Project economics continue to tell the story for U.S. utilities, as wind power surges past hydroelectricity in total installed capacity and builds an “addressable marketplace” in 41 states, 19 of which brought new projects online in the last quarter alone.
“Momentum for that wind construction came not just from utilities aiming to meet renewable energy mandates, but because power companies saw economic reasons to invest in wind,” Utility Dive reports. Utilities and power co-operatives contracted for 56% of the new capacity in 2016, up from 50% in 2015 and 40% in 2014, with regulated and unregulated utilities taking some degree of ownership in an estimated 50% of the projects that went online last year.
“It is a buyer’s market for utilities in wind right now,” Duke Energy Renewables spokesperson Tammie McGee told the industry news outlet. “They can still get 80% of the production tax credit benefit before it is stepped down to 60% at the end of this year. And power purchase agreement prices are now in many places competitive with fossil fuel generation, so it is a cost-effective way to diversify an energy portfolio.”
Utility Dive projects the trend continuing into 2017, “with utilities of all types expanding their investments in wind energy through PPAs or direct ownership. Meanwhile, the steady decline in PPA prices is allowing utilities in new regions of the U.S. to take advantage of the wind boom.” The big constraint is transmission, with McGee and Hannah Hunt, senior analyst at the American Energy Wind Association, citing available capacity as a key factor that enables or blocks new projects.
For example, the $7-billion Texas Competitive Renewable Energy Zone (CREZ) transmission expansion “has been incredibly important in bringing West Texas wind to load centres like Dallas and Houston,” McGee said.
Last week, Minneapolis-based Xcel Energy Inc. unveiled plans for its 600-megawatt Crowned Ridge project in South Dakota, its largest-ever wind installation in the U.S. Upper Midwest. “Last September, Xcel announced it would increase its Upper Midwest wind generation capacity by about 60%, adding at least 1,500 megawatts of capacity, enough to power 800,000 homes,” the Star Tribune reports. “In October, the company announced it would build three new wind farms in Minnesota and one in North Dakota with a total of 750 megawatts of capacity.”
Greentech Media was out last week with five graphics that show the U.S. wind industry recovering from two slow years by posting new momentum in job creation, local land lease payments, installed capacity, overall share of electricity generation, and technological advances—particularly offshore, where the wind resource potential “is estimated to be four times the generating capacity of the entire U.S. electricity grid, according to the Bureau of Ocean Energy Management.” (h/t to Midwest Energy News for pointing us to the Utility Dive and Star Tribune stories)