How Does U.S. Wind Keep Growing? It’s the Big Question for WindPower

Without the support wind gets in Asia and Europe, what is this industry’s secret? The wind industry will mull the question at WindPower next week.

The nation's biggest wind energy conclave opens Sunday in Anaheim. The last time wind threw its big party in California was 2007. There were 5,000 attendees, said Peter L. Kelley, the American Wind Energy Association (AWEA) Vice President for Public Affairs. The cumulative U.S. installed wind capacity that year, Kelley added, was 17 gigawatts.

A tempestuous four years later, the U.S. has a cumulative installed wind power capacity of over 41 gigawatts, wind provides 2.3 percent of the nation’s electricity and more than 20,000 people are expected in Anaheim.

The secret to wind’s growth can be found in another number Kelley emphasized: U.S. wind energy was picked to provide 35 percent of new U.S. power capacity over the four-year period after 2007, second only to natural gas. In other words, the people who keep the lights on decided that new wind -- not new nuclear, not new coal -- was the right buy.

And, Kelley pointed out, though shale gas deposits are making natural gas cheap right now, “nobody expects that to last, not even the people in the natural gas industry.” Plans for liquid natural gas (LNG) exports, compressed natural gas (CNG) as a heavy transport fuel, and problems with hydrofracking in the shale all suggest supply will be challenged by demand, driving prices higher.

Meanwhile, the price of wind has consistently come down. “If you look at the numbers at FERC over the past year,” Kelley said, “wind’s power purchase agreements (PPAs) have been signed in the range of 3.4 cents per kilowatt-hour to 11.7 cents.” Therefore, Kelley added, “you’ve got utilities looking to lock in these prices long-term” as a hedge against natural gas price volatility.

In 2010, wind’s year-on-year installed capacity growth was fifteen percent and the industry remained ahead of schedule for achieving its goal of providing twenty percent of U.S. electricity by 2030, “faster than the nuclear industry ramped up to make twenty percent of America’s electricity in the last century,” Kelley said.

Wind’s success was somewhat subdued by the turn in Washington against long-sought policies that, in 2009, seemed within the industry’s reach, such as a national Renewable Energy Standard (RES). Though a more fiscally conservative Congress has recently been uncooperative, state standards and policies continue to be one of the keys to wind’s growth.

Indiana just passed a new standard, current Ohio budget figures validated the value of its existing standard, Kansas and Minnesota just defeated efforts to make siting wind projects more difficult, and -- most importantly -- California just took on the challenge of getting 33 percent of its power from renewable sources by 2020. With its previous 15-percent-by-2010 standard, California went from 2,400 megawatts to almost 3,200 megawatts from 2007 to 2011. The new standard should generate even more building activity.

With such standards, goals and policies supporting renewables, the drive at the state level to build infrastructure remains strong. The standards also add to utilities’ pursuit of PPAs.

“We started this year,” Kelley said, “with twice as much wind under construction as last year.” In addition, Kelley stated that the industry "installed in the first quarter of this year twice as much as in either of the last two years.”

Another key to wind’s sustained growth is the immense U.S. wind resource. It is exploitable in the Southeast and strong in the Pacific Northwest, in the Western mountains and in New England. It is plentiful on the Midwestern plains from the Canadian border to West Texas. It is even richer off the Atlantic coast, on the Great Lakes and in the Gulf of Mexico.

“The wind blows hardest in the red states,” Kelley said, insisting renewable energy is a national and not a partisan issue. “Most of our industry is probably Republican, like any other manufacturing industry," he said, adding, “Everybody needs to plug things in.”

Perhaps the most important way that wind has sustained its growth -- a strategy the solar energy industry has clearly absorbed -- is through unceasing research and development.

New turbine technology already allows developers to exploit lower-speed winds and get more production from otherwise potentially destructive high-power winds. Even better engineering will allow cost-effective development in the more challenging offshore environment. It is not just about achieving parity. It is about achieving parity in more and more conditions.

Since the 1980s, when California built the first utility-scale wind farms, “The area swept by a wind turbine has increased twenty times,” Kelley said. Today’s typical 1.6-megawatt GE turbine, he said, sweeps “an area the size of a football field.” Fewer are needed in a wind farm, creating more benign aesthetic and habitat impacts while generating a lot more electricity.

“The average turbine is seven times larger than it was in the 1990s,” Kelley said, “but generates fifteen times as much electricity.”

A panel led by mega-retailers Wal-Mart, Lego and Ikea will, on June 15, affirm that wind is no longer just an alternative. The panel will announce just-finished standards by which a product can be certified as Wind-Made and qualify for a special icon on its label.

“The only reason a company would do this,” Kelley pointed out, “is because they think it increases market share,” much in the same way that label icons for fair trade coffee, organic foods and recycled products increase sales. “How do you carve a share of the market when you’re up against tough competition? You stick a label on your product that consumers care about.”