Wind power generation was up 50 percent in the U.S. last year, according to an industry report released today, but wind companies have taken some lumps in the current economy, and there are some potential roadblocks that could slow down expansion in the coming years.
The American Wind Energy Association said 8,545 megawatts of wind power were added in 2008, up from 5,249 MW added in 2007. But the numbers go down in the group’s outlook for 2009, with an estimate of 5,000 MW or more. According to the AWEA, there are at least a couple of big “ifs” for the industry this year — if the stimulus package is implemented effectively, if transmission infrastructure is improved, and if utilities are required to generate more renewable energy.
Layoffs have already hit the wind power industry, and earlier this year the head of Vestas Wind Systems told the Guardian that demand for wind turbines is falling far short of the company’s previous projections. But some wind companies, including Vestas, continue to pin their hopes on the U.S. market.
The AWEA said 10 new wind power manufacturing plants started operations in 2008, 17 were expanded, and 30 were announced. Last month, Vestas broke ground on two new factories in Brighton, Colo. And last year, BP (s BP) said it was shifting its investments in wind to the U.S., citing the favorable onshore market.
But even if the economy picks up, there’s already a glut of projects in development in the U.S, with the AWEA reporting that there are close to 300,000 MW of proposed wind projects in the pipeline. And that brings up another big problem for the industry — where will all of these new projects plug in?
In its report, the wind group said most of the wind plants in the pipeline can’t be built because “there is insufficient transmission capacity to carry the electricity they would produce.” The AWEA said it would push for an expansion of the U.S. transmission infrastructure, in addition to a national renewable portfolio standard, saying both are needed to boost renewable energy development.