Despite spectacular growth in recent years, the wind energy industry has come under severe pressure with the upcoming expiration of the U.S. government's popular wind production tax credit. While the end of this policy poses a looming threat to the industry, however, the U.S. Energy Information Administration reports that the country could blow past the all-time record for annual wind energy capacity additions.
The PTC, a credit of 2.2 cents per kilowatt-hour, is extended only to wind turbines that begin operation before the end of 2012, giving developers a strong incentive to hurry the pace of installations in order to meet the deadline.
According to numbers provided to the agency by businesses within the industry, total wind capacity additions could reach as high as 12 gigawatts if all projects currently planned for completion by the end of the year are finished successfully.
That number would nearly double total wind installations from 2011 and would add nearly half-again as much as natural gas capacity additions from this year, accounting for around 45 percent of all new capacity. Natural gas has been a steady competitor of the surging renewable energy sector and has been the largest single source of added capacity for the past two years.
The industry's concern about the expiring tax credit can be seen clearly in the progression of planned wind project completions for 2012 over the course of the year. At the end of last year, all planned projects amounted to less than 6 gigawatts. By the end of the first quarter, that number had shot up to more than 8 gigawatts, then steadily upward to the current total.
Even now, fewer than half of the proposed projects have been completed, with most the new wind farms still rushing toward completion in the last month before the deadline.
According to the EIA's Annual Energy Outlook 2012, renewable energy and other capacity additions are expected to slightly beat out natural gas through 2015, before the increasingly plentiful fossil fuel takes a commanding lead in new generation.
To this point, renewables have been dominated by biomass and hydroelectric plants, but wind is taking an increasingly prominent role in the industry. The growing reliance on this highly intermittent renewable energy source will complicate the current generation and transmission picture. Genscape's extensive monitoring system can help provide accurate power data to better anticipate the effects this new generation will have on markets.