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Market forces


The U.S. wind power industry is facing uncertain times. With 2011 capacity additions having risen from 2010 levels and with a further sizable increase expected in 2012, there are – on the surface – grounds for optimism. A new report; published recently by the US Department of Energy, looks at complete data from 2011 to give an overview of the current state of the industry, and an idea of what the future might hold for wind power in America

Key factors driving growth in 2011 included continued state and federal incentives for wind energy, recent improvements in the cost and performance of wind power technology, and the need to meet an end-of-year construction start deadline in order to qualify for the Section 1603 Treasury grant program. At the same time, the currently-slated expiration of key federal tax incentives for wind energy at the end of 2012 – in concert with continued low natural gas prices and modest electricity demand growth – threatens to dramatically slow new builds in 2013.

Key findings from this year’s “Wind Technologies Market Report” show that there has been significant growth, and greater return on investment as a result of improving technologies and understanding within the industry of how to optimize developments. However, the threat to the PTC also suggests projects face derailment going forward.

Wind power additions increased in 2011, with roughly 6.8 GW of new capacity added in the United States and $14 Billion invested. Wind power installations in 2011 were 31 per cent higher than in 2010, but still well below the levels seen in 2008 and 2009. Cumulative wind power capacity grew by 16 per cent in 2011, bringing the total to nearly 47 GW.

The report also states that wind power comprised 32 per cent of U.S. Electric generating capacity additions in 2011. This is up from 25 per cent in 2010, but below its historic peak of 42-43 per cent in 2008 and 2009. In 2011, for the sixth time in the past seven years, wind power was the second-largest new resource (behind natural gas) added to the U.S. electrical grid in terms of gross capacity.

 

 

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