A recently-released report on the U.S. Wind Market in 2014 cites the close relationship between the growth of wind power and new electric transmission infrastructure.
The DOE 2014 Wind Technologies Market Report was released on Aug. 10 and shows that total installed wind power capacity in the United States grew at a rate of 8% in 2014, bringing the United States total installed capacity to nearly 66 GW.
The Edison Electric Institute (EEI) estimates that total transmission investment by investor-owned utilities peaked in 2014, at $20.2bn, after years of steady growth. EEI forecasts consistent, though slightly lower, investments through 2017.
EEI states that 46% of the transmission projects it is tracking will, at least in part, support the integration of renewable energy. About 2,000 miles of transmission lines came online in 2014. That’s substantially lower than 2013 but consistent with the 2009-2012 time period.
Transmission is particularly important for wind energy because areas with the best wind speeds are often distant from load centers.
One of the largest transmission undertakings devoted to wind power is the Competitive Renewable Energy Zones (CREZ) project in Texas. The CREZ includes almost 3,600 circuit miles of transmission lines and will accommodate up to 18,500 MW of wind power.
The nearly $7bn cost of the CREZ was $2bn higher than first estimated, in part because over 600 circuit miles of additional transmission lines were needed to accommodate requested changes in routing from landowners.
About 99% of all CREZ lines have been built, DOE said in the report. The Public Utility Commission of Texas (PUCT) has called for construction of the final CREZ element, a set of transmission lines that would bring 1,100 MW of additional transmission capacity to the Panhandle.
But in April 2015, PUCT staff recommended that Sharyland Utilities, the entity responsible for constructing lines for this portion of the CREZ, be required to secure a separate certificate of convenience and necessity (CCN) for this project.
Elsewhere, grid operators Southwest Power Pool (SPP) and Midcontinent ISO MISO completed—or soon will complete—several transmission projects in their respective territories of relevance to wind.
The DOE report also noted that in 2014, the U.S. Supreme Court opted not to hear a challenge to the Federal Energy Regulatory Commission’s (FERC’s) previous orders approving MISO’s plans to spread the costs of building long-line transmission projects among all of its members.
The American Wind Energy Association (AWEA) has identified 18 near-term transmission projects that, if all were completed, could transmit 55 GW-to –60 GW of additional wind capacity.
GE, Siemens and Vestas dominate U.S. wind turbine market
Three major suppliers dominate the U.S. wind turbine market, according to the DOE report. General Electric (NYSE:GE), Siemens, and Vestas captured 98% of the U.S. market in 2014.
Continuing the recent dominance of the three largest turbine suppliers to the U.S. market, of the 4,854 MW of new U.S. wind capacity installed in 2014, 60% (2,912 MW) deployed turbines from GE Wind, with Siemens coming in second (1,241 MW, 26% market share), followed by Vestas (584 MW, 12% market share)
Vestas remained the top supplier, followed by Siemens, GE, and Goldwind. Chinese turbine manufacturers continue to occupy positions of prominence in the global ratings, with eight of the top 15 spots. To date, however, their growth has been based almost entirely on sales in China.
With near-term growth in the U.S. market, wind sector employment increased from 50,500 in 2013 to 73,000 in 2014. Moreover, the profitability of turbine suppliers has generally rebounded over the last two years, after a number of years in decline. Although there have been a number of recent closures, four major turbine manufacturers had one or more domestic manufacturing facilities operating at the end of 2014.
Domestic nacelle assembly capability stood at roughly 9 GW in 2014, and the United States also had the capability to produce approximately 7 GW of blades and 7 GW of towers annually.
“Despite the significant growth in the domestic supply chain over the last decade, however, prospects for further expansion have dimmed. Far more domestic manufacturing facilities closed in 2014 than opened,” DOE said in the report.
Wind turbine prices remained well below levels seen several years ago. After hitting a low of roughly $750/kW from 2000 to 2002, average turbine prices increased to more than $1,500/kW by the end of 2008. Wind turbine prices have since dropped substantially, despite increases in hub heights and especially rotor diameters. Recently announced transactions feature pricing in the $850–$1,250/kW range, according to the report.