US wind developers built 7.6GW of new capacity in 2018 as the industry gears up for the boom years of 2019-20, while NextEra Energy reclaimed its position as the industry’s top developer, according to the American Wind Energy Association (AWEA).
The installation figure of 7,588MW is solid though by no means historic, coming in the middle of the pack for performances over the last 10 years. But it must be viewed in the context of an anticipated surge of construction this year and next, as developers look to build projects as late as possible while still claiming the full production tax credit (PTC), to take advantage of the latest turbine technology.
The PTC begins stepping down for newly completed projects at the beginning of 2021, putting intense pressure on turbine manufacturers, logistics operators and construction companies to deliver historically big years in 2019 and 2020.
There is now more than 35GW of wind capacity either under construction or in advanced development across the US, according to Washington DC-based AWEA’s newly released US Wind Industry Fourth Quarter 2018 Market Report.
Much of that 35GW will be aiming for completion this year and next, compared to the all-time annual installation record of 13.3GW set back in 2012 – a spike also fueled by the expiration of the PTC.
Some developers are likely to run into supply-chain bottlenecks as they race to finish projects by the end of next year, industry experts have warned. However, such pinch points may also open opportunities for turbine OEMs that have otherwise struggled in the US market in recent years.
Meanwhile, many expect 2021 to remain a huge year for US wind, even as the PTC steps down to 80%.
Behind the 2018 numbers is a whirl of positive signs for the American wind industry as it braces for life without the PTC, worth an inflation-adjusted $24/MWh for 10 years at its full value.
The amount of signed wind power-purchase agreements (PPAs) reached an all-time high last year, at 8.5GW, driven by both utility and corporate customers, underscoring the relentless competitiveness of wind within the US power market.
Demand for renewable power from US corporations continues to surprise market observers, with non-utility customers like AT&T, Walmart and ExxonMobil signing 4.2GW of wind PPAs last year, shattering the previous record, AWEA says. Utilities signed another 4.3GW of wind PPAs.
The offshore market, too, had an extraordinary year, with Vineyard Wind winning an 800MW off-take contract in Massachusetts, a trio of developers paying $405m for new lease zones in New England waters, and several large requests for proposal underway in New Jersey and New York set to deliver more big contracts in the next few months.
“Wind power is on strong footing, with trend lines – rising consumer demand, falling costs, improving technology – all pointing in the right direction,” says AWEA chief Tom Kiernan.
Coming off an uncharacteristically weak 2017, NextEra Energy jumped back to the top of the development ranking in 2018, completing 1.4GW of new capacity across five states – the industry’s biggest performance in years. NextEra also has more capacity in the near-term pipeline than any of its peers.
Just behind NextEra in completed projects was Berkshire Hathaway Energy, owner of Iowa utility MidAmerican Energy, followed by Enel Green Power, Xcel Energy and EDP Renewables.
As is typical, the fourth quarter overshadowed the rest of the year for project completions, with 5.9GW crossing the finish line at the end of the year.
Among the late-year finishers were the 600MW Rush Creek complex built by Invenergy for utility Xcel in Colorado, 618MW built by Enel Green Power across two projects in Kansas and Nebraska, and a 300MW wind farm built by NextEra in Texas for corporate client AT&T.