Christmas came early for clean energy in 2015, setting the stage with new resolution for America’s transformation to renewable power in the New Year. The global climate agreement in Paris, surging demand for renewables in U.S. energy markets, and Congress’ extension of wind and solar tax credits, all promise to make 2016 a banner year for clean power — wind in particular.
On December 12, negotiators from 196 countries approved the historic Paris Climate Agreement, committing to taking serious steps to cut greenhouse gas pollution to address the climate crisis. Two decades in the making, the pact sent a clear signal to energy markets and policy makers that it’s time hasten the transition from fossil fuels, and accelerate investments and the marketplace momentum that wind and other clean energies have built in recent years.
On December 18, less than a week later, Congress passed and the President signed a 2016 spending bill that included five-year extensions of renewable energy tax credits for wind and solar power, which help level the playing field and ensure a stable investment environment for continued U.S. clean energy growth.
This one-two clean-power punch from U.S. lawmakers and international leaders couldn’t have come at a better time. It will certainly resonate with a ready and receptive marketplace. Indeed, since global climate talks began in 1992, a clean energy revolution has been reshaping world’s energy markets.
That revolution has been led by the low-cost of wind. Today, clean energy from wind is one of the most cost-effective climate change solutions. And wind power isn’t just cost-competitive. Wind is the cheapest source of newly installed power in the largest energy markets on five continents, based on real costs.
Globally, the price of wind energy has dropped 80% in the last two decades. Over that time, total growth of installed wind energy capacity jumped more than 60-fold, to almost 400 gigawatts (GW), or 4 percent, of the world total. Among renewables, solar is second, approaching 200 GW.
In the U.S., Lazard reports real wind energy costs are down 61 percent since 2009. Across wide swaths of central U.S., wind is already the cheapest new power source. It’s on track to be the cheapest energy almost universally in just over a decade. With a global data stream and forecasting from wind turbines worldwide, we have also been able to eliminate unpredictable spikes from the energy cost equation. Today, wind offers a combination of low-cost and long-term certainty unmatched by any other energy source – clean or fossil.
Not surprisingly, the marketplace has responded. For the past two years, wind has been the #1 source of new electric power capacity installed in the U.S. During the first three quarters of 2015, wind added 41% of all U.S. newly installed energy – beating out both natural gas and solar.
Clean energy skeptics and climate change deniers may continue to express doubts. But defenders of an old energy status quo dominated by fossil fuels really have nowhere left to hide. Wind energy is now a key contributor to power grids in the U.S. and globally. It has attracted major companies such as Amazon, Apple, Google, IKEA, Microsoft and Walmart as investors.
Wind energy has also won strong backing from major investment firms. Blackrock, the world’s largest asset manager, recently launched a Renewable Power Group for wind energy investing, and describes renewables as a “fast river” for opportunities and deals. Goldman Sachs reports clean energy has “reached an inflection point” by topping conventional energy sources in newly installed power, and has tripled to $150 billion its renewables financing targets.
That’s a huge shift in market momentum for clean energy, and it comes despite decades of subsidies supporting fossil fuels.
The really good news is that wind energy is proving the power of the marketplace, backed by sensible policies, to provide cheaper climate solutions that are also an engine for jobs and growth. Wind power currently supports 70,000 US jobs – 4,000 of those created by Vestas. Total U.S. jobs in the sector are projected to increase to 375,000, as we work to raise wind’s share of U.S. energy to 20 percent by 2030.
As we move forward in 2016, the wind is literally at our backs. Wind energy has a proven track record, taking the clean power crown on cost, carbon reduction and also conserving water, which is a key factor in Western states.
Most importantly, wind power is ready to turn on now. It makes good sense for business, and good sense for the planet and people living on it. I can’t think of a better resolution than to make 2016 a watershed year for America’s switch to a clean-energy economy.
Chris Brown is president of Vestas-American Wind Technology, Vestas’ North American business unit.