Industry’s Q3 results: American wind power on the rise, with 20 gigawatts more on the way
Oct 27 2016
Iowa becomes the first state powered by over one-third wind
DES MOINES, Iowa, October 27, 2016 — American wind power gained tremendous momentum in the third quarter of 2016 as states, utilities and ratepayers from coast to coast increased their investment in the energy source America agrees on.
Over 20 gigawatts (GW) of wind power capacity are now under construction or in advanced development, according to the American Wind Energy Association’s (AWEA) U.S. Wind Industry Third Quarter 2016 Market Report(Opens in a new window), released today at the Iowa State Capitol with Gov. Terry Branstad, Lt. Gov. Kim Reynolds and industry leaders.
“To put the 20 gigawatts of wind capacity under development in perspective, consider that the entire U.S. wind fleet just recently passed 75 gigawatts,” said Tom Kiernan, CEO of AWEA. “This enormous growth reflects what we hear from states, utilities and Fortune 500 companies all the time – wind power is increasingly their first choice for energy. It’s a great deal for customers, invests in communities that host turbines, and helps all Americans breathe easier. That’s the wind power success story Americans know and love.”
That success story is clear in Iowa. Wind power supplied over 35 percent of the state’s electricity generation on a 12-month rolling average from the end of August 2015 through the end of August 2016, according to new data from the Energy Information Administration.
“Iowa is the nation’s leader in wind energy. I’m thrilled to see the third quarter report from the American Wind Energy Association detail that Iowa now gets 35 percent of our electricity generation from wind, far ahead of any other state,” said Iowa Gov. Terry Branstad. “Iowa is blessed with tremendous renewable resources and is well positioned to continue drawing companies to Iowa who are seeking low energy costs. Wind energy is responsible for over $12 billion of investments in the state, which powers Iowa’s economy and benefits Iowa families.”
Iowa Lt. Gov. Kim Reynolds added, “The significant milestone that over 35 percent of our electricity produced in Iowa comes from wind underscores our continued momentum to advance renewable energy and clean energy technology. And with over 3,100 megawatts of wind under construction or development right now, we are poised to propel our renewable energy economy even further. Additionally, this news will help Iowa keep the competitive advantage we want to maintain. But it is not just about electricity production itself — wind supports nearly 7,000 Iowa jobs, including STEM jobs for engineers and jobs in manufacturing and leasing payments diversify income in rural Iowa.”
Wind project developers reported 13,563 megawatts (MW) under construction across the U.S. and 6,717 MW in advanced development, which combined is a near-record 20,280 MW of additional wind capacity coming soon. An already strong pipeline of projects was augmented in the third quarter by 2,501 MW of new construction announcements and 1,216 MW of wind capacity entering advanced development.
The billions of dollars in wind development currently underway in Iowa and the Midwest are possible because of forward-looking investments in transmission in recent years. These lines are called the Multi-Value Projects because they improve electric reliability, reduce electric bills for consumers, and allow new renewable resources to connect to the power system.
The Competitive Renewable Energy Zone (CREZ) transmission lines in Texas are another example of infrastructure investments paying off.
Transmission lines more than pay for themselves by providing up to four dollars in benefits for every dollar invested. Expanding these pro-active investments in transmission and making new ones will enable states to continue adding wind power and other cost-effective energy resources to the grid.
“Wind is winning. Wind is winning here in Iowa, in America, and in the rest of the world,” said Chris Brown, AWEA Board Chairman and President of Vestas Americas. “The unprecedented five-year extension of the Production Tax Credit at the end of last year was a beacon of certainty for our industry, and ended the boom-bust cycles we’ve previously weathered. Wind has come from green to mainstream, and that’s because it’s really become an irresistible deal, for big purchasers and for everyone who pays an electric bill. And it’s becoming an even better deal all the time.”
The performance-based tax credit is an incentive for every per kilowatt-hour of electricity produced – so more efficient turbines capture more value from the credit. The falling cost of wind power and policy certainty has enabled wind power to rapidly scale up, paying big economic development benefits across America.
The wind industry installed 895 MW during the third quarter of 2016, bringing year-to-date installations to 1,725 MW. Wind projects came online in seven states during the third quarter: Texas, Minnesota, Maine, Rhode Island, Oregon, Massachusetts and Utah.
Project developers signed 729 MW of Power Purchase Agreements (PPA) during the third quarter. PPAs are long-term contracts for the purchase of energy, in this case from a wind farm. Non-utility purchasers of wind energy, including Fortune 500 companies like Amazon, Johnson & Johnson and Target, represent 33 percent of total project capacity contracted for the year. Combined utilities and non-utilities have signed PPAs totaling 3,193 MW so far this year, a 39 percent increase in activity compared to the same time period last year.
