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 Feature Industry Articles 
Tuesday, April 02 2019
Wind Energy Powers Through a Successful 2018

By Celeste Wanner, Senior Analyst, Research and Analytics, American Wind Energy Association

Innovation and Enthusiasm Spur a Year of Significant Wind Gains

2018 was a monumental year for wind power in the United States, with exciting growth, demand from new customers, and continued technological advances. The fourth quarter alone was the third strongest quarter ever for capacity installations with 5,944 megawatts (MW) added, more than all the wind installed in Kansas, the country’s fifth largest wind state. In total, the industry commissioned 7,588 MW of new wind capacity in 2018, bumping the U.S.’s installed capacity to 96,488 MW. More wind deployment and innovations continue to drive costs lower, attracting the attention of new corporate buyers, while new horizons offshore present lucrative opportunities for American businesses.

Among the many innovations making debut appearances in the American market was the introduction of the first four MW land-based wind turbines with orders announced by both Senvion and Vestas. This is nearly twice the capacity of the average turbine installed in 2017. It’s a notable stride in achieving great scale and efficiency by offering developers more options for customizing wind farms to match the unique wind resources of their project site.

As the U.S. wind industry continues to grow and mature, wind increasingly delivers enormous benefits to every state across the country. U.S. wind projects offer low-cost, reliable electricity, new manufacturing and technician jobs, plus millions of dollars in land lease payments and investment in communities nationwide.

New Customers: Fortune 500 Power Up Using Wind

The last few years have seen strong demand for wind power from major Fortune 500 corporations and other non-utility buyers like universities and cities. These buyers set a new record in 2018 for non-utility power purchase agreements (PPAs), inking contracts for 4,203 MW of wind energy. To-date, non-utility buyers have contracted for more than 11,300 MW of wind power, which is more than the installed wind capacity of Iowa, the country’s number two wind state.

Wind’s low, stable prices and clean energy attracted a diverse collection of repeat customers and first-time buyers in 2018. Companies including AT&T, Exxon Mobil, and Royal Caribbean Cruises purchased wind energy for the first time, while several Fortune 500 companies like Facebook and Walmart expanded their wind portfolios. Other corporations like Nike, T-Mobile, and General Motors also entered PPAs to buy wind power last year.

Wind power offers an attractive selling point for companies deciding where to locate their operations and workforce. For example, Apple specifically chose Iowa as the home for several energy-intensive data centers because of its access to reliable, renewable energy. 

“For us, that’s kind of a gate,” said Apple CEO Tim Cook, explaining why his company built new data centers in Iowa. “If we couldn’t [power them with wind], we would not be here.”

This record-setting year demonstrates more and more American businesses recognize the benefits of locking in low rates on the electricity they use to power their operations. Wind power allows companies plan for the future by providing a hedge against fuel price volatility while helping them achieve their sustainability goals.

“Renewables from projects like [these] bring value to our business as we scale and accelerate investment in the communities where we operate,” said Gary Demasi, Google’s director of global infrastructure. “With solar and wind declining dramatically in cost and propelling significant employment growth, the transition to clean energy is driving unprecedented economic opportunity and doing so faster than we ever anticipated.”

State Enthusiasm

Private companies and municipalities are not the only ones seeing wind’s benefits. 2018 was a landmark year for states advancing renewables energy to diversify their energy supply and reduce their carbon pollution. The expansion of these policies will provide additional demand for wind project development.

States like California, Connecticut, Massachusetts, New Jersey, and the District of Columbia all passed impressive new renewable portfolio standards (RPSs) that will help them secure the clean energy they need to power their competitive economies. Nevada voters also approved a ballot measure that would amend the state’s constitution to include a 50 percent RPS. The measure is now waiting for approval from the state legislature.

Offshore Wind Wave is Rushing to Shore

Offshore wind presents another growth area as the U.S. begins tapping into a new ocean energy resource, and states along the coast are looking for opportunities to harvest the winds blowing along their shorelines. The Block Island Wind Farm in Rhode Island is currently America’s only offshore wind project, but that is not likely to be the case for long. 2018 was a groundbreaking year for offshore wind development and the industry’s strong momentum will continue into 2019.

Last year, the Federal Bureau of Ocean Energy Management (BOEM) held new offshore wind area lease auctions. In December, BOEM put three parcels up for auction off the coast of Massachusetts. The winning bids – made by Equinor, Mayflower Wind Energy, and Vineyard Wind – totaled over $405 million. It was a record-smashing result that indicates offshore wind is finally landing on U.S. shores, and it offers proof that businesses worldwide view offshore wind as an attractive investment.  

Technological advancements and new supply chains will continue to bring offshore wind costs down. New, more powerful turbine models will allow offshore wind farms to more efficiently catch strong coastal breezes. Investments in critical infrastructure and innovations, like improvements to the New Bedford Marine Commerce Terminal or MHI Vestas’ $35 million offshore wind turbine gearbox testing facility at Clemson University in South Carolina, will drive the industry forward. These investments will not only support the burgeoning offshore wind industry but will also create new job opportunities for coastal communities and provide reliable, clean energy to consumers.

As offshore wind matures, costs will continue to decline. Vineyard Wind already surprised many observers, securing a PPA with costs much lower than anticipated.

"People throughout Massachusetts, on a policy and political level, as well as the offshore wind industry, were just blown away on how low this price has been," said Bill White, senior director of offshore wind for Massachusetts Clean Energy Center.

