The United States wind energy industry installed a total of 612 megawatts (MW) of new capacity in the third quarter, according to the most recent figures from the American Wind Energy Association published Tuesday, paving the way for 7 states to double their capacity in the near-term.
The American Wind Energy Association (AWEA) published its US Wind Industry Third Quarter 2018 Market Report on Tuesday, revealing that a total of 612 MW of new wind capacity was installed in the third quarter, bringing year-to-date installations up to 1,644 MW, and cumulative capacity up to 90,550 MW. More importantly, there is a combined 37,964 MW worth of wind capacity currently under construction or in advanced development, a 28% year-over-year increase, and construction activity in the third quarter reached a new record of 20,798 MW after construction began on 2,180 MW in the quarter.
This has paved the way for 7 states — Arkansas, Nebraska, New Mexico, South Dakota, and Wyoming, Maryland, and Massachusetts — to have enough wind energy currently under construction that it will more than double their capacity upon completion.
“The wind is always blowing in the U.S. and the latest wind turbine technology helps affordably and reliably put more of that natural resource to work,” said Tom Kiernan, CEO of AWEA. “With projects underway in over 30 states, wind is rapidly expanding as a major source of American energy, good jobs and clean air.”
Texas led the way with 216 MW of new capacity installed in the third quarter, bringing its 2018 cumulative new capacity up to 880 MW over 2018. Oklahoma installed a total of 199 MW for the third quarter, followed by Ohio with 108 MW, New York with 78, Nevada with 7 MW, California with 3 MW, and Alaska with 1 MW. Oklahoma’s 199 MW brings it into second place in terms of cumulative 2018 capacity brought online, but its third-quarter capacity is all it has brought online this year.
2018 Wind Power Capacity Installations, Top States
The third quarter also saw the first firm orders placed for 4 MW land-based turbines — turbines nearly twice as powerful as the average installed through 2017. Specifically, the average utility-scale wind turbine installed in 2017 had a capacity of 2.32 MW, but as prices continue to decline, larger wind turbines will become more common, delivering greater power to the grid. To put the future in context, the US boasts only two land-based wind farms using turbines rated above 3.5 MW, but with 4 MW coming on to the market that is likely set to change over the near-term. The report also highlighted the evolution of wind turbines in the US sector, with longer blades helping the turbines to capture more of the wind, while new wind farms are also making use of big data and machine learning to improve power output and reduce downtime.
The quarter also saw a total of 2,467 MW worth of new Power Purchase Agreements (PPAs) signed, bringing the total contracted wind power up to 7,550 MW for the year — exceeding total PPA volume in each of the past four years. The electricity purchased through these PPAs included 945 MW signed by first-time buyers. Meanwhile, utilities signed contracts for 1,522 MW of wind capacity in the third quarter.
However, unless the fourth quarter yields record growth, total installed capacity for 2018 will be again down on previous years for the third year in a row.
US Annual and Cumulative Wind Power Capacity Growth
That being said, Anthony Logan, a Research Analyst for Wood Mackenzie Power & Renewables, is less troubled by 2018s figures to date: “I wouldn’t be overly concerned with annual totals based on installs through Q3,” Logan explained. “On average since 2010, less than a third of all projects grid-connected in a given year are grid-connected by the end of Q3. From our project pipeline visibility, it is highly likely 2018 will exceed 2017 in terms of project installations, though I should point out our project methodology for calling a project “operational” is different from AWEA’s so we often have differences on annual totals.”
However, to beat out 2017’s total, the US wind energy industry needs to complete the installation of 5,373 MW in the fourth quarter alone (based on AWEA’s 2017 and Q3’18 figures). For comparison, in 2017, the fourth quarter only saw 4,125 MW brought online, meaning that 2018 would need to beat that by more than 1 gigawatt (GW). The year before that, 2016, the fourth quarter saw a total of 6,478 MW brought online, bringing the year’s total up to 8,203 MW. Obviously, therefore, it’s not impossible for the US to have breakout fourth quarters that belie the state of the industry through the rest of the year, but in this instance, only time will tell, and it’s a large hill to climb.
I also reached out to the AWEA to comment on the current state of US wind, and what we can expect from the fourth quarter.
“American wind power’s strong growth continued in the third quarter with a record amount of capacity under construction,” said Celeste Wanner, Senior Analyst, American Wind Energy Association. “We don’t produce in-house forecasts, but the fourth quarter traditionally has the largest volume of capacity installations and delivery expectations point to a stronger fourth quarter than in 2017. AWEA only reports projects once they have begun construction or entered advanced development, having achieved a significant milestone such as finding a power offtaker or ordering turbines. A project must have strong fundamentals to reach this level of investment and these projects are well on their way to becoming operational in the near term.”
In the long-term, it will be up to actual performance to determine the state of the US wind energy industry — because better performance will beget better performance, and lower performance will likely beget lower performance. The US wind energy industry has reliably installed incremental amounts during the first three quarters of the year, and finished it off with a bang in the fourth — but this has resulted in a downward trend in capacity installations. Whether 2018 can kick this trend will only be known once we know.
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