US wind power consumption forecast to grow

wind turbinesUS wind-generated electricity consumption is expected to grow at a high rate over the next two years, according to the latest industry forecast for First Research from INFORUM.

Growth in wind power has been encouraged in recent years by tax breaks and green pricing programs, which allow energy customers to choose renewable energy sources for a premium price. Electricity generation from wind totaled 120 billion kilowatt-hours in 2011, up from 6 billion in 2000. Wind turbines now generate about 3 percent of total electricity in the US, according to the Energy Information Administration.

US wind electricity energy consumption increased 22 percent in 2012 and 26 percent in 2011, according to First Research. Growth will slow to 14 percent in 2013 and possibly 6 percent in 2014. Much of the industry’s future growth depends on a production tax credit (PTC), which is set to expire at the end of 2012. The PTC provides a 2.2 cents tax credit per kilowatt-hour of electricity production. The American Wind Energy Association, which is urging a tax credit extension, expects Congress to debate the issue after the 2012 elections.

Regardless of the outcome of the 2012 federal elections, wind is playing a larger role in energy worldwide. The US will continually be pushed to keep up with the rest of the world.

The US is the second largest wind market, second to China, but other countries are also making large commitments to renewable energy. The EU generates about 6 percent of its electricity from wind power. By 2020, generation is expected to grow to 12 percent. India and Brazil are the fastest growing markets for wind power and many non-OECD countries are adopting wind energy policies.

Although wind energy and other renewable energy policies are often highly politicized, experts expect wind to make up a greater portion of the US energy supply long-term. Technological improvements, competition, and government support will play a significant role in wind’s future.

As Steve Sawyer, secretary general of the Global Wind Energy Council, explains, “Wind power is a central player in our energy future. Whether it will supply 15, 20, or 30% or more of our electricity by 2050 will depend on a complex set of forces.”

Rebecca Mallett

Rebecca Mallett has been researching and writing about companies, industries, and executives as a member of the Hoover’s editorial team since 2007. For the past 4 years, she has focused on the agriculture and food manufacturing, business services, and mining and energy industries as a member of the First Research team. Follow her on Twitter.

Read more articles by Rebecca Mallett.

Comments

  1. Jack Bogle says:

    Thanks for the article about wind energy.

    I am curious to learn what is keeping so many investors on the sideline of an industry that seems to have so much potential.

    Has anyone completed a thorough Failure Mode Effects Analysis (FMEA) for the wind energy industry?

    What are the key factors holding this source of energy from rapid adoption?

    Jack T. Bogle, President
    International Management Systems
    abci-consultants.com

  2. Rebecca Mallett Rebecca Mallett says:

    Thanks for your comment, Jack.

    Despite wind power’s proven reliability, many investors still regard the technology as speculative, thus making loan terms less favorable for wind power suppliers.

    I think securing locations with high wind speeds and obtaining the necessary permits are a challenge for the industry. The wind production tax credit is also set to expire at the end of 2012 if Congress does not act, which will be a blow for the industry. The industry is highly politicized which can also hinder growth.

    There are indeed studies of the failure mode and effects analysis of wind turbines, although I cannot speak to how thorough they are.

Leave a Comment