By Hannah Hunt, Senior Research Analyst, American Wind Energy Association
You might not realize it, but the days of wind power occupying a niche space in the American electricity market are long gone. Today wind is a mainstream, integral part of our energy economy.
Forty-one states now boast utility-scale wind farms, and the U.S. has enough installed wind capacity to power over 26 million American homes. Last year, wind passed hydropower dams to become America’s largest source of renewable energy by installed capacity, and it is expected that wind will surpass conventional hydropower in generation this year too. Utilities and Fortune 500 companies alike increasingly turn to wind to meet their energy needs, which translates to job creation and economic investment for communities across the country.
How did we get here, and what does the future hold for wind energy in the years ahead?
Cost Declines Drive Growth
For three years running, wind energy has been one of the top three sources of new U.S. electric generating capacity. This growth is possible because wind has become cost-competitive with conventional electricity sources throughout much of the country. In fact, because wind’s costs have declined by 66 percent since 2009, it is now the cheapest source of new electric generating capacity in large parts of the U.S.
These cost declines are possible because of American ingenuity, improved domestic manufacturing, and technological advances that let turbines reach stronger, steadier winds. This also makes wind economical in more places. For example, North Carolina’s first wind farm came online in 2017, and that project would not have been economically feasible just a few years ago. Looking forward, new wind farms are in the development pipeline in previously untapped states like Virginia and Arkansas.
Recent results from Xcel’s Energy request for proposals (RFP) for new power in Colorado highlight wind’s stunning progress from a cost perspective. Companies submitted over 400 bids for new power projects, and wind energy led all technologies with the lowest median bid price: $18.10 per megawatt hour, a truly remarkable milestone. Nor was this result a one-off outlier—over 100 wind projects were proposed, signifying these rock bottom prices are indicative of broad industry trends.
“These prices should have every policymaker, utility, and energy investor in the region reconsidering their thinking about how much renewable energy to purchase, and when,” wrote Kevin Steinberger and Noah Long of the Natural Resources Defense Council. “The short answer: as much as you can get, and now.”
In reviewing these results, Vox energy and climate reporter Dave Roberts concluded, “Let’s face it: In most areas of life, when you look past the hype at the real numbers, it’s depressing. Renewable energy is one area where that typical dynamic is diverted. The closer you look, the better the news gets… It is the cheapest power available in more and more places, and by the time children born today enter college, it is likely to be the cheapest everywhere. That’s a different world.”
Where the Market Stands
The “everything is bigger in Texas” mantra holds true for wind power. Long the country’s wind leader, that trend continued in 2017 as more new wind projects came online in Texas than anywhere else. In fact, with more than 22,600 megawatts, there’s more than three times as much installed wind capacity in Texas as runner-up Oklahoma, which passed Iowa to claim second place last year. California and Kansas round out the top five, proving wind is popular in both red and blue states.
More wind is also on the way. By 2020, wind power could supply 10 percent of America’s electricity according to the road map laid out in the Department of Energy’s Wind Vision report. Over 28,600 megawatts of new wind projects are currently under construction or in the advanced stages of development, a 34 percent year-over-year increase. That is enough new wind to power millions of additional American homes. Thirty percent of this activity is located in the Midwest, 21 percent in Plains states, 20 percent in the Mountain West, and another 20 percent in Texas.
Who is Buying all of this Wind?
A mix of traditional utility buyers, Fortune 500 customers, and municipal buyers continued to invest in wind. More power purchase agreement (PPA) capacity was contracted in 2017 than in any of the three preceding years, increasing 29 percent year-over-year.
Non-utility buyers continue to add a new twist to wind’s customer profiles. Companies like Google and Facebook signed all of the PPAs announced from October through December. Google says that it achieved its 100 percent renewable energy target at the end of 2017, and that wind supplied 95 percent of that renewable power.
Why are these companies choosing wind? Not only does it help them meet internal sustainability goals, it also makes good financial sense.
And wind isn’t just a tech play. Although the Amazons, Facebooks and Googles of the world were early adopters, Anheuser-Busch made a large wind purchase in 2017, and soon every Budweiser bottle will come with a logo certifying it was made using renewable energy. GM builds hundreds of thousands of cars, trucks and SUV’s a year at plants in Texas, Ohio and Indiana that run on wind power. Other recent notable wind customers include General Mills, T-Mobile and San Francisco’s Bay Area Rapid Transit system.
“Investing in renewable energy is good for athletes, the planet and for business,” said Hannah Jones, Nike’s chief sustainability officer and VP of its Innovation Accelerator, when discussing a recent wind energy deal.
