American Wind Energy Association
FOR IMMEDIATE RELEASE: October 28, 2004
CONTACT: Kathy Belyeu (202) 383-2520
Christine Real de Azua (202) 383-2508
TAX CREDIT EXTENSION PUTS WIND INDUSTRY BACK TO WORK;
2005 EXPECTED TO BREAK CAPACITY INSTALLATION RECORDS
New wave of projects brings clean energy, investment, jobs to rural
With the extension of the federal wind energy production tax credit in
September, capacity installations in 2005 look likely to beat all
previous records, the American Wind Energy Association (AWEA) said today
in its quarterly U.S. market outlook. The previous high for new wind
power capacity installations in one year was 1,696 megawatts (MW) in
2001. Most industry participants agree that 2005 will be a better year,
with some predicting installations to exceed 2,500 MW.
Conditions are right for next year to be a record-breaking year, said
AWEA Executive Director Randall Swisher. "We will see what the U.S.
industry can do at a full-speed run for the next fourteen months. As
natural gas prices continue to demonstrate volatility, and coal prices
are increasing as well, wind power looks more attractive as a way to
diversify a utilitys supply portfolio."
The slow-down in installations in 2004 that resulted from the
expiration of the production tax credit (PTC) means that many projects
that have been in the development pipeline are now ready to move forward
quickly. Wind power project developers and wind turbine and component
manufacturers are now racing to lock up supply contracts for the coming
At the same time, rising and volatile natural gas prices make wind
energy attractive in terms of the long-term stable energy price that the
technology can offer. Once a plant is built, it requires no fuel and
produces no harmful emissions. According to the Energy Information
Administration, in the best wind resource areas such as the plains
states and the upper Midwest, wind energy is the lowest-cost new
electricity resource (with the PTC in place) when natural gas prices
rise above about $3.50 per thousand cubic feet. On the New York
Mercantile Exchange, natural gas prices topped $7 per thousand cubic
feet in October, and most experts expect it to continue in the range of
$5 for the foreseeable future.
The more wind energy capacity is installed, the more it will help to
reduce the current natural gas supply shortage in the U.S., according to
AWEA. The increasing use of natural gas to power electric generating
plants is preventing the nation from building up its storage levels
during the summer. But in many areas of the country where wind farms are
generating electricity, they are directly helping to conserve vital
natural gas supplies.
"We estimate that the wind farms already in place, and those that will
be installed by the end of 2005, will be saving over 0.5 billion cubic
feet (Bcf) of natural gas per day in 2006," said Swisher. "Using
conservative growth estimates of 3,000 MW installed every two years for
the next four years, the U.S. could top 15,000 MW of installed wind
power capacity by the end of 2009, which would save nearly 0.9 Bcf/day
by the end of this decade." [A graph of natural gas estimated to be
saved by wind generation is in the attached Word release]
Because the tax credit was extended relatively late in the year, AWEA
expects the U.S. to install approximately 480 MW of new capacity in
2004, well above its previous estimate of 350 MW but far below previous
strong years such as 2001 (1,696 MW) and 2003 (1,687 MW). The full list
of expected installations throughout the year is attached.
If installed wind power capacity were to consistently expand at a rate
of 18% per year, AWEA said, six percent of the nation's electricity
could be generated by wind power by the year 2020, resulting in over
$100 billion of investment, in addition to saving millions of cubic feet
of natural gas. AWEA is continuing to pursue policies - such as a
long-term PTC extension and federal and state renewables portfolio
standards (RPS) - that will move the wind industry beyond the
boom-and-bust cycles that have resulted from short-term PTC extensions
in the past.
AWEA, formed in 1974, is the national trade association of the U.S.
wind energy industry. The associations membership includes turbine
manufacturers, wind project developers, utilities, academicians, and
interested individuals. More information on wind energy is available at
the AWEA web site: www.awea.org .