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US wind installations to exceed gas in 2012
- 11 years ago (2012-12-24)
- Junior Isles
US Wind-turbine installations in 2012 are likely to exceed natural gas installations, as developers hurry to complete projects before a renewable energy tax credit expires.
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Newly installed wind capacity had reached 6519 MW by Nov. 30 in the US, beating 6335 MW of gas additions this year, and more than doubling that of coal, according to data from Ventyx Inc.
US authorities have yet to renew the wind production tax credit which incentivises wind farms completed before Dec. 31. The rush to access the subsidy is looking to overwhelm even resurgent interest in gas-fired stations, which are benefiting from a collapse in commodity prices due to hydraulic fracturing.
A glut in wind farm connections during November and December could well double the amount of wind capacity added in 2012 to as much as 12 GW, according to Bloomberg New Energy Finance.
“Wind will very likely beat gas, but it may be close,” says Amy Grace, US wind analyst for Bloomberg New Energy Finance. “It’s very likely that we get over 8 GW for 2012.”
Promising installation figures show that wind has gained a firm foothold as a valuable energy source, according to Jacob Susman, chief executive officer at wind developer OwnEnergy Inc.
“Five years ago we had to drag utilities in kicking and screaming. Now they’ve got teams of experts who understand its value,” he continued.
The rapidly expiring tax credit pays wind farm owners 2.2 cents per kWh of power they produce over 10 years, but only projects which are producing power by Jan. 1 will qualify.
New Energy Finance forecasts that wind turbine installations may fall 88 per cent in 2013 to a minimum of 1.5 GW unless Congress extends the incentive scheme.
Competing generators oppose plans to extend the subsidy, with people such as Joseph Dominguez, senior vice president of nuclear owning Exelon Corp., arguing that the recent strength of installations demonstrate that wind can survive without subsidy.
This obviously underplays the important role the tax credit has played in driving the very wind installations Dominguez uses to measure success. Indeed, US subsidies are still substantially below those paid in Europe under Feed-in-Tariff (FiT) schemes.
“The reason we’re having an historic year is because the incentives are in place,” said Elizabeth Salerno, chief economist at AWEA. “There’s more at stake now than there ever has been.”