The U.S. Department of Energy's (DOE) latest annual report for wind power depicts an energy source being threatened by policy uncertainty — yet one that is now conventional, driven by the continuing trends of downward prices and more of the technology's components being made in America.
The DOE Wind Technologies Market Report for 2011 generally tracks with the numbers of AWEA’s Annual Market Report released in the spring. The government report also provides information on such areas as domestic content for wind turbines and the overall cost of wind energy.
Facing looming policy uncertainty beyond 2012, when the wind energy Production Tax Credit is slated to expire, the U.S. remained one of the fastest-growing wind power markets in the world in 2011 — second only to China — according to the report, which was prepared by Lawrence Berkeley National Laboratory. Over 6,800 MW of new wind power capacity were connected to the U.S. grid in 2011. Also tracking with AWEA’s analyses, new wind power installations are widely expected to be substantially higher in 2012 than in 2011.
But the report’s most intriguing numbers, perhaps, don’t involve megawatts. In spite of the PTC uncertainty wreaking havoc on the supply chain, turbine manufacturers continued to move their sourcing activities to the U.S. last year, with 67 percent of the equipment used in U.S. wind power projects now sourced domestically, up a strong 7 percent from the 60 percent threshold hit the previous year and nearly doubling the 35 percent number reported for 2005-2006. That trend is not surprising when considering the 500 U.S. factories now serving the wind industry, as reported in the AWEA report. However, noted Ryan Wiser, staff scientist at Berkeley Lab and co-author of the report, “[B]ehind these positive headline numbers, the domestic wind industry supply chain is currently facing severe pressure, due to uncertain prospects after 2012.”
That uncertainty is the result of the pending expiration of the PTC. AWEA and the wind energy industry are working full-force to ensure an extension to wind energy’s primary policy driver.
The DOE report noted wind power’s stature as a “credible” source of new generation, comprising about a third of all new U.S. electric capacity additions in 2011, according to the report. During the last five years wind power’s contribution has been 35 percent. Last year’s installations represented $14 billion in new investment, according to the report, which also noted that wind power currently contributes more than 10 percent of total electricity generation in six states (with two of these states above 20 percent), and now provides more than 3 percent of total U.S. electricity supply.
The DOE report, which is available online, also highlighted lower wind turbine prices as well as PPA prices.
This article was originally published in AWEA's Wind Energy Weekly and was republished with permission.
Lead image: Wind turbine assembly via Shutterstock
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