Analyst: 12 percent wind growth expected in 2011

MAKE Consulting's annual Wind Power business study says to expect 6.25 GW of new wind installations in the U.S. in 2011; uncertain policy environment clouds post-2012 picture.

MAKE Consulting (Chicago, Ill., USA) announced on May 20 that it has published its annual U.S. Wind Power business study for 2011. Analyzing current macro-economic factors, regional and national regulatory frameworks and project pipelines, MAKE predicts a conservative 12 percent growth in new installations for 2011.

MAKE reports that installations fell from 9,922 MW in 2009 to 5,573 MW installed in 2010, a 44 percent drop which could have been much worse, had the U.S. Congress not passed the Investment Tax Credit (ITC) and convertible cash grant in 2009.

Development has picked up again, wind turbine orders have seen upward recovery, and the U.S. retains some of the best wind resources, open land for development, and a population eager to support clean power. However, austere macro-economic forces, such as low electricity demand, lower electricity prices, decreased demand from utilities and recent technological advances in shale-rock natural gas extraction threaten to undermine wind’s competitive advantage. Future growth will substantially hinge on the country’s fleeting policy support, in the form of short-term subsidies and tax credits.

MAKE forecasts a slight 12.4 percent uptick in 2011 to 6.25 GW, with additional growth forecast for 2012 as a last volley of projects pass through the closing ITC policy window (current ITC expires Dec. 31, 2012). MAKE takes the cautiously optimistic view that the U.S. Congress will not allow the ITC to lapse in 2013 as it did twice in 2001 and 2003, which led to massive drops in yearly capacity additions in each subsequent year.

“The industry has gone from a niche novelty to a mainstream juggernaut in the last five years,” says MAKE’s Daniel Shreve, director Americas. “While an era of austerity has settled on Capitol Hill, the creation and retention of jobs is arguably of higher importance to lawmakers than deficit reduction. Congress will find it very difficult to say no to continued support for wind energy and the thousands of jobs it supports in the U.S.”

Furthermore, policy at the state level will continue to provide some foundational support for wind power. MAKE’s modeling of the 29 state-level mandates for renewables during the forecast period, 2011-2016, shows that the policies could
technically support an average basement level of several megawatts per year. MAKE predicts a 6 percent CAGR through 2016, assuming relatively steady drivers and barriers, both which are analyzed in detail in the report.

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