According to the U.S. Department of Energy’s (DOE) annual wind market reports, the U.S. added more than 8.2 GW of wind capacity last year, representing 27% of all energy capacity additions in 2016. The DOE says its three new market reports – covering land-based utility-scale, offshore and distributed wind – demonstrate continued growth in wind power nationwide.
The reports were prepared by the DOE’s Lawrence Berkeley National Laboratory, whose contributions were funded by the DOE’s Office of Energy Efficiency and Renewable Energy.
According to the DOE, recent and projected near-term growth is supported by the industry’s primary federal incentive, the production tax credit (PTC), as well as myriad state-level policies. Wind additions have also been driven by improvements in the cost and performance of wind power technologies, yielding low power sales prices for utility, corporate and other purchasers. At the same time, the prospects for growth beyond the current PTC cycle remain uncertain, given declining federal tax support, expectations for low natural gas prices and modest electricity demand growth, the agency points out.
Utility-scale onshore wind
According to the report, utility-scale wind installations stand at more than 82 GW, enough to meet about 6.2% of U.S. end-use electricity demand in an average year.
In total, 40 states and Puerto Rico operated utility-scale wind projects in 2016. Texas led the nation in capacity with over 20 GW of wind installed. Notably, utility-scale wind came online in North Carolina in early 2017.
The report also finds that wind energy continues to be sold at attractive prices through power purchase agreements – making wind cost-competitive with traditional power sources such as natural gas in many parts of the U.S, especially when wind is sold at a fixed price over 20 years.
In the past year, Iowa and South Dakota produced more than 30% of their electricity from wind, and 12 other states exceeded 10% (Kansas, Oklahoma, North Dakota, Minnesota, Colorado, Vermont, Idaho, Maine, Texas, Oregon, New Mexico and Nebraska).
The Berkeley Lab notes that wind energy pricing for land-based utility-scale projects remains attractive to utility and commercial purchasers.
In December, Deepwater Wind completed the commissioning of the Block Island Wind Farm, marking a milestone as the first commercial offshore wind project in the U.S.
According to the report, the U.S. offshore wind project development pipeline includes over 20 projects totaling 24,135 MW of potential installed capacity. Most of the near-term activity is concentrated in the Atlantic off the Northeast coast, but projects have also been proposed in the Southeast Atlantic, the Pacific, the Gulf of Mexico and the Great Lakes.
Of the U.S. projects in deeper waters – where traditional, bottom-mounted technologies are not feasible – proposed floating offshore wind projects now total 1,993 MW of announced capacity, the report says.
Notably, the DOE adds, news of the declining costs for offshore wind projects in Europe have spurred confidence in the domestic U.S. offshore wind market over the past year. Several states, including Massachusetts, New York and Maryland, have enacted new policy or bolstered their existing policy to support the development of over 4 GW of offshore wind.
Compared with traditional, centralized power plants, which send power over transmission lines to distant end-users, distributed wind energy installations supply power directly to homes, farms, businesses and communities. In total, U.S. wind turbines in distributed applications reached a cumulative installed capacity of 992 MW through 2016.
This capacity comes from roughly 77,000 turbines installed across all 50 states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands.
Turbines used in these applications can range from a few hundred watts to several megawatts; this helps power remote, off-grid homes and farms, as well as local schools and manufacturing facilities, the report explains.
Furthermore, U.S. manufacturers continued to dominate domestic sales of small wind turbines (up through 100 kW), and half of U.S. small wind turbine manufacturers also exported their products to other countries.
Between 2014 and 2016, U.S.-based small wind turbine manufacturers accounted for more than $240 million in small wind turbine export sales, the report adds.
According to the Berkeley Lab, the report also finds that bigger turbines are enhancing wind project performance: The average generating capacity of newly installed wind turbines in the U.S. in 2016 was 2.15 MW – up 11% from the average over the previous five years.
In addition, the average rotor diameter in 2016 was 108 meters, representing a 13% increase over the previous five-year average, while the average hub height in 2016 was 83 meters, which was up 1% over the previous five-year average.
Moreover, turbines originally designed for lower wind speeds are now regularly deployed in higher wind speed sites, boosting project performance, the Berkeley Lab says. Increased rotor diameters, in particular, have begun to dramatically increase wind project capacity factors. For example, the average 2016 capacity factor among projects built in 2014 and 2015 was 42.6%, compared with an average of 32.1% among projects built from 2004 to 2011 and 25.4% among projects built from 1998 to 2001.
Further, low wind turbine pricing continues to push down installed project costs. Wind turbine equipment prices have fallen from their highs in 2008 to $800-$1,100/kW, and these declines are pushing down project-level costs, according to the report. The average installed cost of wind projects in 2016 was $1,590/kW, down $780/kW from the peak in 2009 and 2010.
The report also finds that manufacturing supply chains continued to adjust to swings in domestic demand for wind equipment in 2016. Wind sector employment reached a new high of more than 101,000 full-time workers at the end of 2016, and the profitability of turbine suppliers has generally rebounded over the last four years. For wind projects recently installed in the U.S., domestically manufactured content is the highest for nacelle assembly (>90%), towers (65%-80%), and blades and hubs (50%-70%). However, it is much lower (<20%) for most components internal to the turbine, the report says.
Although there have been a number of manufacturing plant closures over the last decade, each of the three major turbine manufacturers serving the U.S. market (GE, Vestas and Siemens) has one or more domestic manufacturing facility in operation, according to the report.
“The wind industry continues to install significant amounts of new capacity and supplied about six percent of total U.S. electricity in 2016,” states Daniel Simmons, acting assistant secretary for energy efficiency and renewable energy. “As our reports explain, a combination of federal subsidies, state mandates and technological advancements continue to help drive new wind capacity additions.”
Ryan Wiser, senior scientist at the Berkeley Lab, adds, “Wind energy prices – particularly in the central United States and supported by federal tax incentives – are at all-time lows, with utilities and corporate buyers selecting wind as the low-cost option.”
“The Department of Energy’s research shows that wind power is a bright spot on the American energy landscape,” says Tom Kiernan, CEO of the American Wind Energy Association. “U.S. wind projects are already among the most productive in the world, and this new data proves we have even greater potential to deliver affordable, reliable and clean electricity to the American people.”