One reason the prospects for offshore wind are so optimistic is that states up and down the East Coast are setting ambitious offshore wind goals. This strong support is helping the industry achieve scale while growing U.S. supply chains. For example, in August, Massachusetts passed legislation doubling its offshore target to 3.2 gigawatts (GW) by 2035. Already in 2019, New York Governor Andrew Cuomo has raised offshore ambitions further by proposing his state more than triple its target to 9 GW by 2035, raising the bar for offshore nationwide.

Land-based wind already supports over 105,000 American jobs. Scaling up offshore wind hold similar opportunities. One study indicates coastal communities could see over 36,000 new jobs in the next 10 years alone, piquing interest from a diverse set of stakeholders in 2018 and beyond.

 A Year of Construction and Wind Output Records

Construction and development activity remained high in 2018, with seven states set to double their capacity in the coming years. Some states set to double, like Maryland and Massachusetts, place their optimism in the promise of offshore wind. Other states like Arkansas, Nebraska, New Mexico, South Dakota, and Wyoming are harvesting their abundant land-based wind resources. In Q4, South Dakota passed 1 GW of installed capacity, becoming the 19th state to do so. Meanwhile, Iowa and Oklahoma jockeyed for the position of second-highest wind capacity in the U.S. with Iowa pulling ahead at the end of the year.

At the same time we’re seeing record wind farm construction and development, we’re also seeing wind become an ever more integral part of the U.S. energy mix. From East to West, wind is setting records for output in the Regional Transmission Organizations (RTOs). In ERCOT, the primary grid for Texas and the country’s largest wind energy market, wind generation set several new records. On December 14, ERCOT reported its highest instantaneous wind output of 19,168 MW. Only two months earlier, wind power supplied 54 percent of ERCOT’s total electricity generation.

ERCOT has been able to achieve this level of wind penetration without compromising reliability. And ERCOT is not alone. Southwest Power Pool (SPP) also set records this year—for both real-time wind output, generating 16,382 MW, and instantaneous wind penetration at 64 percent. SPP holds the record for wind penetration across all U.S. markets, which lends credence to its statements that wind helps the system reliably meet consumer electricity demand.

“Ten years ago we thought hitting even a 25 percent wind-penetration level would be extremely challenging,” said Bruce Rew, VP of Operations for SPP. “Now we have the ability to reliably manage greater than 50 percent. It’s not even our ceiling. We continue to study even higher levels of renewable, variable generation as part of our plans to maintain a reliable and economic grid of the future… With a footprint as broad as ours, even if the wind stops blowing in the upper Great Plains, we can deploy resources waiting in the Midwest and Southwest to make up any sudden deficits."

ERCOT and SPP were not the only RTOs to set records. CAISO, MISO, PJM, and ISO-NE all set new records for real-time wind output last year. These record-breaking trends are expected to continue. Already in 2019, records have been set. On January 8th, wind produced over 16,282 MW in MISO. And only a day later, wind produced over 7,889 MW or 9.24 percent of real-time demand in PJM, the United States’ largest electricity market.

Wind Still Works for America

In 2017, wind produces over 6.3 percent of the country’s electricity and, overall, 14 states generate at least 10 percent of their electricity using wind. Iowa, Kansas, South Dakota and Oklahoma lead the way by generating at least 30 percent of their electricity using wind. In 2018, wind continued to work for America. By the end of last year, the United States had 96,488 MW of wind power capacity installed.

The wind industry’s presence across the country continues to positively transform communities by creating new jobs and investment, especially in low-income and rural communities. In 2017, wind projects paid out over a quarter of a billion in land lease payments to landowners. This number will only grow higher as more wind projects come online. These payments have created a stable source of income for many farmers and ranchers, as well as a hedge against poor crop yields or spikes in commodity prices. For many families, they can make the difference between continuing a multi-generation tradition and ending a way of life. Taxes or other arranged payments from wind companies also support local schools, public services, and local law enforcement. For many rural counties, wind farm payments represent an enormous boon to county coffers that simply cannot be otherwise replicated.

“Wind energy, the fastest-growing source of electricity in the U.S., is transforming low-income rural areas in ways not seen since the federal government gave land to homesteaders 150 years ago,” the Omaha World-Herald reported. “As commodity prices threaten to reach decade lows and farmers struggle to meet debt payments, wind has saved family farms across a wide swath of the heartland."

Besides being a powerful economic development tool for the rural U.S., over 105,000 Americans spread across all 50 states work in wind. Wind turbine technician is the country’s second-fastest growing job according to the U.S. Bureau of Labor Statistics, while workers in over 500 U.S. factories build wind-related parts. This means that in many farming and factory towns, young people can find good careers without leaving their families or homes.

In addition to these economic benefits, wind is helping to create cleaner air. In 2017 alone, wind created $8 billion in public health savings by cutting air pollution that creates smog and triggers asthma attacks.

The growth of wind power has produced benefits in all 50 states. From manufacturing facilities that produce blades and turbine components to the wind farms creating electricity for millions of consumers, wind energy is continuing to add chapters to its American success story.

Bio: AWEA is the national trade association of the U.S. America's wind energy industry, with 1,300 member companies, including global leaders in wind power and energy development, wind turbine manufacturing, component and service suppliers, and the world's largest wind power trade show, the AWEA WINDPOWER Conference & Exhibition, which takes place next in Houston, Texas, May 20-23, 2019. AWEA is the voice of wind energy in the U.S., promoting renewable energy to power a cleaner, stronger America. 

Posted by: AT 11:20 am   |  Permalink   |  Email
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