Baseload, Geothermal, Project Development, Wind Power

US Named Global Leader in Wind Production as Industry Fights for Tax Credit Extension

While China boasts the most installed wind capacity, the U.S. can now push that statement aside and claim the throne for what arguably matters most — wind energy production. According to a new report from the American Wind Energy Association (AWEA), the U.S. is now the global leader in wind energy production, and has been since 2008. While China has 50 percent more installed wind energy capacity, U.S. wind delivers 20 percent more electricity to the grid.

 

Though this is certainly a feather in America’s cap, author of the report and vice chairman of EDF Renewable Energy Dr. James Walker emphasizes that this is a prime indicator of the successful methods the U.S. used to get here, namely the production tax credit (PTC).

“The way we got here over the past 15 years is uniquely American…What gets rewarded gets done,” said Walker. “Federal incentives are organized this way — the PTC is based on production of wind energy, not just installed capacity.”

With nearly 100 GW of installed capacity as of early 2014, several factors have led to China’s current production shortfalls. The country is currently dealing with technology quality and transmission issues. Its turbines have quite low capacity factors, which average from 15 to 16 percent compared the U.S.’ 30 percent average, according to AWEA. Add on to that, the fact that most of China’s best wind resources are a good distance away from major population centers causing transmission delays, and you’ve got major production delays. In fact, 11 percent of its wind capacity sat idle in 2013.

However, a major cause of these issues is its incentive focus. Rather than incentivize production, China focuses its efforts on construction and installation. This has led its boom in construction and bust in production.

The U.S. production dominance is now a new weapon in the fight for a PTC extension. Though the PTC expired on December 31st, 2013, the industry is fighting to retroactively extend the credit through 2015 with the EXPIRE Act, a bill that looks to extend nearly 60 tax provisions pending in the U.S. Senate. AWEA CEO Tom Kiernan said the industry is well positioned and that he looks forward to Congress moving towards tax extension progress. Geothermal Energy Association Executive Director Karl Gawell also recently stated his optimism for the package to pass.

“The PTC is a successful policy because it is based on production,” said Kiernan. “It enables us to be the number one producer of wind energy in the world. This is an exciting demonstration of wind and the importance of extending the incentive through 2015.”

Despite its production issues, China is still on track to install more than 20 GW of wind power capacity in 2014 and likely keep that pace through 2015 before its incentives expire. In comparison, the U.S. is expected to install 13.6 GW through 2015, “with turbines that have capacity factors above 50 percent,” said Emily Williams, AWEA’s manager of industry data and analysis. Texas leads the states with 8 GW currently under construction, with Iowa and California trailing behind.

“There is now strong construction activity with very productive turbines,” said Williams. “We have some of the best infrastructure in the world that is being installed across the country now and it will benefit the U.S. in years to come.”

Lead image: U.S. flag wind turbines via Shutterstock