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Forecast Dims for Future Growth in Wind Power

Despite a recent report trumpeting a record year for wind power in 2012, the numbers are not as encouraging as they seem.

Because even though total wind power capacity grew by 30 percent last year, with 13,000 megawatts in new wind turbines, the actual portion of our electricity coming from wind energy did not increase proportionally. Also, the forecast for future growth in the next few years is not robust, which means wind power will not keep up with the faster growing use of natural gas.

Cedar Creek Wind Farm, Weld County, Colorado.
Credit: BP_images/flickr

According to newly released data from the Energy Information Administration, about 140 terrawatt-hours of our electricity — enough to power over 12 million homes — came from wind power last year, up about 17 percent from 2011. But overall, wind power contributed only about 3.5 percent of all the electricity generated in the U.S. last year, up from 2.9 percent of the share in 2011.

For perspective, that number pales when compared to the blistering growth of natural gas, which produced 10 times more new electricity last year than wind power. In 2012, nearly a third of our electricity came from natural gas, which was a 21 percent increase from 2011.

In addition, there is reason to believe 2012’s record growth in wind energy capacity isn’t something we’re going to see again soon.

Last year, developers rushed to build new wind power capacity largely because a federal tax credit was set to expire at the end of the year. That credit gave wind farm operators a rebate for each kilowatt-hour of electricity generated via wind power. That rebate helped keep the price of wind power competitive with more traditional forms of electricity, but in order to qualify, those wind farms needed to be constructed before Dec. 31, 2012. The future of that tax credit remained uncertain throughout last year, so developers rushed to complete as many projects as they could. The cumulative effect created more new wind power than ever before.

As it turns out, the tax credit was renewed for another year as part of the “fiscal cliff package,” but there aren’t many new projects in the pipeline and 2013 is likely to be slow for the wind industry.

The boom-bust impact of the tax credit for the wind industry is not new. The industry saw immense growth in 2001, 2003 and 2009, all years when the tax credit faced expiration. And in 2002, 2004, and 2010, new installations dropped off, even though the credit was extended in every case.

According to the Wind Technologies Market Report, published by the Department of Energy, the absolute best-case scenario for 2013 is that the wind industry sees level growth. More realistically, new wind power installation will be just a fraction of what was built in 2012 and we may not see another big year until 2014 or 2015.  

The news isn’t all bad, though. This year’s tax credit renewal is better than it’s been in the past. Now to qualify, new installations will only have to start construction by the end of the year, rather than be completely finished. With extra time to complete new projects, developers may actually start more than they would have if they only had one year.

And beyond the tax credit, the overall price of electricity from wind continues to decrease as wind turbine technology improves. This is helping make wind power more competitive with nuclear and coal-powered electricity. As Bloomberg reported earlier this week, particularly windy conditions have already temporarily driven down power prices in some regions.

And even if the wind industry slumps in the next couple years, the U.S. could still transition a sizeable portion of its electricity generation to wind energy over the next two decades. According to the Energy Department’s strategy to get 20 percent of electricity from wind power by 2030, the U.S. would need to see consistent growth at or above the 2012 pace, starting within the next few years. A couple of slow years now will be a setback, but recently the U.S. has been ahead of its target, so the goal isn’t entirely out of sight.

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Comments

By dan_in_illinois
on March 12th, 2013

Darn!  Wind energy is not a good idea?  Who would have thunk it?

Reply to this comment

By Lewis Cleverdon (Wales)
on March 12th, 2013

I must have read several thousand articles on renewable energy news over the years, but I’ve yet to see one that dares to describe its weakness accurately, let alone its indispensable role. Instead it is hyped as an unquestioned solution.

The weakness is of course that any fossil fuels locally displaced by deployment of renewables will continue to be bought and burnt elsewhere - until such time as the US is ready to accept declining national CO2e emission rights alongside the international community under a contracting global cap on those emissions. In short, renewables do not and will not displace fossil fuel usage.

