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Wind: Second Only To Natural Gas

Posted by Fereidoon P. Sioshansi on the May 13th, 2008

From the May 2008 issue of EEnergy Informer.

Pulled by mandates and pushed by incentives, wind continues to grow

With 5,000 MW added in 2007 alone, US installed wind capacity now stands at 16,800 MW. Propelled by production tax credits (PTC) and mandated by renewable portfolio standards (RPS), now in effect in 26 states, wind has been the second biggest source of new electricity generation behind natural gas in the past 3 years in the US, according to the latest annual survey of the American Wind Energy Association (AWEA).

Surprisingly, Iowa has the highest penetration, with 5.5% of its electricity coming from wind. In absolute terms, Texas has the lead, significantly ahead of California, long a leader.

FPL Energy is the country’s biggest owner of wind parks, followed by Iberdrola, the Spanish utility and Electricite de Portugal (EdP).

Wind would grow even faster if it were not for three main obstacles.

  • First is that the best wind resources are typically in remote places far from the load centers, requiring significant investment in transmission network. Studies in California, Texas and the Northeast have identified the limitations imposed by transmission bottlenecks (see article on transmission in this issue).
  • Second is the on-again, off-again nature of PTCs, which are expected to expire at the end of 2008, making long-term planning and financing impossible. AWEA’s Executive Director Randall Swisher is hopeful that Congress would extend the PTC. But politicians appear to be fond of 1-2 year extensions, for reasons that make little sense to anyone outside Washington, DC.
  • Third, as wind becomes a significant resource in many states, its integration into the utility network becomes problematic because it is not dispatchable, nor entirely predictable.

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