Wind has secured its position as a mainstream energy source. In fact, wind and natural gas are the two leading sources of new power generation, and together they provided 90% of the new generating capacity added in the US during 2008. The US wind energy industry shattered all previous records last year by installing 8358 MW of new generating capacity, 42% of the nation's total. That massive growth swelled the nation's total wind power generating capacity by 50% and channeled an investment of some dollars 17 billion into the economy, positioning wind power as one of the leading sources of new power generation in the country today, along with natural gas. New wind capacity brought online in the fourth quarter alone, 4112 MW, exceeds annual additions for every year except 2007. In all, wind energy generating capacity in the US now stands at 25,170 MW, producing enough electricity to power the equivalent of close to seven million households and strengthening our national energy supply with a clean, inexhaustible, homegrown source of energy.
The US is now number one in the world in terms of new installed wind capacity - the US installed 2000 MW more than the number two, China - and in total installed capacity, overtaking long-time leader Germany (23,902 MW). The wind capacity operating in the US today is more than all the power capacity installed in Oklahoma or New Jersey or Arkansas.
Indeed, wind is an economic and job creation dynamo, adding 35,000 new jobs during a period when other sectors of the economy were laying off hundreds of thousands of workers. More than 55 new or expanded wind energy manufacturing facilities came online or were announced during 2008, reflecting billions of dollars invested in the US economy on top of the investments in new capacity.
Market growth acceleratES job creation
About 85,000 people are employed in the wind industry today, up from 50,000 a year ago. These workers hold jobs in areas as varied as turbine component manufacturing, construction and installation of wind turbines, wind turbine operations and maintenance, legal and marketing services, and more. About 8000 of these jobs are construction jobs, but wind power's recent growth has also accelerated job creation in manufacturing, as the share of domestically manufactured wind turbine components has grown from under 30% in 2005 to about 50% in 2008. New manufacturing facilities created 13,000 new direct jobs in 2008.
The progress wind has made is exciting, but the economic downturn had begun to take its toll on the industry by January 2009. Financing for new projects and orders for turbine components slowed to a trickle and layoffs began to hit the wind turbine manufacturing sector as the credit crunch settled in. As financing slowed, orders for new equipment have diminished and some wind turbine and turbine component manufacturers in different parts of the country have announced layoffs.
For this reason, the American Recovery and Reinvestment Act, otherwise known as the stimulus package, approved by Congress in February, is a welcome development for the wind industry. The package includes several key provisions that will enable the wind industry to regain its momentum and continue to grow as the US economy weathers the current downturn. A three-year extension of the federal production tax credit (PTC), with the option of converting the PTC to a 30% investment tax credit (ITC) and applying for an equivalent grant through the US Department of Treasury, is expected to provide a strong infusion of capital for new wind farm development.
This, in turn, will spur orders for equipment and generate new growth in the domestic manufacturing chain. All of this translates into thousands of jobs and billions of economic investment right here in the US. The next step is to create federal policies that reflect a national commitment to renewable energy sources, including a national renewable electricity standard (RES) and national policy to facilitate investment in a green power transmission superhighway.
A national RES would signal a long-term national commitment to clean energy. It will provide certainty to investors and open the way for the billions of dollars of investment that is necessary to build infrastructure (transmission lines) and wind farms as we set our sights on achieving President Obama's vision of doubling our use of renewables by 2012.
Transmission policy changes are needed to enable the development of a green power transmission superhighway that can deliver electricity generated by remote renewable energy facilities into the cities where it is needed. Without an expanded and upgraded grid, renewable energy projects will not be built. There are already 300,000 MW of wind capacity that cannot be built due to the backlogged transmission queue.
Recent movement on these issues in Congress is encouraging and the wind industry remains optimistic about the future. The US Department of Energy says that wind could provide 20% of our electricity by 2030 and the wind industry is doing its part to move toward that vision. With the right policies in place, wind is ready to help address some of the nation's most pressing challenges: economic recovery, energy security and environmental stability.
Wind can power the way to a cleaner, stronger America. In fact, we are moving in that direction already.