US Leads in Wind Power Production, But Policy Uncertainty Weighs on Industry

U.S. wind farms now generate more electricity than those in any other nation in the world and are on track to expand by over 45% this year, but the looming expiration of the federal production tax credit (PTC) less than five months from now threatens this spectacular progress, AWEA said in its second quarter market report.

While Germany still has more generating capacity installed — about 23,000 megawatts (MW) — the U.S. is producing more electricity from wind because of its much stronger winds, making it the world leader in wind electricity generation.

“The U.S. is now the world’s largest wind energy producer, with wind development sparking job creation and economic opportunity in a troubled economy,” said AWEA Executive Director Randall Swisher. “But the current figures hide a dire reality: the pipeline of investment for 2009 has been on hold for months, with escalating risks and costs for the industry, because of the uncertainty about the production tax credit. At a time when unemployment is at a four-year high and the economy needs every stimulus it can get, a rapid extension of the credit should be on any economic priority list for Congress.”

Total U.S. installed wind power capacity now stands at 19,549 MW. The industry installed 1,194 MW in the second quarter, down from 1,532 MW during the first. This brings the year’s new capacity to 2,725 MW, more than was installed in any year except 2007. More is under construction for completion either by the end of this year or the beginning of next year, depending on when the PTC is extended. Uncertainty regarding the PTC is causing a rush to complete projects by the end of the year, with increased risks and costs for the industry and eventually for customers, AWEA said. Under the best-case scenario for the industry, Congress will move quickly in September to extend the credit, which would ease the pressure for immediate project completion and reopen the pipeline for 2009. Under that scenario, AWEA projects at least 7,500 MW of new capacity to be added in 2008.

AWEA also reports a strong increase in domestic investment in wind turbine and wind turbine component manufacturing facilities over the past year and a half. At least 41 facilities have been announced, opened or expanded over that period of time. Those facilities are expected to create over 9,000 jobs when they are at full capacity, although uncertainty about the PTC threatens that level of investment as well.

“It’s clear that wind power is not only a major technology with which to fight climate change, but also one of the most promising and dynamic economic engines we have today,” said Swisher.

“The nation needs an ambitious plan to promote the deployment of wind and other renewable energy technologies — and the urgent first step it must take is to rapidly extend the expiring renewable energy credits, which are the primary incentive that the nation provides for these technologies today.”

Christine Real de Azua is assistant director of communications with the American Wind Energy Association (AWEA).

This article first appeared in Wind Energy Weekly, and was republished with permission from the American Wind Energy Association.

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