Wind Builds Momentum – 2/22/16

The wind energy industry has grown significantly since we entered the 21st century. According to data from the GWEC, installation of new wind capacity has accelerated to the point that capacity appears to follow an exponential curve as shown below.

WindGrowth

Growth trends favoring wind are especially impressive given that natural gas and coal prices falling greatly in recent years has had little effect. So why has it done so well? Falling costs have definitely been a major factor. The cost of wind power has come down by 60-70% for unsubsidized wind in the last five years as turbines become less expensive to produce and more efficient in harvesting energy. Seeing wind as one of the few cost-effective solutions to quickly reduce carbon emissions and water use, many governments have also pushed utilities to adopt the renewable energy source. Low volatility in price, independence from foreign suppliers, and emission reduction commitments have led those governments to provide the subsidies and tax credits that have spurred growth. The US Department of Energy Wind Vision report shows a path for wind power to rise from supplying 5% of US electricity needs to 10% by 2020, and to 20% by 2030.

Offshore wind farm capacity has also been increasing at an exponential pace since 2000. Global cumulative capacity only passed the 1000 megawatt threshold in 2007 but, by 2014, installation has accelerated rapidly as capacity neared 9000 megawatts thanks to falling costs and increased private and government investment. Offshore wind farms benefit from stronger winds better matched to times of peak demand than those found over the land as well as being located closer to coasts where populations and industry tend to congregate. The UK (5 GW), Germany (3.3 GW), and Denmark (1.3 GW) have had some of the most successful offshore industries in Europe where even low gas prices haven’t been able to stop record amounts of investment flowing into wind.

All renewables are set to make significant gains as President Obama’s Clean Power Plan returns to lower courts after the Supreme Court issued stay earlier in February with out commenting on its merits. With the vacancy left by the sudden passing of Justice Antonin Scalia, the Supreme Court is split 4-4 with little chance of a justice being replaced before the issue returns for a ruling in fall. The loss of a conservative justice is expected to greatly increase the chances of the Clean Power Plan surviving judicial review and puts pressure on states to find ways to cut emissions to meet stricter EPA regulations. Though a Republican in the White House appointing another conservative justice would be able to take steps to roll back the new regulations, the GOP has so far failed to unite behind a single, strong candidate.

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