Wind Power
Installed Wind Power in the USA Grew by 45% in 2007

Alt Dot Energy
January 19, 2008

U.S. wind power grew 45% in 2007, the sharpest rise since the 1980s, as developers responded to a
federal tax credit, a growing number of state renewable energy mandates and
global warming concerns, the American Wind Energy Association said Thursday.

The industry installed 5,244 megawatts in 2007, accounting for 30% of all new
electricity-generating capacity, the AWEA says. That’s more than double the
largest amount ever added and enough to power 1.5 million homes, says AWEA
Executive Director Randall Swisher. U.S. wind power had been annually growing an
average 30% the previous five years, he says.

“I think it signifies that wind will be an increasingly significant contributor
to our electricity supply system,” Swisher says, predicting that wind could
provide 20% of U.S. power by 2020.

Wind now generates more than 1% of U.S. electricity, the AWEA says. That far
surpasses other renewable energies — such as solar and biomass — except for
large hydroelectric projects. The USA has been the world leader in wind energy
growth the past three years, though the nation still trails Germany in total wind power.

Texas, by far, added the most wind capacity, at 1,618 megawatts, followed by
Colorado, Illinois, Oregon and Minnesota, the AWEA says.

The main reason for the robust growth is a federal tax credit of 2 cents per
kilowatt hour of energy produced, says analyst Stow Walker of Cambridge Energy
Research Associates. The tax credit lowers a developer’s costs to about 7 cents
per kilowatt hour, placing wind costs on par with coal-fired plants.
Congress approved the tax credit in the 2005 energy bill, and it expires at the
end of 2008. The three-year window has given turbine manufacturers confidence in
a sustained market for their products, Swisher says.

By contrast, previous tax credits for wind power expired after a year, creating
a boom-and-bust cycle from 1999 to 2004. Although a proposal to further extend
the tax credit was ultimately left out of the energy bill that Congress passed
last month, Walker predicts lawmakers will extend the credit before it expires.
“Congress doesn’t want a lack of confidence in the industry just as it’s getting so big,” he says.

Another factor pushing wind development is that 29 states now require utilities
to include a percentage of renewable energy in the mix of power they generate
and buy. A growing number of states also are adopting plans to reduce emissions
of greenhouse gases, such as carbon dioxide, that cause global warming.

Although wind power should continue to increase sharply in coming years, growth
could be somewhat constrained in the near term. Manufacturers are sold out for
this year as torrid worldwide wind power growth has created a wind turbine
shortage, Swisher and Walker say. The crunch, though, will likely be
short-lived: Developers opened or announced at least 14 new turbine plants in
the USA last year.

Also, with wind farms often located in rural reaches of states such as Texas and
Iowa, wind developers increasingly face a lack of transmission lines to
transport the electricity to population centers, Walker says.


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