With over 18,200 megawatts (MW) of wind power capacity now under construction or in advanced stages of development across 23 states, American wind power shows no signs of slowing down. Not to mention corporate-signed power purchase agreements (PPA) for wind are currently tracking ahead of last year.
The facts show that the typically reliable Bloomberg News got its recent story wrong about renewable energy’s growth. Dead wrong.
Bloomberg’s September 16 article “Where’s the Party?” even directly contradicts their article’s own headline by also highlighting a series of new corporate PPA announcements made within the past seven days.
“And the renewables sector isn’t quite a ghost town. Amazon.com Inc. yesterday announced a 253MW facility planned for Texas that will produce enough electricity to power the equivalent of about 90,000 homes. That single play puts it ahead of where Google, which has been at it a while, and Norsk Hydro were at the end of August in this calendar year. In fact, it’s the second-largest single U.S. corporate purchase to be announced, according to the American Wind Energy Association. Johnson & Johnson told Bloomberg News this morning it has committed to buying half the output from a 200-megawatt wind project being developed in Texas by EON SE.”
As Bloomberg New Energy Finance (BNEF) reported in its 2016 forecast, “coal and gas will begin their terminal decline in less than a decade” as “the era of ever-expanding demand for fossil fuels comes to an end” and that “renewables [will] take the lion’s share” of the $11.4 trillion of projected investment in power generation worldwide.
With that said, here are the top five reasons why wind energy’s party is just getting started:
- There’s a near-record amount of wind farms under construction or in advanced stages of development. Out of the 18,200 MW of wind power capacity currently under construction or in advanced stages of development, more than 9,600 MW were announced in the first half of 2016 alone. That’s more than half of total reported activity.More than 5,000 MW of wind power capacity started construction in the first six months of 2016, a 47% increase over reported construction starts in the same time period last year, and utilities are acting to take advantage of the multi-year extension of the Production Tax Credit (PTC) with announcements to build large-scale wind projects including the 2,000 MW Wind XI project by MidAmerican Energy, the 600 MW Rush Creek project by Xcel Energy, and the 500 MW Whispering Willow project expansion by Alliant Energy.
- Corporate PPAs for wind energy are tracking ahead of where they were in 2015. There’s no doubt that 2015 proved to be a breakout year for corporate buyers of wind energy. Corporate and other non-utility customers signed 52% of the megawatts contracted through PPAs in 2015, or 2,074 MW. But corporate renewable energy buying activity continues to be strong in 2016 – in fact, companies have contracted for more than 1,000 MW of wind capacity so far in 2016, tracking ahead of where they were in 2015 at the same time. Recent activity includes:
- Just last week Amazon announced the third-largest single U.S. corporate wind purchase ever to be announced. The 253 megawatt (MW) Texas facility will produce enough power for about 90,000 homes, and Amazon will be purchasing approximately 90 percent of the energy generated.
- The very next day, as reported by Brian Eckhouse, Johnson & Johnson, the world’s biggest maker of health-care products, agreed to buy 100 MW of wind power capacity from a wind project in the Texas Panhandle. This represents about 25 percent of Johnson & Johnson’s global electricity demand and 60 percent of its U.S. demand.
- And a day before the Amazon announcement, General Motors pledged to generate or source all electric power for its 350 operations in 59 countries with 100 percent renewable energy – including wind – by 2050.
- Bank of America announced last week a commitment to carbon neutrality and 100 percent renewable electricity supply by 2020, saying “Bank of America continues to demonstrate its commitment to the environment by joining RE100 with a goal to reach 100 percent renewable electricity by 2020. One company can make a significant and positive impact on the environment, but collective action is key, and we believe Bank of America will inspire more to follow suit.”
- Nearly half of the Fortune 500 have sustainability commitments – leaving a lot of room still to grow. 60 percent of Fortune 100 companies, and 43 percent of Fortune 500 companies, currently have a renewable energy target, a greenhouse gas reduction target, an energy efficiency target, or some combination of the three. According to the Rocky Mountain Institute, these renewable energy targets translate to 60,000 MW of energy demand by the corporate market by 2025. With increasingly competitive wind prices, corporate and other non-utility customers have contracted for more than 5,200 MW of wind energy capacity to date, and will continue to procure wind energy both to lower emissions and to secure low-cost, fixed-price energy that is protected from fuel price uncertainty.The following companies explain why wind is an increasingly competitive energy source:
– ”Wind in the US … has tremendous economics. With cost parity to the fossil fuel alternative it makes sense.” Mars Statement on 211 MW Investment in Mesquite Creek Wind Project, 2/17/2015– “The US has amazing wind and sun resources that will never run out. We are delighted to make this investment – it is great for jobs, great for energy security, and great for our business … We invest in our own renewable energy sources so that we can control our exposure to fluctuating electricity costs.” IKEA Statement on 98 MW Investment in Hoopeston Wind Project, 4/10/2014
– “Dow is always looking for win-win solutions – good for the environment and good for business. By entering into this agreement, Dow is taking a serious approach to our future energy needs in Texas and cost-competitive wind energy is a great opportunity.” Dow Chemical Statement on 200 MW PPA with Javelina Wind Project, 3/13/2015
- Fundamentals of the Production Tax Credit are strong. The bipartisan-backed multi-year extension of the wind energy PTC late last year signaled a new era of predictability for the U.S. wind energy industry. The performance-based PTC has helped to drive wind power’s costs downward by two-thirds in just six years. As a result of the long-term extension, the industry has already seen it spark big deals from corporate as well as utility buyers this year.
- Record wind employment and strong manufacturing activity underlines vibrant sector U.S. wind energy currently supports an all-time high 88,000 employees, including the nation’s fastest growing profession and over 21,000 well-paying jobs at more than 500 wind-related manufacturing facilities. The stability provided by the multi-year extension of the PTC is now translating to hiring announcements and facility expansions across the country:
- Vestas announced it would hire 100 new workers at its Brighton, Colorado, wind blade manufacturing facility earlier this year. This announcement came shortly after Vestas hired 350 new employees and added 100,000 square feet of new production space to its blade facilities in Windsor and Brighton, Colorado.
- Gestamp Renewable Industries, opening a new wind tower manufacturing plant in Texas, announced it would hire 180 welders earlier this year.
- Jupiter Composites completed a 25,000 square foot expansion of its Pensacola, Florida, facility in May 2016. Jupiter Composites’ workforce expanded from 28 employees in 2014 to 250 in 2016.
- In July 2016, Broadwind Energy announced a $4 million expansion of its wind tower manufacturing facility in Abilene, Texas.
- LM Wind Power started construction on an expansion of its Little Rock, Arkansas, wind turbine manufacturing facility in April of this year.
The conclusion? With the long-term extension of the PTC wind power will continue driving down its costs, which further incentivizes utilities and corporate buyers to continue investing in this homegrown clean energy source. This will also provide manufacturers with the market certainty needed to continue ramping up, adding jobs. Wind is partying and the party is just getting started.