Strong winds on the horizon: wind power comes of age

Abstract

Wind power has been the fastest growing energy technology in the world for the last decade, and U.S. wind capacity is expected to increase by 50% by the end of 2001. What are the factors driving that growth? 1) Wind energy's increasingly attractive economics is perhaps the most important factor, with the costs of wind having declined almost 90% since the early 1980s. Technology changes have played a critical role in driving down costs. Today, major wind projects are being built in Texas that will generate electricity at costs competitive with those of a new natural gas plant. 2) State policy leadership has played a key role in moving wind into the U.S. market, and Minnesota, Iowa, and Texas have been the three states that have contributed the most new wind capacity over the last decade. 3) Competition in the electric industry has driven more and more utilities to recognize that many customers care about the environmental attributes of electric power. More than 190 utilities or power suppliers are now offering a wind-energy based electricity product. 4) The electric utility industry's perspective on wind has become more favorable as wind has been more widely deployed around the country. While California and Hawaii were the only states with significant wind capacity in the mid-1980s, there are 26 states with at least pilot utility-scale wind installations now planned or in place. 5) Wind and gas are complementary resources, but wind is emerging as perhaps the most promising nongas alternative for the electric industry. Gas has been the electric industry fuel of choice in recent years, but as the price of gas has soared over the past year, a growing number of utilities are finding it attractive to diversify their portfolio with wind. 6) Finally, the wind production tax credit is now scheduled to expire at the end of 2001. Many utilities that are favorably disposed toward wind are moving to ensure that their planned projects come on line prior to the expiration of the credit. Small wind turbines, which range in size from 300 W to 100 kW of capacity, have also been enjoying a steadily increasing market. Small wind turbines, which have many applications ranging from off-grid to grid-connected to hybrid systems, are cost-competitive with diesel systems while offering substantial environmental advantages.

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