United States

Wind Energy in the United States

us.jpgThe U.S. wind industry achieved near-record growth in 2016, as the renewable energy Production Tax Credit (PTC) was renewed in December 2015 after having expired in January 2015. The PTC is an inflation-adjusted per-kilowatt-hour tax credit for electricity generated by qualifying facilities. The extension included a phase-down approach for wind projects commencing construction after 31 December 2016, providing an incentive to start construction on new wind projects in 2016. Wind power generating capacity now exceeds conventional hydropower capacity in the United States.

The U.S. wind industry also embarked on a new era, as the first offshore wind facility—the 30-MW Block Island wind farm, located off the coast of Rhode Island—began commercial operation. A joint report of the U.S. Department of Energy (DOE) and the U.S. Department of the Interior, the National Offshore Wind Strategy, found a technical resource potential of more than 2 TW of offshore wind capacity, capable of generating 7,200 TWh of wind power per year. A DOE-funded report on distributed wind also found a significant addressable resource potential, with 3 TW of capacity capable of generating 4,400 TWh of wind power, greater than current U.S. power consumption.

Renewable Energy Targets

DOE aims to reduce the cost of utility-scale, land-based wind power to 0.052 USD/kWh (0.049 EUR/kWh), without incentives, by 2020, and to 0.031 USD/kWh (0.029 EUR/kWh) by 2030. The cost target for fixed-bottom offshore wind power is 0.149 USD/kWh (0.142 EUR/kWh) by 2020 and 0.093 USD/kWh (0.088 EUR/ kWh) by 2030. These cost targets are essential for enabling a greatly expanded level of deployment in every U.S. state and achieving high levels of wind energy penetration on the U.S. power grid.

Although the United States has no specific deployment goals, DOE has performed a technical examination of the feasibility of achieving rapid growth in the U.S. wind industry. DOE’s Wind Vision report examines a scenario trajectory of supplying 10% of the nation’s electrical demand by 2020, 20% by 2030, and 35% by 2050. The report found that these goals could be met by reducing wind power costs, expanding the developable areas for wind power, and deploying wind in ways that increase economic value for the nation, including
support for U.S. jobs and manufacturing.

Policies Supporting Development

The inflation-adjusted PTC for wind power was 0.023 USD/kWh (0.022 EUR/kWh) in 2016. However, the wind power PTC will gradually phase down over the next three years, dropping 20% per year based on when the facilities commenced construction. Wind facilities built after 2019 will earn no PTC.

The federal Investment Tax Credit (ITC) for small wind power (≤100 kW) expired in 2016. The ITC for large wind power was 30% in 2016, but like the PTC, it will phase down by 20% per year. In contrast, state-based renewable portfolio standards (RPSs), which set requirements for the use of renewable energy, are now in place in 29 states, and some states are making their RPSs more aggressive. In addition, a wide variety of tax benefits, grants, rebates, financing options, and special tariffs are available at the state and local levels.