Wind industry added 5 GW capacity in Q4 2015 with 75% of contracts to non-utility customers
- The U.S. wind industry built 5,001 MW of new capacity in the final three months of 2015, its second-biggest quarter ever. All told, the wind industry installed 8,598 MW of capacity for the year, 77% over 2014’s 4,854 MW, according to the 2015 Market Report from the American Wind Energy Association (AWEA).
- The U.S. wind industry built over 4,300 turbines in 37 projects across 17 different states in 2015. Texas led the nation with 1,307 MW installed. The industry now has a cumulative installed capacity of nearly 74.5 GW, and has reduced wind’s installed cost 66% since 2008, AWEA reported.
- Over 1,800 MWs of power purchase agreements for wind were completed in the fourth quarter, taking the total PPAs completed for the resource to over 4,000 MW for the year. Some 75% of the Q4 contracts and 52% for the entire year were with non-utility customers, including Procter & Gamble, General Motors, and Google Energy.
Utilities entered into PPAs representing 2,300 MW of the Q4 capacity installed, but the rest of the 5 GW that went into service was contracted by non-utility entities.
The numbers are indicative of a growing trend for large companies, who see buying power directly from renewable energy developers as a way to reduce the risk of power price increases and demonstrate environmental values. But for utilities, the practice can often result in decreased power sales to these key accounts, potentially creating what some call "the other death spiral."
In response, a number of utilities have begun offering renewable energy PPAs to companies through their own unregulated renewable energy developers or through green pricing programs, which connect key accounts with renewable generation in exchange for a small premium in power prices.
The increasing economic appeal of wind to the private sector was also demonstrated by the 3,733 MW in project acquisitions during 2015. SunEdison led in these acquisitions with 1,273 MW, followed by ArcLight Capital subsidiary Leeward Renewable Energy with 1,083 MW.
Wind energy now provides about 4.5% U.S. electricity and policies are in place that should make it possible for the industry to meet the U.S. Department of Energy forecast that it will supply 20% of the country’s electricity by 2030.
The recent extension of the $0.023/kWh production tax credit should support industry growth into the early 2020s and the Clean Power Plan’s Clean Energy Incentives should take over after that, according to AWEA Government and Public Affairs VP Rob Gramlich.
In December, wind energy-generated electricity hit a new record in Texas by meeting 45% of the Electric Reliability Council of Texas (ERCOT)'s demand on Dec. 20, 2015.