Wind Technologies Market Report Shows One Step Back Then Two Steps Forward
July 28, 2009 by Justin
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The 2008 Wind Technologies Market Report, issued recently by the U.S. Department of Energy and Berkeley Lab, indicates that while 2008 was a banner year for the wind market 2009 may see a significant if not temporary step back. For the fourth year in a row the United States was the fastest growing wind power market in the world with wind power capacity increased by 60% or approximately $16 billion in additional investment in wind power projects. Wind power made up 42% of all new electric generating capacity added in the U.S. in 2008 and wind power now makes up 2% of the nation's energy supply.
While the report indicates that 2008 saw unprecidented growth and investment in wind power it also indicates that 2009 has been and will continue to be a challenge. The global financial recession has had a downward effect on industry growth to what extent we do not know yet. While federal policy changes point to aggressive expansion of the industry, the current economic outlook is in opposition to that structure.
Other important highlights of the 2008 Wind Technologies Market Report:
- The U.S. is the fastest-growing wind market worldwide leading the world in new wind capacity for four straight years and taking the lead this year from Germany in cumulative wind capacity installations.
- Texas is the number one state in new wind capacity with 7,118 MW of new wind capacity. Iowa and Minnesota now get over 10% of their electricity generation from wind power.
- Market growth is spurring manufacturing investments in the U.S. Several major foreign wind turbine manufacturers either opened or announced new U.S. wind turbine manufacturing plants in 2008. Likewise, new and existing U.S.-based manufacturers either initiated or scaled-up production. The number of utility-scale wind turbine manufacturers assembling turbines in the U.S. increased from just one in 2004 (GE) to five in 2008 (GE, Gamesa, Clipper, Acciona, CTC/DeWind).
- Wind turbine prices and installed project costs continued to increase into 2008. Near the end of 2008 and into 2009, however, turbine prices have weakened in response to reduced demand for wind due to the financial crisis.
- Wind project performance has improved over time, but has leveled off in recent years. The longer-term improvement in project performance has been driven in part by taller towers and larger rotors, enhanced project siting, and technological advancements.
- Wind remained economically competitive in 2008. Despite rising project costs, in recent years wind has consistently been priced at or below the price of conventional electricity, as reflected in wholesale power prices. With wholesale prices plummeting in recent months, however, the economic position of wind in the near-term has become more challenging.
- Expectations are for a slower year in 2009, in large part due to the global recession. Projections among industry prognosticators range from 4,400 MW to 6,800 MW of wind likely to be installed in the U.S. in 2009. After a slower 2009, most predictions show market resurgence in 2010 and continuing for the immediate future.