Their role - which is patently indispensable - is to keep the lights on and the wheels turning once the global climate treaty comes into force and starts displacing fossil fuel usage.

Rather like the fabricated circus of denial, which the great majority of supposedly progressive dissenting sites seem content to accomodate, renewables’ deployment and its fabricated opposition offers a classic diversion from the actual discussion that is required - namely that of just how US policy since Cheyney took power has adamantly opposed the negotiation of an equitable and efficient global climate treaty, and how that wreckless policy serving national supremacy should be overcome.

Such is the level of deference to power on most such sites that the Whitehouse faces no critique at all for pretending that its very limited support of renewbles is a serious form of action on US contributions to climate destabilization. In reality it is nothing of the sort - the central focus of official energy policy is on raising energy security, which of course uses the ‘all of the above’ approach including renewables as the most effective means to that goal.

It is good the see Climate Central addressing the matter of solutions rather than just focussing on the climate destabilization issues, but as scientists it is surely necessary to step aside from the received wisdom of what passes for dissent in the US, and to focus instead on the real priorities by which the commensurate solution can be achieved ? This would of course mean stepping out of the herd mentality, but when that is of a lemming-like conviction of the rightness of all charging along trusting that someone at the front is navigating wisely, maybe stepping aside from the herd is the only rational course for scientists to take ?

Regards,

Lewis

Reply to this comment

By Dave (Basking Ridge, NJ 07920)
on March 12th, 2013

Lewis: I think your comments describe certain aspects of the proverbial multiple 700 pound gorillas which here in the US have variously and so far obstructed notions of creating and implementing a rational, science based, long term, national climate change policy and a commensurate national energy policy. Although I think you missed the mark in attributing the problems to a society with a “herd mentality” and “lemming like convictions”, etc.  Americans are actually quite diverse and accordingly there is a spectrum of views on this topic also, which do get voiced. If you have a different, more practical solution to all this then I would certainly like to hear it.

In my view, at the heart of it, and despite the known diverse issues of importance and specific long term national and global environmental relevance of energy and climate change, is the fact that there is no official national energy policy and to my knowledge there has never been one. As a result, closed door politics and special influence unduly dominate Washington’s decisions on that and indeed, as is well known and truly sorely tolerated, many other matters too. This is what it has become. That is not news anymore. Pretty much everyone knows it.  It is not a popular state of affairs or anything to be proud of. 

Anyway, in this context, from a US government perspective, energy ‘policy’ here, rather than being more of a democratically and expertly considered and appropriately impressive construct, is instead an intentionally institutionally weak ad hoc accident of whoever happens to have the most influence. Therefore no one here with any sense expects massively effective solutions from the government.  Unfortunately, many here also doubt for these fair reasons, that there is any real national leadership on this issue, let alone “…someone at the front… navigating wisely”.

Reply to this comment

By Abraham Lin (Palo Alto, California 94303)
on March 12th, 2013

The only problem is just like gasoline it is not a renewable energy source.  And it will end someday and our environment will be poorer for it.  The cost to the environment is not calculated into the equation.  As for the wind, it will always be there as long as the sun shines and the earth turns and with some imagination it may even look pretty if put our minds to it.  Take a long view for once and we all will live longer.

Reply to this comment

By dan_in_illinois
on March 13th, 2013

Abraham,

I assume your first sentence refers to natural gas.  How exactly will removing natural gas from below the earth’s surface make the environment poorer?  Will the environment be richer if we leave the natural gas in the ground?  Why?

Also, why do you assume that those of us who feel that wind power is an expensive, ugly, and ineffectual means of producing power aren’t taking the long view?

