All things considered, 2008 was a good year for the wind power industry, according to a year-end report released by the American Wind Energy Association (AWEA). The most significant highlights of 2008 were the 11-hour renewal by Congress approving a one-year extension of the federal wind energy production tax credit (PTC), and the healthy growth in the domestic industry. Still, dark clouds loom for all renewable energy investment in 2009 because of the global economic recession and the plummeting price of oil.
Without the PTC extension though, the US wind industry would be facing a bleak outlook indeed for 2009 as utilities, wind energy developers and manufacturers rely on the tax break to drive investments in new wind farm construction. Since the PTC was established in 1992, Congress has let it lapse three times: in 1999, 2001 and 2003. Each time, the wind industry saw a 73-93% drop in wind energy installations in the subsequent year, according to the AWEA.
A top priority for the AWEA early in 2009 will be to lobby the incoming Obama Administration and the 111th Congress to pass at least a five-year extension of the PTC.
As for 2008, the US wind industry achieved an important milestone this past summer when total capacity passed the 20,000-megawatts (MW) mark. It took two years to double capacity from 10,000 MWs, whereas the first 10,000-MW mark took two decades to install, according to the AWEA.
The new 20,000-plus MW of capacity will generate over 60 billion kWh of electricity in 2009, enough to serve over 5.5 million American homes. It puts the industry on track to satisfy the US Department of Energy's projection that by 2030, wind power could provide 20% of the total electricity requirements of the US.
But whether the industry will be able to maintain the pace of investment in 2009 in light of the global recession is unclear. Many factors will impact investment besides government policy, including lower energy demand, lower oil prices and lack of access to credit.