Page 45 - Bloomberg Businessweek - November 19, 2018

Bloomberg Businessweek The Year Ahead 2019 Energy

Solution
Wind Power

▷ The subsidies are ending, but the industry is set to stand on its own

A coming-of-age moment is bearing down on the energy source in just seven states. By last year that
U.S. wind power industry, and proponents say it’s had grown to 16 states, according to a September
ready—well, mostly ready. report by the U.S. Energy Information
For a quarter-century, the industry has been
supported by federal tax credits that helped it cent of state power in 2017, putting it just behind
attract $250 billion in investments and create coal, at 38 percent. In the first six months of 2018,
100,000 jobs, according to the American Wind though, wind jumped ahead, 42 percent to 35 per-
Energy Association. That support ends next year, cent, the EIA report showed.
but analysts and executives say the credits have Development of new plants will likely slow
done what they were supposed to do: make the without the benefit of the credits, analysts say,
industry competitive. but the industry has momentum on its side. “The
Established supply chains, taller towers, big- fact is, there will be a slowdown,” says Declan
ger rotor blades, and the use of artificial intelli- Flanagan, chief executive officer of renewable
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gence to boost efficiency have made wind power power developer Lincoln Clean Energy LLC.
cheaper than coal and on a par with natural gas. “Obviously it’s a value stream that goes away.
And soon enough, offshore wind farms could We’ve got to make it up by competitiveness.”
expand the renewable energy source’s influence It won’t be easy. While developers have spent
Administration. In Kansas, wind generated 36 per- 42%
beyond rural states such as Texas and Kansas to $1.1 trillion globally on new wind farms over the ● Share of Kansas’
the high-population corridors along the East and past dozen years, more money is going into solar power generated by
wind in the first half
West coasts. “Wind has matured now,” says Chuck energy systems these days. And the massive tur- of 2018
Grassley, the Republican senator from Iowa who bines needed to generate gigawatts of power,
first championed the tax credits in 1992. “It’s which can rise 600 feet in the air, have spurred
ready to compete.” protests both on- and offshore, slowing develop-
Since North America’s first offshore wind farm ment. The complaints: The turbines are unsightly,
opened off Rhode Island in late 2016, the industry and there are concerns the offshore plants will
has secured a dozen offshore leases from the fed- hurt fishing, a key East Coast industry.
eral government to build similar operations else- Meanwhile, the next stage of growth in wind
where. Dominion Energy Inc. got in under the power, which accounted for a record 6.3 per-
federal tax credit deadline with its plan to build cent of U.S. electricity last year, could depend as
a pilot wind farm off the coast of Virginia Beach ◀ The U.S.’s first
by late 2020. On Nov. 2, state regulators approved offshore wind farm,
off the coast of
the plan for a two-turbine farm expected to cost Rhode Island
$300 million and generate 12 megawatts of elec-
tricity, enough to power about 3,000 homes.
Success could help Dominion in its quest to
build turbines that would generate 2 gigawatts of
power on an adjacent site. “Utilities make 20- and
30-year decisions, and they’ve kind of voted with
their pocketbook,” says Chris Brown, president
of turbine maker Vestas North America. “We’re
ready to compete in a subsidy- free world.”
In 2007 wind was the prevalent renewable