EnergyU.S. wind power market riding a wave which is likely to crest in 2012

Facing looming policy uncertainty beyond 2012, the United States remained one of the fastest-growing wind power markets in the world in 2011 — second only to China — according to a new report released by the U.S. Department of Energy and prepared by Lawrence Berkeley National Laboratory (Berkeley Lab).

Roughly 6.8 gigawatts (GW) of new wind power capacity were connected to the U.S. grid in 2011 — more than the 5.2 GW built in 2010, but below the 10 GW added in 2009. Driven by the threat of expiring federal incentives, new wind power installations are widely expected to be substantially higher in 2012 than in 2011, and perhaps even in excess of 2009’s record build.

A Lawrence Berkeley National Laboratory release reports that other key findings from the U.S. Department of Energy’s 2011 Wind Technologies Market Report include:

• Wind is a credible source of new generation in the U.S. Wind power comprised 32 percent of all new U.S. electric capacity additions in 2011 and represented $14 billion in new investment. Wind power currently contributes more than 10 percent of total electricity generation in six states (with two of these states above 20 percent), and now provides more than 3 percent of total U.S. electricity supply.

• In spite of the lack of policy clarity, wind turbine manufacturers and their suppliers continued to localize production domestically in 2011. As a result, a growing percentage of the equipment used in U.S. wind power projects is being sourced domestically: Sixty-seven percent in 2011, up from just 35 percent back in 2005-6. Ryan Wiser, a Staff Scientist at Berkeley Lab and co-author of the report, notes, however, that “behind these positive headline numbers, the domestic wind industry supply chain is currently facing severe pressure, due to uncertain prospects after 2012.”  Specifically, profit margins have been declining and concerns about manufacturing overcapacity have deepened, potentially setting the stage for significant layoffs if demand for turbines (for post-2012 delivery) does not pick up.

• Turbine scaling has boosted wind project capacity factors. Since 1998-99, the average nameplate capacity of wind turbines installed in the United States has increased by 174 percent (to 1.97 MW in 2011), the average turbine hub height has increased by 45 percent (to 81 meters), and the average rotor diameter has increased by 86 percent (to 89 meters).  This substantial scaling has pushed average capacity factors among new wind projects higher