ORIGINAL REPORTING: How The Wind Industry Will Cross The Renewables’ 'Valley Of Death'
Across the 'valley of death': How the wind industry will cope without tax credits; The industry is bracing for a slowdown in the early 2020s as incentives phase out and utilities meet CPP targets
Herman K. Trabish, May 25, 2016 (Utility Dive)
Editor’s note: The question of what lies beyond 2020 has now become even murkier.
Declining prices and federal incentives are driving a wind building boom that could last into the 2020s. Wind projects currently under construction or in advanced development represent 20,280 MW of new capacity in the U.S. New construction has averaged 15% quarter-over-quarter growth since the extension of the federal production tax credit (PTC) at the end of 2015. With 13,563 MW of installed capacity under construction at the end of Q3 2016, 6,717 MW in advanced development, and over 3,700 MW of new development announced in Q3, the industry’s future has rarely looked brighter. There have been wind-eligible requests for proposals (RFPs) from 20 electric utilities in 2016, and nine specifically for wind. Three utilities are currently seeking up to 1,800 MW of wind capacity.
But as the five-year extension of vital federal tax credits extended at the end of 2015 phase out, there could be trouble. The wind industry could hit a “valley of death” in the early 2020s, when current U.S. energy policies create a gap in support for renewables, according to industry experts. As utilities purchase more renewables to take advantage of tax credits, many are expected to fulfill their initial policy mandates. After an annual average of 8 GW or more of new capacity is added from 2016 to 2020, the market for renewables is likely to suddenly shrink significantly to only about 2 GW of new capacity in 2021… click here for more
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