The US wind energy industry is expected to install more than 30 gigawatts (GW) of new production capacity over the next three years as developers look to take advantage of the wind energy Production Tax Credit that will begin phasing out in 2021.
The Production Tax Credit (PTC) has occupied a large place in the US renewable energy industry in recent years and despite all expectations to the contrary, both it and the Investment Tax Credit were extended at the end of 2015 for another five years, bringing them to a close in 2020.
Unsurprisingly, as we near the end of the PTC, developers are rushing to make sure they benefit as much as possible.
This is specifically the case for the US wind energy industry, according to a new report from MAKE Consulting entitled North America Wind Power Outlook 2018 which predicts that US wind energy developers will install over 30 GW worth of new capacity over the next three years (2018-2020). Following this surge, MAKE Research Analyst Anthony Logan expects that there will be a drop-off in wind turbine installations, but not to the point where it falls off the proverbial cliff, as developers will still be able to access an 80% PTC in 2021 (as it drops 20% each year after 2020).
The US offshore wind energy industry, though only in its infancy, nevertheless has a healthier outlook than it did even six months ago. While the US can only boast the comparatively-small 30 megawatt (MW) Block Island Wind Farm currently in operation, recent announcements across the North East of the country made in the first half of this year have managed to increase the immediate pipeline of projects to 1.8 GW — including the 800 MW Vineyard Wind project off the coast of Martha’s Vineyard, Massachusetts, and the 400 MW Revolution Wind farm being developed by Deepwater Wind off the coast of Rhode Island. New Jersey has also committed to developing 3,500 MW worth of offshore wind by 2030, all of which leads MAKE to forecast a total of 5 GW worth of offshore wind in operation by the end of 2027.
The industry won’t have it all its own way, however, considering increasing competition from other technologies. Specifically, according to MAKE’s Outlook, “Drivers and barriers influencing wind capacity installations in the forecast period include carbon policies, interest from the commercial and industrial (C&I) sector and the rapid evolution of promising battery storage and EV technology, as well as plummeting costs of solar PV power and the extreme possible outcomes of actions undertaken by one of the most unpredictable presidents in US history.”