Project Development, Wind Power

Rough Year for Wind

U.S. wind installations dropped 71% in the second quarter of this year compared to 2009, according to new figures released by the American Wind Energy Association (AWEA). The numbers point to a trend that has been increasingly apparent: With a poor economy and an unstable policy environment, many wind developers and manufacturers are struggling.

AWEA reports that total installed capacity was about 700 MW in Q2.

The organization points to the lack of a long-term national renewable energy requirement as the single biggest obstacle in front of the industry. That is certainly a major problem. But lower demand for power and decreasing natural gas prices have also been key factors in slowing the development of projects.

AWEA officials are calling for a renewable energy standard, which could again increase demand for wind electricity.

“Strong federal policy supporting the U.S. wind energy industry has never been more important,” said AWEA CEO Denise Bode.

Many advocacy groups fear that time is running out to pass legislation focused on renewables. With the prospects for a comprehensive cap and trade bill all but dead, the industry is hoping that simple steps like an extension of the grant program or the creation of a renewable energy standard can be taken before election season this fall. Congress’ poor historical record on renewables-related support makes those slim possibilities as well.

Here are some second quarter highlights as reported by AWEA:

  • First half of year status: The 700 MW installed bring the first half of 2010 to 1,239 MW, 57% and 71% below 2008 and 2009 levels, respectively.
  • 2010 projection: Even with over 5,500 MW under construction and a more active second half of year in store, AWEA projects that 2010 installations will likely be 25-45% below 2009 installations, depending on policy developments.
  • Beyond 2010: There is a dramatic drop in the project development pipeline after the 5,500 MW under construction—that is, there is no demand beyond the present “coasting momentum.”
  • Manufacturing: While wind turbine orders saw a slight uptick in 2Q, mostly for 2010 delivery, the order level continues to be below what is needed to drive more manufacturing. New wind turbine manufacturing facility openings dropped from 2008 and 2009 levels, with only two new manufacturing facilities coming online in the first half of 2010, compared to seven in 2008 and five in 2009.

While many in the industry predicted such a downturn, these statistics are certainly sobering. You can check out the full report here.