Dive Brief:
- The EPA's Clean Power Plan relies on obtaining its 32% reduction in U.S. greenhouse gas emissions by 2030 by increasing the share of total U.S. power generation from wind and other renewables to 28%. Non-hydro renewables account for 7% of all U.S. electricity generation, according to the EIA.
- Wind’s capability for meeting its part of that 28% hinges on Congress renewing the $0.023 per kWh federal production tax credit (PTC) for wind projects. A recent National Renewable Energy Laboratory analysis showed that despite wind’s falling price, the tax incentive is vital to its growth, though EPA’s analysis shows wind can meet the CPP need without the PTC.
- Lawrence Berkeley National Laboratory projected wind growth through 2025 without the PTC at 3,000 MW to 4,000 MW per year, according to the Department of Energy’s recent "Wind Vision" study. That same DOE study reported the American Wind Energy Association projects growth at 2,400 MW per year while a Bloomberg study forecasts it will be 2,000 MW yearly.
Dive Insight:
If the PTC is not renewed and wind’s growth falters, each state’s CPP implementation will have to replace it with natural gas, solar, energy efficiency and/or conservation.
Wind’s installed capacity growth since 2010 has averaged 6,200 MW per year. The bulk of that growth came in 2012 with the PTC, as 13,131 MW were installed that year. The failure of Congress to renew the PTC until the end of 2012 resulted in 2013’s installed capacity dropping to a meager 1,087 MW. With the restored PTC and a new provision making it available to developers who got a minimum start on installation before the year’s end, 2014 growth rose back to 4,854 MW. Meanwhile, 2015 looks to be a promising year for wind.
The fate of a more permanent PTC extension is still in limbo. A Senate subcommittee recently passed a two-year extension of the PTC and its companion investment tax credit by a 23-3 vote. However, prospects in the full Senate and the House aren't promising for the $10.5 billion (over 10 years) budget item.
