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Global Markets Outside of Europe in 2007

North America

THE US

The US reported a record 5,244 MW installed in 2007, more than double the 2006 figure, accounting for about 30 per cent of the country’s new power-producing capacity. Overall, US wind power generating capacity grew 45 per cent in 2007, with total installed capacity now standing at 16.8 GW.

Wind farms installed in the US by the end of 2007 will generate an estimated 48,000 GWh in 2008, just over 1 per cent of the country’s electricity supply. The current US electricity mix consists of about 50 per cent coal, 20 per cent nuclear, 20 per cent natural gas, 6 per cent hydropower, with the rest generated from oil and non-hydro renewables, according to the US Energy Information Administration. 

Most interesting, perhaps, is how quickly wind’s share of current investment is growing: new wind projects account for about 30 per cent of the entire new power-producing capacity added in the US in 2007, establishing wind power as a mainstream option for new electricity generation.  

In 2007, wind power production was extended to 34 US states, with Texas consolidating its lead and the Midwest and Northwest also setting a fast pace. The states with the most cumulative wind power capacity installed are Texas (4,356 MW), California (2,439 MW), Minnesota (1,299 MW), Iowa (1,273 MW) and Washington (1,163 MW) (see Table 4.1).

Table 4.1: Top Ten States by Megawatts of Wind Power Generating Capacity, as of 31 December 2007

State	Existing	Under Construction	of total Installations (Existing)	Rank (Existing)
Texas	4356.35	1238.28	25.9	1
California	2438.83	45	14.5	2
Minnesot	1299.75	46.4	7.7	3
Iowa	1273.08	116.7	7.6	4
Washington	1163.18	126.2	6.9	5
Colorado	1066.75	0	6.3	6
Oregon	885.39	15	5.3	7
Illinois	699.36	108.3	4.2	8
Oklahoma	689	0	4.1	9
New Mexico	495.98	0	2.9	10

Source: AWEA

Historically, the political framework conditions for wind power in the US have been very unstable. This sustained growth in wind power is the direct result of availability of the federal production tax credit (PTC) over the past three years. The PTC is the only existing federal incentive in the US for wind power. It provides a 1.9 cent-per-kWh tax credit for electricity generated with wind turbines over the first ten years of a project’s operations, and is a critical factor in financing new wind farms. In order to qualify, a wind farm must be completed and start generating power while the credit is in place. The energy sector is one of the most heavily subsidized in the U.S. economy, and this incentive is needed to help level the playing field for wind and other renewable energy sources.

The PTC was set to expire in October 2008 but was extended for one more year, until the end of 2009. The tax credit is set at $2.1/kW at present value (January 2009). Previously when the credit was not extended, well before its expiry date installation growth rates fell by 93 per cent (2000), 73 per cent (2002) and 77 per cent (2004).

The American Wind Energy Association’s initial estimates indicate that another 5GW of new wind capacity will be installed in 2008. However, the pace of growth in 2008 and beyond will largely depend not on turbine availability, but on the timing and duration of the potential extension of the PTC.