Engineering, procurement and construction (EPC) contracts are evolving as utilities seek to spread risks, contain costs, and execute their business strategies. As a result, turnkey contractors are...
America's Resource Mix
Wind gains, but won’t soon alter the fuel mix.
the current plans for nuclear facilities to break ground.
Wind Power Almost Doubled Since 2002
During the past three years, U.S. wind energy has doubled in capacity thanks to favorable public attitude, improving economics, technological advances, and government support. 2 While making a good start, wind has a long way to go and faces a number of challenges in becoming integrated into supplier and load portfolios.
In the United States, according to the American Wind Energy Association (AWEA), 2,424 MW of new wind-generating equipment were added to the nationwide fleet in 2005. This considerable capacity added in 22 states easily breaks the 2001 (1,696 MW) record. At year-end, utility scale wind installations in 30 states across the country totaled 9,149 MW. As shown in Figure 4, installed wind capacity in the United States almost has doubled in the past three years (2003-2005). AWEA expects 2006 to be even a more active year for wind development, with additions projected at 3,000 MW. During 2006, wind energy is forecast to decrease the nation’s dependence on natural gas by 5 percent.
Between 2008 and 2016, developers plan to add approximately 5,500 MW of wind turbines. Together, the October 2004 extension of the federal wind energy production tax credit (PTC) and the extension of the PTC under EPACT are expected to allow these developers to move ahead with their plans and spur even more wind development given the recent upsurge in natural-gas price volatility.
Another important driver of wind-power projects occurs in efforts by states to promote clean energy consumption. Today, twenty states plus the District or Columbia have passed renewable portfolio standard legislation requiring utilities to provide a certain minimum amount of power from renewable sources such as wind and solar.
Despite significant progress, wind and other renewable energy options face serious economic and technical limitations in displacing conventional fuels. The economic reality is that the future fuel mix for power generation will not change drastically. As GE Energy CEO John Rice put it, “Nothing we know of today could replace the hole that would be left if coal or nuclear were to leave.”
1. This amount excludes the already 45,000 MW of canceled or delayed projects.
2. Assessing the State of Wind Energy in Wholesale Electricity Markets, FERC staff briefing paper, November 2004.