Reply to this comment

By donald shinault (Faiview, tx. 75069)
on March 14th, 2013

We have a, “Glut” of Nat. Gas right now from Fracking & a Huge Boom of Oil right behind it. We’ve only got 1 plant
in the USA that can Only “Recieve Nat.Gas” & that’s Exxon in Texas. If the President will “Sign Off on New Plants”,
we can start building them to sell our Nat Gas??  It takes years to buils a plant to ship it out but Obama’s yet to ok
the 1st “Permit to Build” so we can make money on it. This Natural Gas is worth 400% MORE in Asia, China, & in
Russia but we’ve not even started to build….WHY NOT??  As for Wind & Solar, the Oil & Gas companies are
keeping the prices too high for us to use it still & Even if it doesn’t provide a great deal of power, ANY Clean Power
is Good Power from where I sit!!  Electronics are cheap yet they keep Solar & Wind Electronics higher than they
should….We need every source of Energy we can get to save Money & Earth…..?

Reply to this comment

By Nick G
on March 14th, 2013

Lewis,

I mostly agree with your comment, except for one thing:

Reduced consumption of fossil fuels, wherever it happens, really does reduce emissions overall.  Reduced demand reduces prices, which lowers the incentive for producers to invest in new production.  For instance,
Bakken oil is much more expensive, and a change in the price of oil causes a pretty clear reduction in drilling in N. Dakota.

Now, certainly reduced prices will allow some consumers to use more than they would have otherwise, so part of the reduction in one place will cause increased consumption elsewhere, but only *part* of the reduction will be lost.

Reply to this comment

By Dave (Basking Ridge, NJ 07920)
on March 14th, 2013

I agree Nick G.

I also think that although the ominous impact bears careful consideration, perhaps it is a bit too fatalistic to imagine that all available fossil fuel resources will ultimately be exploited and burned. It goes without question that the future of energy economics is uncertain and so where it will be even just 5 years from now is hard to say. Up until the mid 19th century whale oil was in a way the big equivalent of today’s fossil fuel industry.  Then along came petroleum and then electricity and economics forced the collapse of the whaling industry. Whales almost became extinct – but not quite. Hopefully we’ll be a bit smarter this time around with the transition from fossil fuel but if not, and climate change policies don’t force it, then there’s always the economics of it. In that respect, the broad expectation is that as long as there is continued development then the economics will inevitably improve for renewables such as wind and solar versus fossil fuels with mining and processing costs. The timing is uncertain and that is a key issue for climate change. Disruptive black swan events can also happen. But it seems logical to me that that will be a big part of the trend.

Reply to this comment

By Nick G
on March 14th, 2013

Alyson,

Your article is oddly, and unrealistically, pessimistic.

Wind capacity grew by 30%, but production grew by 17% because much of the wind was installed very late in the year.  That’s just a quirk, and those turbines will be producing in full force next year.

The article suggested that natural gas was growing more quickly than wind, but in fact the gain in market share for both was almost identical (21% for NG, and 20.7% for wind (3.5% divided by 2.9%)).  And, of course,  wind capacity really grew by 30%!

Dave,

Thanks.  I agree with you about the difficulty of forecasting change: who 5-10 years ago anticipated that solar would get so cheap so fast??

Reply to this comment

By Alyson (Climate Central)
on March 15th, 2013

Nick,

You’re right to point out that a lot of the newly installed capacity came late in the year, which would be one reason overall growth in generation from wind didn’t match installation growth. Hopefully generation numbers in 2013 reflect this growth, but I will say that, looking back over generation vs installation growth over the past several years (in EIA data), it is not a given that years with lots of new wind installation are automatically followed by years with a lot of new wind generation. In some cases, the opposite has happened. There are so many other factors that influence generation, it is difficult to predict.

In terms of growth of market share, yes, natural gas and wind grew at the same rate. But the actual market share of natural gas increased far more, as I described, because its starting point was already much bigger. Of course, wind power has to start somewhere and it is a good sign that growth rates are positive.

While I am optimistic about wind’s energy’s potential in the long run (and wind energy can play an important role in decarbonizing electricity generation in the U.S.) my intention was to point out that the next couple years may not be as encouraging as recent news reports have been on the subject

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