By Chris Brown
In the wind energy business, it’s our job to know which way the wind is blowing. With decades of experience and a global data stream from wind turbines worldwide, we can forecast when, where and how fast the wind will blow. This allows us to predict precisely how much clean electricity – and revenue – wind can generate anywhere in the U.S. and most of the world for the next 20 years.
Being able to eliminate unpredictable spikes in energy costs is a remarkable achievement.
This certainty provides customers with a valuable marketplace commodity. Most people think of wind as variable. But today, with a combination of low-cost and long-term certainty unmatched by any other energy source — clean or fossil fuel — wind power is driving a revolution in U.S. and world energy markets. Wind energy now even competes economically with natural gas. Although gas prices are reasonable today, they don’t have the long-term predictability of wind energy.
Not surprisingly, the market is responding. Wind power just posted one of its strongest third quarters ever. A recent U.S. energy sector report found that new wind turbine installations rose 280 percent for the quarter, with three gigawatts (GW) of new wind power coming online this year. In addition, wind has been the top new U.S. energy source in 2015, supplying 41 percent of all new U.S. power generating capacity, exceeding natural gas and solar. Over the past five years, about 28 percent of new U.S. capacity came from wind.
What’s driving this demand?
There are several factors, including the environment, climate change, energy security, technology advances and energy policy. But the most important factor is price.
The real cost of wind energy has dropped 58 percent over the past five years. Wind is not only the cheapest new source of renewable energy, but in many places, it is the most affordable energy, period. This means that affordable, clean wind power is no longer a distant dream. Rather, it’s a reality customers are demanding, and we are supplying.
If it costs less, who wouldn’t choose wind?
Because the smart money is investing in wind energy, major companies such as Amazon, Apple, Google, IKEA, Microsoft and Walmart are now jumping on board. No longer is wind power viewed as merely an “alternative energy.” Now, it is a key contributor to America’s electricity grid.
That’s a big deal.
For the first time, wide adoption of wind and solar is effectively reducing fossil fuels’ capacity factor, raising their relative cost and setting in motion a “virtuous cycle” reinforcing the trend. This past year, wind improved its capacity factor by 14 percent, while natural gas dropped 12 percent.
Although the future of wind energy looks strong — the Department of Energy (DOE) reports wind energy could be the cheapest, cleanest form of electricity in all 50 states by 2050 — this future is not guaranteed.
Keeping pace with accelerating global demand for wind energy presents formidable challenges. For now, the U.S. remains the world’s leading generator of electricity from wind, with 70 GW a year. But China has passed the U.S. in total installed wind energy capacity.
Breaking the numbers down, wind energy currently supports 70,000 U.S. jobs. Vestas has approximately 4,000 workers in the U.S. producing wind turbines for this market. Total U.S. jobs for the sector are projected to reach 375,000 by 2030. And the wind powering them all is homegrown and home-blown.
The industry’s goal is 20 percent of U.S. electricity by 2030. That means generating 224 GW from wind, and 140 GW in new build capacity, in the next 15 years. As wind business leaders, we must take responsibility for reaching and exceeding these goals. I believe we can do it. But we must continue making wind the customers’ most cost-efficient energy choice.
Wind power can out-compete older entrenched energies, but it needs a level playing field to reach its full potential across the U.S. Currently, the Production Tax Credit helps ensure stable growth and provide investment certainty for an industry that’s backed by more than 70 percent of Americans, has cut clean energy costs dramatically, and creates new jobs while driving U.S. energy independence. Why wouldn’t we keep that winning strategy?
We also encourage state policymakers to look to wind energy as a low-cost, ready solution to meet their goals with the Environmental Protection Agency’s Clean Power Plan. The eight states with the highest emissions reduction targets have some of the best wind resources in the country.
In December, the world turns its attention to the COP 21 summit in Paris, which focuses intently on climate and energy security. As a low-cost, clean energy choice that’s in demand and available today, wind should hold center stage at the summit. Right now, wind power is a viable climate solution for the U.S. and the world. It is also an engine for jobs and economic growth. Wind energy shows the power of the marketplace, backed by sensible policy, to do good while also doing well.
[Chris Brown is president of Vestas-American Wind Technology, Vestas’ North American business unit.]
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