Expired PTC Didn’t Keep Wind Down

Though there wasn’t a production tax credit for wind installation in 2004, the American Wind Energy Association (AWEA) reports that over 20 new wind energy projects were completed last year. The U.S. wind energy industry added 389 MW of new generating equipment to the nationwide fleet, or enough to serve more than 100,000 average homes, according to AWEA.

Total new additions were down sharply from the highs in the boom years of 2001, 1,696 MW, and 2003, 1,687 MW. But at year’s end, the trade group said, utility-scale wind installations in 30 states across the country totaled 6,740 MW, enough to serve more than 1.6 million households. The small but burgeoning industry is hard at work planning projects that should make 2005 a record year in terms of new wind generating capability in the U.S. According to AWEA, over 2,000 MW of new wind power capacity is likely to be added during the coming year, or enough to power more than 540,000 homes. The most recent extension of the federal wind energy production tax credit (PTC) by Congress in October, 2004, teed up 2005 for an impressive growth spurt, which should bring economic development activity in rural areas, more diversity to the nation’s generating mix to reduce fuel price volatility, and clear environmental benefits to a nation that continues to demand new electricity sources. AWEA executive director Randall Swisher said the association will continue to push for a multi-year extension of the existing PTC. Under current law, the credit will expire at the end of 2005, which could slow the industry again. “The short-term duration of the federal production tax credit (PTC) and its repeated expirations – three in the past six years – are keeping this industry from reaching its potential to supply the nation with clean, domestic electricity,” Swisher said. Highlights of the current wind energy market outlook, according to AWEA, include: – Wind farms already in place and those that will be installed by the end of 2005 could save over half a billion cubic feet (Bcf) of natural gas per day in 2006. Using conservative growth estimates of 3,000 MW installed every two years for the next four years, the U.S. could top 15,000 MW of installed wind power capacity by the end of 2009, which would save nearly 0.9 Bcf per day by the end of this decade. Natural gas shortages and price volatility have become an increasingly familiar part of the national energy scene over the past few years. – In 2004, seven states plus the District of Columbia passed renewable portfolio standard (RPS) legislation requiring utilities to provide a certain minimum amount of power from renewable sources such as wind and solar, bringing the total to eighteen states and the District. The citizens of Colorado made it the first state to pass an RPS by popular referendum, endorsing a measure under which Colorado’s top utilities must obtain 10 percent of the state’s power needs from renewables by 2015. – Wind power continues to attract global power companies. In September, international power plant developer AES Corp. announced its first step into the U.S. wind market, an equity investment in US Wind Force. AES also announced on January 11 that it plans to follow that investment up with the purchase of SeaWest Holdings, a large West-coast wind project developer. The main reason cited for the SeaWest deal was that the company sees strong potential in wind as a new and expanding source of electricity. Global power generation giant Siemens announced in October that it would purchase wind turbine manufacturer Bonus Energy A/S. The company said it decided to become a wind turbine manufacturer to merge Bonus’s well-regarded technology with Siemens’ experience with large-scale utility projects. – More than 500 utilities in 34 states now offer green pricing programs, according to the National Renewable Energy Laboratory (NREL), and over 1,500 MW of wind power are currently serving the green power market. – Project announcements for 2005 are rolling in. Four of the top five largest projects announced for construction this year are 200 MW or larger, including the 240-MW Flat Rock Phase I project in New York, the 220-MW Wild Horse project in Washington, the 200-MW Forward Wind Power project in Wisconsin, and the 200-MW Fenton project in Minnesota. A state-by-state listing of existing and proposed wind energy projects is available on AWEA’s Web site.


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