US Wind Generation to Stall Next Year

At a US Senate hearing earlier this week, the US head of Bloomberg New Energy Finance’s (BNEF) policy analysis told the members that after a record year of US investment in green energy in 2011, the outlook for 2012 and succeeding years is far less bright. In addition to incentives that expired at the end of 2011, the production tax credit for wind generation ends in December 2012, and that has already crushed orders for new wind farms in 2013.

A report in Environmental Finance tells the tale:

BNEF forecasts about 9.5GW of new wind capacity in 2012, compared with about 6.8GW in 2011, but that figure will decline to 500MW in 2013 if the [production tax credit] is allowed to expire.

The worse news is that the US capacity to assemble wind turbines now totals 13,000 megawatts. If only 500 megawatts will be installed in 2013, that excess capacity will have to go. That means significant job losses.

Even if Congress extends the production tax credit, BNEF estimates that US new wind installations will total just 3,500 megawatts, still far short of total capacity.

The wind power industry has been hit hard by the economic downturn and the historically low prices for natural gas. When the loss of the production tax credit is added in, the outlook for the wind industry gets even grimmer.

Paul Ausick