Wind Market Overview

Nicholas Doherty, Unsplash

IRA incentives will give a boost to U.S. wind

The wind market continues to be the silent powerhouse in the renewable energy space in the United States. Through the fi rst nine months of 2022, electrical generation by wind increased by 18.64% and provided 9.75% of total U.S. electrical generation. The next closest renewable energy electrical source was solar at 5% of the country’s output. But wind’s steady trajectory threatened to be stalled by supply chain issues and long offshore project timelines if some positive action wasn’t taken quickly.

A shot in the arm came with new and extended incentives for wind in the Infl ation Reduction Act (IRA), which was signed by President Joe Biden in August. The wind production tax credit (PTC) was extended for projects that start construction before January 1, 2025, and a 10% PTC adder can be applied for wind projects that use domestic content. Wind projects can also now elect to take an investment tax credit (ITC) in lieu of the PTC — a clear benefi t to expensive offshore wind development.

“This unprecedented investment in clean energy will supercharge America’s clean energy economy and keep the United States within striking distance of our climate goals,” said Heather Zichal, then-CEO of the American Clean Power Association (ACP). “This is a generational opportunity for clean energy after years of uncertainty and delay. The IRA will lower consumer costs, enhance grid reliability and strengthen the nation’s energy security. It will expand our domestic manufacturing base, inject nearly half a trillion dollars into U.S. GDP over the next decade and create more than half a million new jobs — more than doubling today’s clean energy workforce.”

Consulting fi rm Rystad Energy quickly predicted the IRA would lead to an additional $160 billion of investments in onshore wind, which would double installed capacity over the next 10 years to 280 GW. The silent powerhouse will continue its leadership in U.S. renewable energy.

The IRA includes the new Advanced Manufacturing Production Credit, which will encourage domestic production of wind components like foundations, nacelles, blades and towers. The bill also provides nearly $40 billion in clean energy manufacturing that would directly benefi t offshore wind production and develop an advanced electrical transmission outline.

Those investments are much needed, as President Biden has amended his 30 GW of offshore wind by 2030 goal to require 15 GW of fl oating offshore wind capacity by 2035.

“California and Oregon have some of the best wind resources in the world, and fl oating offshore wind is crucial to harnessing these resources due to the depth of the ocean fl oor along the West Coast,” ACP’s Zichal said. “Innovation in fl oating wind turbines will make offshore wind more effi cient, grow a more robust American supply chain, and bring down the cost of energy for consumers.”

The Dept. of the Interior held the fi rst-ever offshore wind lease sale on America’s west coast in December as it opened California waters to fl oating offshore wind development. Even before 2022 closed out, major progress spurred by the IRA was in motion. The next year should prove to be another exciting development in the U.S. wind industry. WPE

WIND TURBINES

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