AWEA Report: Wind Demand High Despite Late PTC Renewal

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After coming to a standstill in the first half of 2013 due to Congressional delay in extending the federal wind energy Production Tax Credit (PTC), activity in the U.S. wind industry is ramping back up as a strong wave of utilities sign up for more wind power, according to the American Wind Energy Association’s U.S. Wind Industry Second Quarter 2013 Market Report.

Throughout 2012, the industry awaited a policy signal from Congress via a PTC extension, but that extension didn’t come until New Year’s Day of this year. As the industry had previously warned, with wind energy project timelines spanning 18-24 months, the delay had serious consequences, and its impacts have continued to ripple through the industry well into 2013.

Only 1.6 megawatts (MW) of wind power were commissioned during the first half of the year and none at all during the second quarter, yet activity is now robust in areas that indicate impending project construction—namely, requests for proposals (RFPs) and power purchase agreements (PPAs). More than 20 RFPs have been issued, and extremely competitive prices for wind energy are spurring utilities to ink contracts for even more megawatts than their initial RFPs requested. Approximately 1,300 MW are now under construction, while more than 3,600 MW in PPAs are secured. In total, utility plans for more wind announced in the first six-plus months of the year total nearly 5,000 MW.

“The market pattern playing out in U.S. wind energy right now tracks exactly with warnings sounded by the industry a year ago, and with studies that examined the consequences of not extending the PTC,” said AWEA CEO Tom Kiernan. “No industry can contribute what it’s capable of giving America without stable policy, and wind energy is Exhibit A of that reality. The industry is hard at work getting geared up to meet the strong demand for more wind energy, but if it’s going to generate more jobs and clean energy for America in the future, it simply must have the same kind of policy certainty under which other industries operate.”