Strong market activity in the third quarter confirms wind power as a mainstream energy source that is very much in demand. The price consumers pay for wind fell by two-thirds in six years thanks to technological innovation, allowing turbines to reach stronger, steadier winds, and improved computer controls that make turbines even more efficient.
The growth of wind power in Iowa has been achieved while boosting the state’s economy. Wind energy in Iowa has attracted $12 billion in private investment and supports up to 7,000 jobs, contributing to economic development opportunities for rural communities. Iowa has the seventh lowest electricity prices in the country and wind investments being made today will help keep it that way by locking in a low, stable price for electricity.
Iowa alone accounts for 3,100 MW of the national 20,000 MW under construction or advanced development. That development pipeline means Iowa is set to grow 50 percent from its current 6,365 MW of installed capacity. More wind is a win-win for Iowa. Adding another 10,000 MW of wind in Iowa would save consumers an average of $500 million a year over the next 25 years(Opens in a new window), according to a recent report from the Wind Energy Foundation and AWEA.
Much of the additional wind capacity planned in Iowa can be attributed to MidAmerican Energy and Alliant Energy. New advanced development announcements during the third quarter include Alliant Energy’s planned 500 MW Whispering Willow expansion(Opens in a new window), along with utility board approval of MidAmerican Energy’s 2,000 MW Wind XI project(Opens in a new window).
MidAmerican Energy and Alliant Energy shared why they are making major investments in wind:
“We have a bold vision for our energy future,” said Michael Fehr, Vice President, Resource Development, MidAmerican Energy. “Our customers want more renewable energy, and we couldn’t agree more. Once our Wind XI project is complete, we will generate wind energy equal to 85 percent of our annual customer sales in Iowa, bringing us within striking distance of our 100 percent renewable vision.”
“Alliant Energy is proud to partner with AWEA to make significant, long-term investments in wind,” said Terry Kouba, Vice President at Alliant Energy. “Our wind energy projects cost-effectively increase renewable resources as we transition to an increasingly balanced energy mix.”
New wind projects in Iowa and across the U.S. are keeping 21,000 American manufacturing workers busy. Companies like Siemens, TPI Composites, and Trinity Structural Towers operate facilities in Iowa that boost the local economy with well-paying jobs.
“Iowans are taking the lead in writing America’s wind energy success story,” said Tony McDowell, Plant Manager at the Siemens blade factory in Fort Madison. “Siemens made a substantial investment in Iowa when we opened our wind blade factory a decade ago. We’re proud that skilled workers at our Lee County facility have produced more than 14,000 blades for projects across Iowa and the nation, as well as for global customers.”
Wind farms provide a unique economic development opportunity that directs billions of dollars in private investment to low-income rural communities while also providing land lease payments and significantly expanding the tax base. Bloomberg Businessweek recently called wind power “the new corn for struggling farmers”.(Opens in a new window)
More than two-thirds, or 68 percent, of the current installed wind capacity in Iowa (4,357 MW) is located in low-income counties. The installed wind capacity in low-income counties is equivalent to $8.3 billion in capital investment and annual land lease payments between $10-15 million.
Stories like this across the nation reflect the reality of rapidly growing wind power, with new commercial scale wind projects completed in 13 states, from Maine to Oregon, since the start of 2016. Wind power is a 50-state industry, with turbines installed in 40 states and over 500 active manufacturing facilities located in 43 states.
Texas continues to be far and away the national leader for installed wind capacity and absolute wind energy generation, though Iowa produces a higher share of electricity from wind than any other state. In the third quarter Texas became the first state to surpass 18,000 MW of installed wind capacity with 620 MW of wind capacity installed.
Texas isn’t the only state surging ahead. Kansas, Oklahoma and New Mexico all have over 1,000 MW of wind capacity under construction right now. Iowa, North Dakota and Missouri are close behind with 500 MW or more under construction. Missouri’s 500 MW of wind project construction activity is enough to more than double the state’s 459 MW of existing capacity.
Recent polls find Americans are united behind wind power, reflecting its contributions to the American economy and clean air. Nearly 85 percent of adults support expanding wind power(Opens in a new window), according to a national survey published this month by Pew Research Center. Other recent surveys suggest that the more Americans get to know wind power, the more they like it. A July poll of likely voters in Iowa’s Third Congressional District found 91 percent of respondents support wind energy(Opens in a new window).