Three recent reports from the United States Department of Energy (DOE) show the country’s wind industry healthy but struggling to expand, leading to hopes that President Joe Biden’s Inflation Reduction Act (IRA)might change this trajectory.
“For all the fantastic growth wind energy has seen over the last decade, I’m confident that the best years in this sector are ahead of us,” said U.S. Energy Secretary Jennifer Granholm. On a call with reporters, she predicted the IRA would “breathe new life” into the wind industry, triggering a larger boom, reports E&E News.
The DOE examined how the U.S. wind sector performed over the past year, covering onshore, offshore, and distributed wind power separately. Published hours before Biden signed the IRA into law, the reports did not consider how new policies would affect their findings.
Several challenges holding the industry back include market uncertainties, supply chain disruptions, and lengthy timelines for connecting new projects to the grid, which can lead to higher development costs, E&E says.
“At the end of 2021, the reports say, a record amount of wind power, 247 gigawatts, was waiting in transmission interconnection queues, including 73 gigawatts that came onto the queue last year and 77 gigawatts from offshore wind.”
“We’re going to need to figure out how to properly move projects through the interconnection process in a faster way than we have in the past,” said Lawrence Berkeley National Laboratory senior scientist Ryan Wiser, co-author of the DOE report on onshore wind. He said interconnection queues may remain a challenge despite the IRA. Though transmission and interconnection are “key remaining barriers” for wind, according to Wiser, E&E News says congressional negotiators left investment tax credits for transmission projects off the IRA.
Still, researchers have echoed Granholm’s optimism for the wind sector. The team at Princeton University’s REPEAT Project found that the IRA’s new and extended tax credits for domestic wind production and turbine manufacturing could double American wind installations by 2026, the news story states. This would also help sidestep supply shortages from overseas, driving growth in the sector as early as 2023, said Samantha Woodworth, senior analyst for North American wind markets at Wood Mackenzie, who peer-reviewed early versions of the DOE reports.
The law’s incentives could also encourage developers to invest in the industry.
“What’s important is the long-term policy horizon,” said Aaron Barr, Wood Mackenzie’s head of onshore wind research.
“That’s really critical for the industry—to plan the business, invest in manufacturing, and invest in projects.”