November 15, 2018 — A coming-of-age moment is bearing down on the U.S. wind power industry, and proponents say it’s ready—well, mostly ready.
For a quarter-century, the industry has been supported by federal tax credits that helped it attract $250 billion in investments and create 100,000 jobs, according to the American Wind Energy Association. That support ends next year, but analysts and executives say the credits have done what they were supposed to do: make the industry competitive.
Established supply chains, taller towers, bigger rotor blades, and the use of artificial intelligence to boost efficiency have made wind power cheaper than coal and on a par with natural gas. And soon enough, offshore wind farms could expand the renewable energy source’s influence beyond rural states such as Texas and Kansas to the high-population corridors along the East and West coasts. “Wind has matured now,” says Chuck Grassley, the Republican senator from Iowa who first championed the tax credits in 1992. “It’s ready to compete.”
Since North America’s first offshore wind farm opened off Rhode Island in late 2016, the industry has secured a dozen offshore leases from the federal government to build similar operations elsewhere. Dominion Energy Inc. got in under the federal tax credit deadline with its plan to build a pilot wind farm off the coast of Virginia Beach by late 2020. On Nov. 2, state regulators approved the plan for a two-turbine farm expected to cost $300 million and generate 12 megawatts of electricity, enough to power about 3,000 homes.
Success could help Dominion in its quest to build turbines that would generate 2 gigawatts of power on an adjacent site. “Utilities make 20- and 30-year decisions, and they’ve kind of voted with their pocketbook,” says Chris Brown, president of turbine maker Vestas North America. “We’re ready to compete in a subsidy-free world.”
In 2007 wind was the prevalent renewable energy source in just seven states. By last year that had grown to 16 states, according to a September report by the U.S. Energy Information Administration. In Kansas, wind generated 36 percent of state power in 2017, putting it just behind coal, at 38 percent. In the first six months of 2018, though, wind jumped ahead, 42 percent to 35 percent, the EIA report showed.
Development of new plants will likely slow without the benefit of the credits, analysts say, but the industry has momentum on its side. “The fact is, there will be a slowdown,” says Declan Flanagan, chief executive officer of renewable power developer Lincoln Clean Energy LLC. “Obviously it’s a value stream that goes away. We’ve got to make it up by competitiveness.”
It won’t be easy. While developers have spent $1.1 trillion globally on new wind farms over the past dozen years, more money is going into solar energy systems these days. And the massive turbines needed to generate gigawatts of power, which can rise 600 feet in the air, have spurred protests both on- and offshore, slowing development. The complaints: The turbines are unsightly, and there are concerns the offshore plants will hurt fishing, a key East Coast industry.