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How much wind energy does the future hold? It depends.

Courtesy of Brad Jones, E.ON
How much wind energy does the future hold? It depends.

As American wind energy surges forward with robust construction numbers and other indicators showing strength, the industry finds itself at a pivotal and complex time that may make it difficult for companies to plan for the future.

At the center of that complexity is the uncertainty surrounding wind energy’s primary policy driver, the Production Tax Credit (PTC), which expired at the end of 2014.  Thanks to language that required companies to only start construction by the end of last year (rather than having projects finished by the deadline), last year’s PTC continues to have a positive impact on the industry in spite of its expiration.

However, the residual impact of the expired PTC can’t last forever. To avoid a cliff for the industry, the American Wind Energy Association (AWEA) and industry advocates continue to push for an extension of the PTC, which has helped bring nearly 66,000 MW of homegrown, clean energy to America and spurred major wind technology development and cost reductions.

In addition to questions surrounding the PTC—including what form any extension would take—other dynamics factor into the industry outlook. Implementation of the U.S. Environmental Protection Agency’s (E.P.A.’s) Clean Power Plan (CPP), which will call on states to reduce power plant carbon emissions, is not far away; moreover, CPP implementation details that will be finalized by E.P.A. this summer may prove to be a wind energy market driver before 2020, when the policy is currently slated to kick in. Meanwhile, factors outside of the policy realm come into play. The cost of wind energy has declined 58 percent in the last five years, and that trend is expected to continue. The price of natural gas and electricity demand growth remain key sources of uncertainty for all forms of electricity production.

“This is a pivotal time for the industry,” said Michael Goggin, AWEA Senior Director of Research, who will be moderating a session at the WINDPOWER 2015 Conference & Exhibition on wind energy market forecasts. “Long-term, the outlook is brighter than it’s ever been, with the cost of wind energy continuing to fall and the E.P.A.’s Clean Power Plan in the works. But nearer-term, there are still policy uncertainties that complicate the industry landscape, not to mention the market dynamics that are always evolving.”

The session Goggin will moderate, “U.S. Wind Energy Market Forecasts: Where, When and How Much?” (Tuesday May 19, 10:30) features a complete lineup of the most prominent firms in renewable energy market analysis. Weighing in on these various market dynamics will be Dan Shreve, Partner at MAKE Consulting; Amy Grace, Lead North American Wind Analyst at Bloomberg New Energy Finance; Bruce Hamilton, Director at Navigant Consulting, Inc.; and Andy Lubershane, Senior Analyst at IHS Emerging Energy Research.

While the session has become a tradition, the landscape has changed during the last year. At this time last year, the E.PA.’s draft of its Clean Power Plan had yet to be issued, while the PTC had not yet been extended for 2014. This year, the expert panelists will be providing projections for a variety of possible policy and market scenarios.

“The session will give us a chance to look at all of those forces together in one discussion,” said Goggin.

WINDPOWER 2015 takes place May 18-21 in Orlando, Florida. Go to windpowerexpo.org for more information.

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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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