule-of-thumb power price is mainstream and, according to Elizabeth Salerno, AWEA’s Director of Data and Analysis, recent power purchase agreements in some U.S. regions have been signed at five and six cents, prices that push volatile natural gas, dirty coal and nuclear.
Having added 5,116 new megawatts in 2010, a fifteen percent year-on-year increase over 2009, the U.S. installed wind capacity stood at 40,180 megawatts at year-end, ranking it second in the world behind China (42.3 gigawatts) and ahead of Germany (27.2 gigawatts), Spain (20.7 gigawatts) and India (13.1 gigawatts). The same five countries were the world leaders in new capacity last year, with the U.S. again at number two.
Texas remained, in 2010, both the U.S. leader in cumulative capacity and new capacity. It last year became the first state to pass 10,000 megawatts of cumulative capacity and is far ahead of number two Iowa (3,675 megawatts). On the other hand, its transmission congestion clearly slowed its growth. Its 680 megawatts of new capacity last year was not far ahead of Illinois (498 megawatts), California (455), South Dakota (396), and Minnesota (396).
NextEra Energy Resources finished 2010 as by far the biggest wind power capacity owner, with 8,077 megawatts under management. Iberdrola Renewables was its closest competitor, with 4,301 megawatts. The other top wind owners were Horizon-EDPR (3,141 megawatts), MidAmerican & PacificCorp (2,316), and E.ON Climate and Renewables (1,920).
Among owners of added capacity, Iberdrola Renewables (1,074 megawatts) was easily the most successful in terms of acquisitions, ranking far ahead of NextEra Energy Resources (603 megawatts) for the year. Horizon-EDPR (499) was again third, but Terra-Gen Power (300) and Duke Energy (251) made the top five added capacity list. This was in part a reflection of transmission access.
Some 275,000 megawatts of potential new wind power remain in transmission system operators’ interconnection queues. Although still a significant impediment to development, this represents an improvement over 2009, when 296,000 megawatts awaited interconnection. The improvement is attributable partially to some system operators’ streamlined procedures and partially to slowed wind industry growth.
Eleven new transmission projects across the country are underway and scheduled for completion over the next three years. Their completion should liberate 29,000 megawatts from the queue. The biggest, by far, is the Texas Competitive Renewable Energy Zones (CREZ) initiative, expected to bring 9,859 megawatts of new capacity on-line by 2013. The next biggest transmission initiative is California’s Tehacaphi transmission line, which will add 4,500 megawatts of capacity by 2013. Such achievements come from those states' commitment to getting transmission built and are driven by their renewable energy standards.
With growth in 2010 slower than 2009, the wind industry’s final direct and indirect jobs figure fell by 10,000 to number 75,000. AWEA Senior Policy Analyst Jessica Isaacs characterized the lost jobs as being largely concentrated in construction, asserting that they are “jobs we can easily bring back” when the industry is able to restore robust growth.
Though no offshore wind was in service at the end of 2010, thirteen projects were in some stage of development.
Led by GE’s 60% share, the U.S. wind industry built 2,900 turbines in 2010 to bring the nation’s total to 35,600 turbines. Though new projects often use 2.5 megawatt or larger turbines, the average turbine size remains 1.7 megawatts, because half of all new turbines are the GE 1.5/1.6 megawatt machine.
The U.S. added 14 new manufacturing facilities in 2010, bringing its total to 400, spread across 44 states. The U.S. now has 22 tower manufacturing plants, 11 blade plants and 12 nacelle plants, but the most common type of facility is one that has shifted from traditional manufacturing to the making of wind components.
The most common new type of wind manufacturer makes power transmissions, an essential nacelle component that requires a broad array of manufactured parts and therefore drives domestic supply chain manufacturing. Fifty percent of U.S. turbine components were sourced domestically in 2010, up from 25 percent in 2005. Many manufacturers and developers are now targeting 80 percent or 90 percent domestic content.
A total of $11.1 billion in debt and tax equity deals closed in 2010. There were 20 tax equity projects representing $2.7 billion, and 17 of the 20 used the 1603 cash grant option. There were 29 debt capital deals worth $8.4 billion. Federal loan guarantees supported two projects.
That’s a lot of money, manufacturing activity and jobs spawned by investors and lenders. If it’s for an alternative form of energy, they must think it’s a pretty good alternative.
Tags: 1603 cash grant option, 2010 u.s. wind industry annual market report, america’s energy needs, american wind energy association, average annual growth, awea, blade plants, california, china, coal, crez, debt and tax equity deals, debt capital deals, denise bode, duke energy