Three DOE Reports Analyze U.S. Wind Energy Growth

September 11, 2014

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DOE recently released three reports that provide a detailed analysis of the markets for utility-scale land-based technologies, offshore wind technologies, and distributed wind technologies: the Offshore Wind Market and Economic Analysis, produced by Navigant Consulting, Inc.; the 2013 Wind Technologies Market Report, produced by the Lawrence Berkeley National Laboratory; and the 2013 Distributed Wind Market Report, produced by the Pacific Northwest National Laboratory.

The Offshore Wind Market and Economic Analysis noted that although the United States currently has no offshore wind installations, two projects—Cape Wind and Deepwater's Block Island project—are now in initial stages of construction. In total, 14 projects with 4.9 gigawatts (GW) of total potential capacity are now in advanced stages of development, defined in the report as having either been awarded a lease, conducted baseline or geophysical studies, or obtained a power purchase agreement.

The report also states that although the offshore wind industry in the United States made significant progress in 2013, there are three high-level barriers that can impede future progress: cost competitiveness, lack of infrastructure, and uncertain and lengthy regulatory processes. Because offshore wind is driven by upfront capital costs, investment support policies such as cash grants, low-interest loans, and tax breaks are needed to increase cost competitiveness.

Infrastructure challenges include the lack of purpose-built ports and vessels, lack of domestic manufacturing and experienced labor, and insufficient offshore transmission. Regulatory challenges include uncertain site selection and leasing processes, fragmented permitting processes, and public resistance related to uncertain environmental impacts.

The continued development of innovative offshore technologies will also help to reduce cost and stimulate needed infrastructure development. In 2014, DOE announced that Fishermen's Energy, Dominion, and Principle Power were each selected for up to $46.7 million in federal funds for the final design and construction of pilot projects off the coasts of New Jersey, Virginia, and Oregon, respectively. 

The 2013 Wind Technologies Market Report found that the total wind power capacity in the United States grew to 61,110 MW in 2013. A number of states in particular stood out: California installed 269 megawatts (MW), whereas nine other states generated more than 12% of their power through wind.

The report also found considerable progress in wind generation technology, specifically turbine nameplate capacity, hub height, and rotor diameter have all increased significantly. In addition, costs of wind power installations have fallen, leading to an improvement of wind competitiveness in 2013. As for the international outlook, U.S. exports of wind-powered generating sets have increased steadily since 2007, reaching $421 million in 2013.

Although the wind power growth in 2013 was smaller than that of 2012, the report points out that the production tax credit, a primary source of federal support for wind projects, has now been extended, which is expected to spur wind deployment in 2014–2015.

According to the 2013 Distributed Wind Market Report, 2013 saw the addition of 30.4 MW of distributed wind capacity, leading to a cumulative distributed wind capacity of 842 MW. Domestic manufacturers dominated the small wind market, with 93% of 2013 domestic small wind sales (on a unit basis) coming from U.S. suppliers. Domestic manufacturers also increased exports by 70%, from 8 MW in 2012 to 13.6 MW in 2013. In addition, 76% of small wind sales from U.S. manufacturers were to non-U.S. markets, compared to 57% in 2012.

Despite the modest additions to installed wind capacity in 2013, the American Wind Energy Association reported that more than 12,000 MW of capacity was under construction at the end of 2013. Up to 130 MW of that energy may be distributed wind, which could increase the cumulative capacity in the near future.