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North America Wind Industry Experiencing Unprecedented Long-Term Policy Certainty

North America is set to experience an unprecedented level of long-term policy certainty, resulting in 74.5 GW of wind power growth over the next 10 years.

These are the main takeaways from MAKE Consulting’s latest wind power outlook for North America. The long-term certainty and expected growth is thanks to recent changes in US policy towards renewable energy, highlighted most significantly in December when the US Congress approved the extension of both the solar Investment Tax Credit and the wind Production Tax Credit. In addition, MAKE Consulting also highlighted increased low-carbon energy directives in key Canadian provinces. Together, MAKE is predicting North America to see nearly 75 GW of total wind power growth over the next decade.

MAKE points to the wind Production Tax Credit (PTC), which was extended in December 2015 as a multi-year phase-out, and is expected to support a total of 44.4 GW of wind power additions from 2016 through to 2021. “However,” Ryan Moody, MAKE Market Analyst points out, “as the value of the PTC phases down after 2018, several drivers must align to sustain wind power growth in the US.”

In addition to favorable policies, MAKE also highlighted the continued cost reductions in wind turbine technology development and balance of plant costs, which together are driving down the levelized cost of electricity (LCOE) of wind power, and offsetting a portion of the lost PTC value from 2019 onward. Subsequently, MAKE expects wind power to maintain a significant share of new power generation demand moving forward, regardless of the loss of the PTC, though solar installations, with the benefit of the Investment Tax Credit, are expected to outpace wind installations from 2016 to 2025.

In the US, the Clean Power Plan is still a source of uncertainty, with legal challenges remaining a concern, “especially following the recent Supreme Court decision to grant a stay for CPP implementation.”

Canadian energy policies, particularly at the provincial level, remain the most influential driver of wind growth in the country, although LCOE and electricity exports will become more significant as time passes. Specifically, the Provinces of Ontario and Quebec comprise two-thirds of the country’s wind power outlook from 2016 to 2018, though “a substantial portion of long-term growth in Quebec hinges on increasing electricity exports to the Northeast US.”

 
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