Tulsa, OK and Nashua, NH — The past year has brought about a boom of wind energy project completions in the U.S. as developers have rushed to take advantage of the Production Tax Credit (PTC). Meanwhile, Latin American and Canada have also seen tremendous growth, signs that wind energy in other parts of the Americas is healthy and growing, despite what may happen near-term in the U.S.
The third quarter of 2012 saw 1.8 GW of wind power capacity installed in the U.S., bringing the first three quarters of 2012 to 4.7 GW, according to the American Wind Energy Association (AWEA). The U.S. wind industry now totals 51.6 GW of cumulative wind capacity through the end of September 2012, spanning 29 states and Puerto Rico. The U.S. Energy Information Administration forecasts wind-powered generation this year will have grown by 16 percent over 2011.
Wind power manufacturing in the U.S. has had its ups and downs this year. Over 470 manufacturing facilities across the U.S. make components for wind turbines, and dedicated wind facilities that manufacture major components such as towers, blades and assembled nacelles can be found in every region. However, many of these manufacturing companies have been forced to reduce their U.S. workforce this year in preparation for the expiring PTC. Vestas, for example, cut nearly 1,500 wind manufacturing jobs at its Colorado facilities.
New project announcements have trickled to a stop as wind developers also fear the expiring tax credit. “The wind energy industry is sort of the poster child of policy instability,” said Rob Gramlich, senior vice president of public policy with AWEA.
Despite a challenging season for wind-centric policy, wind power in the U.S. has seen many breakthroughs over the last year in the area of technology breakthroughs.
“The new technologies for lower wind speed turbines can be deployed in states not typically thought of as great wind resource states,” Gramlich said. “Our developments have been strong in surprising places.”
GE also released a wind turbine product this year that has the potential to change blade design by integrating fabric into the design. GE is partnering with the Virginia Polytechnic Institute & State University (Virginia Tech) and the National Renewable Energy Laboratory (NREL) on a $5.6 million Department of Energy Advanced Research Projects Agency endeavor, which will span three years. According to GE, this new blade design could reduce blade costs 25 to 40 percent.
In Canada, several large wind projects came online in 2012, including the Gros-Morne II wind project in the Gaspesie region of Quebec. Gros-Morne I and II combined is one of the largest wind farms in Canada with a total output of 211.5 MW, adding to the almost 1.2 GW of wind power that the Canadian Wind Energy Association expects to have been completed in 2012 alone. Over 60 percent of the new wind capacity in Canada has been installed in Quebec, according to CanWEA. By the end of this year, Canada should have roughly 6.4 GW of wind energy capacity.
This year was also a great year for wind power in Latin America. The largest project in the region came on line this year, the 306-MW Acciona-owned Oaxaca project in Mexico. This catapulted Mexico over the 1 GW of wind energy installed mark, according to the Global Wind Energy Council (GWEC).
Brazil has also experienced continual growth, installing a number of new wind projects and now home to 11 manufacturing facilities. A twelfth facility for GE with a price tag of $35 million is being constructed in the northeastern state of Bahia and is expected to be completed in 2013.
Final figures for the entire year in terms of total installed wind power capacity won’t be available until further into 2013 but data from the World Wind Energy Association (WWEA) show that top markets include China, Germany, Spain and India, as well as the U.S.
Most of the European markets showed stronger growth in the first half of 2012 than in same period of the previous year. The top markets in Europe continue to be Germany, which installed 941 MW in the first half of and a total of 30 GW; Spain, which added 414 MW in the 1H2012 and has a total installed capacity of 22 GW; Italy, which added 490 MW in 1H2012 and has a total installed capacity of 7.2 GW; France, which installed 650 MW in 1H2012 and has a total installed capacity of 7.18 GW; the United Kingdom, which installed 822 MW in 1H2012 and has a total installed capacity of 6.48 GW; and Portugal, which installed 19 MW and has a total installed capacity of 4.9 GW. All these markets, except for Spain and Portugal, showed an increase in their new installed capacity compared to the first half of 2011.
In addition, the emerging markets in Eastern Europe are among the most dynamic markets, said WWEA. Romania showed a 33 percent growth, installing 274 MW of wind energy in the first half of 2012 and at least 600 MW in the second half (more on that below). Poland grew 32 percent, adding 527 MW of installed capacity as of April 2012. The Ukraine grew at an astonishing 64 percent adding 37 MW of capacity and Latvia added 20 MW of installed wind power capacity, equal to an impressive growth rate of 64 percent.
Several very large projects came online in 2012 in Europe. Romania’s 600 MW Fantanele and Cogealac came online in December. The project uses 240 GE 2.5 xl Turbines, was built for the CEZ Group and estimated costs were more than 1.1 billion euros.
In Scotland, an expansion to ScottishPower Renewable’s 322-MW Whitelee Wind Farm near Glasgow also went online in 2012, adding 217 MW of additional installed capacity. With the additional MWs, the Whitelee Wind Farm is now the second largest in the world with a total installed capacity of 539 MW. The 350-MW Clyde Wind farm, also located in Scotland became operational in late 2012. The project uses 152 turbines and was developed by Scottish and Southern Energy. Located near Abington, the project was constructed at a cost of more than 600 million pounds.
The EU has also seen a boom in offshore wind development, with phase one of the world’s largest offshore wind farm — the London Array — going online in 2012. In December, project owners Dong Energy, E.ON and Masdar announced announced that the 175th and last turbine at the first 630 MW phase of the London Array Offshore Wind Farm had been installed, marking the end of major construction activities.
EU reaches 100 GW Wind Power Milestone
In September 2012, the European Wind Energy Association (EWEA) announced that the EU had reached an important milestone in wind energy development, passing the 100 GW mark for installed wind power capacity. According to the organization, 100 GW of wind power can generate electricity over a year to meet the total consumption of 57 million households, equivalent to the power production of 39 nuclear power plants.
It took the European wind energy sector twenty years to get the first 10 GW grid connected but in only 13 years it added the additional 90 GW, with 45 GW of the total European wind power capacity having been installed over the past six years.
EWEA explained that 100 GW of wind power can produce the same amount of electricity over a year as:
• 62 coal power plants, or
• 39 nuclear power plants, or
• 52 gas power plants.
China and India Rank in Top Five Markets for Wind Power
China once again led installations of wind power in 2012. The country added 5.4 GW in the first 6 months of the year. This is significantly less than what is did in the first half of the previous year, when it added 8 GW. China accounted for 32 percent of the world market for new wind turbines in the first half of the year, down from the 43 percent it accounted for in 2011. By June 2012, China had an overall installed capacity of around 67.7 GW. WWEA predicts that China will continue to be the top wind market for the foreseeable future but that its growth may slow slightly.
India added 1.4 GW of wind energy capacity in the first half of 2012 but the second half could experience a slowdown. Ernst and Young reports that the wind sector has been relatively subdued over the past six months due to the expiration two key government incentives. The Ministry of New and Renewable Energy has recommended that the government reinstate the “accelerated depreciation” tax benefit and “generation-based incentive” subsidy, on terms that are potentially even better than those that were in place until March 2012. However, there remains no certainty on whether the measures will be restored, and while 18 of the 25 State Electricity Regulatory Commissions offer FITs, the lack of coherent policy at a national level could continue to hinder future growth of the sector as a whole.
Tough Year Ahead?
Wind power will continue to expand over the next year although slowdown is predicted in the U.S. due to the now likely expiration of the Production Tax Credit, an incentive that the industry has relied on to spur development. Read more about that in our 2013 Wind Power Look Ahead, to be published during the first week of January.