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Best of times, worst of times: Renewables contribute all new U.S. generation in September

Best of times, worst of times: Renewables contribute all new U.S. generation in September

Wind power and renewable energy in general once again made themselves known among the top players on the power generation landscape last month: wind power and solar contributed every megawatt of new generation that was installed in the U.S. during September, according to a monthly report from the Federal Energy Regulatory Commission (FERC). But the good news for renewable energy only highlighted wind power’s complicated story of 2012.
 
The Energy Infrastructure Update for September 2012, produced by FERC’s Office of Energy Projects, reported that a total of 433 MW of new electric generating capacity came on line last month, with 300 MW coming from wind projects and 133 from new solar facilities. With over 51,000 MW now installed, wind comprises 4.43 percent of the U.S.’s generation mix, the report showed.
 
Wind power has long established itself as a conventional energy source, with 35 percent of all new generation capacity coming from the affordable and clean energy source during the last five years.
 
The September numbers generally track with those from AWEA, which released its third-quarter industry report last week, while the industry celebrated its 50-gigawatt milestone in late summer. The industry is on a red-hot pace, turning in record-setting under-construction numbers and setting the stage to achieve new annual installation marks in 2012.
 
That’s the “best of times” side of the story.  But a “worst of times” dimension to the industry picture has simultaneously proven to be all too real. Paradoxically, in fact, the big story that is the record-setting project development and construction push has been driven by both healthy and dysfunctional forces. As for the healthy market factors, the cost of wind power is down thanks to constantly improving technology, and utilities are turning to the generation source more than ever to both keep their own costs down and lock in guaranteed, stable prices—a concept unknown on the fossil-fuel side of their portfolios.
 
And the dysfunctional side? Federal policy uncertainty. The federal Production Tax Credit (PTC), wind power’s primary policy driver (all energy sources have them), is scheduled to expire at the end of the year. Optimism remains that Congress will get the job done and extend the credit during the lame-duck session after the election—this timing has been seen as the most likely scenario for awhile—but wind power companies can’t bet on that, nor can the financiers that are backing the projects. Project deals are put together with the PTC being part of the equation, and so the players can’t afford to place themselves at the mercy of Congress’s action or inaction.
 
Unfortunately, the damage is already being done. Companies along the industry supply chain, meanwhile, reflect “the worst of times” side of the Dickensian phrase. With project development cycles taking 18 months, several factories making components that go into wind turbines have announced layoffs.
 
Those layoffs represent just the beginning if Congress doesn’t act. A total of 37,000 jobs will be lost if the PTC is not extended.
 
Through its project numbers and jobs created all along the supply chain, wind power keeps showing it can be—and already is—a key part of America’s energy mix. Now it’s time for Congress to tap wind power’s bipartisan appeal and do its part.

 

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Carl has been a part of the AWEA team since 2006. He brings both his expertise in communications as well as experience with the evolving wind energy industry to the job of overseeing AWEA's online and written publications including the Wind Energy Weekly, WINDPOWER Update, WINDPOWER Today, and various print materials. He has worked as a journalist in the energy industry as a staff writer for Public Utilities Fortnightly magazine and in the association sector as senior editor at Association Management magazine. He also has covered the home-building industry, where his areas of greatest interest were sustainable development and "smart growth," and has written articles for numerous other publications as a freelance writer. Carl received his B.A. from James Madison University and spent some time in New Orleans employed as a teacher as well as working with homeless youth.

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