“Our approach takes different business, social and environmental benefits into account,” Anheuser-Busch InBev said when announcing its 100 percent renewable target. “We do not expect our cost base to increase. Renewable electricity is competitive with, or cheaper than, traditional forms of electricity in many markets.”
Demand for Wind Means Jobs for American Workers
This growth in wind power and demand from a diverse set of customers means jobs for American workers, who need to build turbines, construct wind farms and operate and maintain projects. Overall, more than 102,000 Americans across all 50 states have jobs in the wind industry, and another 45,000 U.S. wind jobs could be created by 2020 according to Navigant Consulting.
In particular, this strong level of activity keeps American factories busy. Due to their large size, it is often more cost effective to build wind turbine components in the U.S. rather than importing them from other countries. Today, over 500 U.S. factories across 41 states build wind turbine parts. More than 25,000 Americans have wind manufacturing jobs, and Navigant forecasts another 8,000 wind factory jobs could be created by 2020.
New wind farms also mean strong demand for operations and maintenance workers. That’s why wind turbine technician, along with solar installer, is one of the country’s two fastest-growing jobs according to the U.S. Bureau of Labor Statistics.
“It just seems like this is the future. This is where we are headed, and where we should be headed,” said Meredith Halfpenny, who has helped build about 400 wind turbines and climbed uptower an estimated 1,200 times. “Working in renewables, you feel good about it. A lot of people are drawn to it, and it resonates with people. Everyone comes together very quickly. You have a collective purpose for your jobs.”
Once again, Texas leads the pack in wind jobs with more than 22,000, followed by Iowa, Oklahoma and Colorado. Inside Climate News recently interviewed a number of Texas wind workers and found:
“(They) include veterans and women, those leaning politically right and left, environmentalists and climate change skeptics, the civically engaged and those who never vote. The clean energy component seems to be a bonus for some, but it was not the primary reason they chose this field. There is the laid-off gas worker who noticed all the wind turbines on the horizon and thought there must be an opportunity there. The English major who couldn’t find a job and remembered how much she liked the outdoor work on her family’s farm in the Texas panhandle. The two veterans who liked the element of risk and heights and the sweet spot of job independence and camaraderie.”
More Wind Means More Community Benefits
American workers are not the only ones who benefit from wind energy’s continued expansion—communities hosting wind farms also see far-reaching positives.
Over 99 percent of wind farms are built in rural areas, in communities that often need new economic opportunities. Wind farms often become the largest taxpayers in a county, so these communities get a huge financial boost. New wind farm tax revenue helps pay to fix roads, build new hospitals and fund law enforcement, all while keeping local taxes low.
The town of Sheldon, New York, for example, was able to eliminate local taxes entirely for eight years because wind farm revenue covered all of its budgetary needs. In Van Wert County, Ohio, wind revenue helped the Lincolnview school district provide every student with a computer and fund the repair and replacement program. Meanwhile, in Lowville, New York, the school district used wind funds to build a new athletic field and pay for advanced placement courses.
“In pre-wind, our county taxable value was $500 million,” said Ken Becker, executive director of the Sweetwater Economic Development Corporation in Texas. “In 2008 (after wind came to the area), it was $2.8 billion.”
Farmers and ranchers also see huge benefits from hosting wind turbines. More than 98 percent of wind farms are built on private land, and landowners receive lease payments in exchange for having turbines on their property. This offers steady income they can count on during years of poor crop yield or fluctuating commodity prices. For many families, it makes the difference between continuing a multi-generation tradition and ending a way of life. Last year, farmers and ranchers received $245 million in lease payments, and that number will only increase as more wind farms are built.
“Financially it’s a huge boost to us,” says third generation Colorado farmer Richard Wilson. “And I know if we didn’t have this wind farm my sons wouldn’t be able to keep this. I might have been able to, but they could not – there’s no question.”
American Offshore Wind Takes Shape
Over 54,000 land-based wind turbines and counting operate in the U.S. today, but to date, only five offshore machines do. That will soon be changing.
Following the Block Island Wind Farm becoming America’s first offshore project in late 2016, interest continues to spike. More than a dozen projects are currently under development on the east, west and Great Lakes coasts. New offshore hotbeds could include the coasts of Long Island, Maryland, and Massachusetts. Companies are investing R&D money to cut offshore costs further, including $35 million in a South Carolina facility to test a 9.5 megawatt offshore wind turbine.
Offshore wind’s growth could supply coastal cities and their large electricity demands with abundant clean energy, while creating a new domestic supply chain ripe with new manufacturing jobs.
All of these developments mean American wind power’s outlook remains bright in the years to come, with benefits flowing to wind workers at factories and communities hosting wind farms.