AWEA sees wind power construction bouncing back in 2H 2013

After seeing construction of new wind power units effectively grind to a halt in the first half of 2013, the American Wind Energy Association (AWEA) is seeing another big surge on the way.

AWEA released its third quarter market report released Oct. 31.

Peaks and valleys have happened often in the wind industry where development is often tied with regular congressional renewal of the production tax credit (PTC). That’s been well illustrated in the past year.

2012 was a record-shattering year for wind power. More than 13,000 MW were installed, which brought the nationwide wind fleet to more than 60,000 MW. Part of the reason for the wind rush, however, was developer efforts to get new units into service by the end of 2012 because the PTC was expiring.

While congress renewed the PTC in January 2013 – this time requiring that units only be “in construction” by the end of the year – the wind energy pipeline was basically empty.   

Domestic wind industry construction was virtually at a standstill during the first half of 2013. AWEA figures show 1.6 MW during the first quarter of 2013 and 0 (zero) MW during 2Q13. During the third quarter, the industry installed 69 MW. The total installed wind capacity is now 60,078 MW.

But wind energy installations started to bounce back in the third quarter.

There were more than 2,327 MW under construction as of September 30, 2013. These projects span across 13 states. New construction began on 1,116 MW at 12 projects.

Texas leads with more than 539 MW under construction, followed by Michigan with 362 MW, Nebraska with 275 MW, Washington with 267 MW, Kansas with 254 MW, California with 226 MW and North Dakota with 205 MW. New York, Minnesota, Iowa, Colorado, Massachusetts and Indiana also have wind projects under construction.

Importantly, utilities are once again seeking bids for new wind generation, and this is rebuilding the development pipeline.

At least 27 requests for proposals (RFPs) were issued for wind, renewables, or generic capacity due in 2013. These RFPs span 22 states and the District of Columbia. Year to date, at least 4,178 MW of new wind builds – only 205 MW which are currently under construction – have resulted from these RFPs.

In September the Internal Revenue Service (IRS) said it will use a minimum of 5% investment and ‘continuous’ work as a guide to determine if construction has started.

Lack of certainty over federal tax policies continues to keep wind energy from reaching its full potential in the United States, AWEA said. Meanwhile, technological improvements are increasing the efficiency of turbines and driving down wind’s costs, the association said.

With thousands of megawatts of new wind power again in planning and development, wind manufacturing companies are starting to increase hiring, AWEA said.

 

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.