Regulation, Sourcing Renewables, Wind - May 22, 2018
First-time C&I’s drive record wind PPAs
Led by first-time wind PPA participants Adobe, AT&T, and Nestle, along with repeat customers Bloomberg, Facebook, Nike, and T-Mobile, the number of wind PPAs signed in the first quarter of 2018 reached 3,500 MW, the highest level in any quarter since American Wind Energy Association (AWEA) began tracking them in 2013.
A report from AWEA attributed the record to wind power’s low cost and stable energy prices. "Word is out that wind power is an excellent source of affordable, reliable and clean energy," said Tom Kiernan, CEO of AWEA. "Our industry is consistently growing the wind project pipeline as leading companies, including utilities and brands like AT&T and Nestle, keep placing orders. Strong demand for wind power is fueling an economic engine supporting a record 105,500 U.S. wind jobs in farm and factory towns across the nation."
In Utility Dive’s analysis of AWEA’s report, Keith Martin, partner, Norton Rose Fulbright, surmised, "The two main factors contributing to the increase in projects are the greater certainty around tax policy and the fact that developers are eager to meet the deadlines imposed by the Congressionally mandated phase-out of the production tax credit (PTC)” The PTC provides an incentive payout for the first 10 years of a wind farm’s life, making it a driving force in the growth of wind power.
While the value of the PTC is cut by 20% for 2018 projects, projects that had already begun work on equipment or at a project site in 2016 are still eligible to collect 100% of the PTC, noted Utility Dive, adding, "That prompted a lot of developers to buy and stockpile wind turbines. Based on stockpiled equipment from 2016 there are about 40,000 MW of wind projects in the wings with another 10,000 MW of equipment stockpiled in 2017."
As the PTC ends after 2019, "there will be a rush in 2020 to get everything finished," Martin said.
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