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Wind Power, Business and Industry Trends Analysis

Mankind has utilized wind as a form of energy ever since the first sail was hoisted on a crudely built boat thousands of years ago.  In the 12th century, it was used to power the first windmills.  It is only natural that wind would eventually be viewed as an attractive means of generating electricity.
Today, wind turbine manufacturers have continually enhanced technology.  As a result, wind turbines are much taller than before, with vastly wider blade spans.  Modern wind turbines have extremely high output and are less costly to maintain for a given amount of generation than their recent predecessors.  New models also have much less downtime due to breakdowns.  As a result, wind turbine farm development has become more effective, both economically and in terms of total power created.  Analysts at Lazard reported that the cost of generating one kilowatt-hour of wind power fell from 13.5 cents in 2009 to 3.3 cents in 2021 (before government tax credits). 
In 2021, wind generated 16% of America’s renewable energy consumption (or 3,332 trillion Btu), according to the U.S. Department of Energy (DOE).  By 2030, wind could supply as much as 20% of the country’s electricity.
The largest installed base by far is in Texas.  Not only does Texas enjoy vast stretches of open land that have strong steady winds, it also is home to an extremely efficient, statewide electricity distribution grid that is well suited to deliver wind power from rural areas to the major cities where it is needed.
Wind projects, like other renewable power initiatives, benefit from tax credits and subsidies from government.  At the end of December 2020, the U.S. Congress extended the production tax credit (PTC) at 60% of the full credit amount, or $0.018 per kilowatt hour ($18 per megawatt hour), for another year through December 31, 2021.  In 2020, the credit was 60% of the full credit amount.  Under PTC legislation, qualifying wind projects had to begin construction by December 31, 2021. 
The Inflation Reduction Act, passed by the U.S. Congress in 2022, extended PTC for wind projects that begin production by the end of 2024.  The Inflation Reduction Act also established a tax credit of 30% of total investment in stand-alone energy storage projects regardless of the energy source.  Previously, the credit applied to energy storage paired with solar only.  The credit could expand to 50%, if the project is built with at least 40% U.S. manufactured components (which tacks on another 10% tax credit); and if the project is located in areas previously major employers in the fossil fuel sectors (the other 10% credit).  Some wind projects may qualify for a 100% PTC.  To do so, the project must pay prevailing wages at the local rate (to be determined by the Secretary of Labor) for construction or repairs of the facility and ensure that no less than the applicable percentage of total labor hours is performed by qualified apprentices (10% for projects that begin construction in 2022, 12.5% for those beginning in 2023 and 15% for those beginning in 2024 or later). The intent of these wage and labor provisions is to boost the use of union workers.

Internet Research Tip: Wind Power
For the latest on wind-powered electricity generation in the U.S., see the American Clean Power Association at

     Meanwhile, wind power installation in Europe and Asia has been progressing at a strong pace.  Global wind generation cumulative capacity reached 824.9 gigawatts in 2021, up from 733.3 gigawatts in 2020 and 622 gigawatts in 2019, according to BP.  China had the highest total capacity installed with 329.0 gigawatts, followed by the U.S. with 132.7 gigawatts and Germany with 63.8 gigawatts.
Offshore wind farms are being emphasized in some locations, particularly where winds are strong and steady, and space for land installations is limited.  The UK hopes to raise its share of electricity generated by renewable resources from 7% in 2010 to 30% over the next several years.  Britain installed a major wind farm off the coasts of Kent and Essex to the southeast of London in December 2012.  Called the London Array, the first phase produces 630 megawatts and has 175 turbines.  By the end of 2020, wind power capacity in the UK reached a record 24 gigawatts (both onshore and offshore), largely due to the expansion of the Orsted Walney wind farm in the Irish Sea, which has 87 turbines and a capacity of 659 megawatts.
Formosa 3, a $10 billion offshore wind power project in Taiwan promises to have two gigawatts of capacity, making it three times as powerful as Orsted Walney.  Formosa 3 is expected to reach completion between 2026 and 2030. 
In early 2017, construction was completed on the first U.S. offshore wind farm.  Located near Block Island, Rhode Island, the farm has five 560-foot-tall windmills, each with a six-megawatt capacity (capable of powering about 17,000 homes).  The $300 million, privately financed project is backed by Deepwater Wind.  A second project, the Coastal Virginia Offshore Wind Project, received state approval in August 2022.  The 176-wind turbine project is expected to generate 14.7 megawatts of electricity and will be located 27 miles off the coast of Virginia Beach.  Dominion Energy Virginia is spending $9.8 billion to build it, and completion is expected in 2026.  Nonetheless, opposition by local property owners remains strong in many locales, and such resistance could potentially lead to increased total costs and delayed or scrapped projects in some instances.
However, many proposed new offshore wind farms are in planning stages, primarily located off the Northeastern coast of the U.S. in federally designated wind energy areas created to avoid lawsuits like those that plagued Cape Wind.  Those projects face many obstacles.
New technology has enabled wind turbines to grow to massive size, offering greater operating and maintenance efficiencies.  One of the world’s largest floating wind turbines is the 344-foot, seven-megawatt structure anchored to the seabed 12 miles off the coast of Fukushima, Japan.  The tower is designed to withstand 65-foot waves and tsunamis.  It is part of as many as 25 new 10,000-megawatt wind farms to be built over a 25-year period.  The first three turbines are being funded by the Japanese government at a cost of $226 million.  Later projects will hopefully be funded by a consortium of 11 companies including Hitachi and Mitsubishi Heavy Industries.
Two large wind projects by Orsted, formerly Dong Energy, a major Danish wind developer, are to be built in the German sector of the North Sea.  The projects will receive no government subsidies, with a number of major corporations’ electricity purchase agreements enabling funding.  Both projects will utilize Siemens Gamesa offshore wind turbines, each with a capacity of 11 megawatts and a 200-meter rotor diameter.  The two projects, Borkum Riffgrund 3 (900-megawatt capacity) and Gode Wind 3 (242 megawatts) will be commissioned in 2025 and 2024 respectively.
Wind farms may be planned for deeper water and further distances from shore than ever before, posing serious technical challenges.  Scientists are hoping to find a way to anchor the platforms in deeper water past current limits.  A professor at the Massachusetts Institute of Technology proposes using offshore oil well technology to anchor wind platforms to the ocean floor using tense metal cables.  The process would save on building materials and makes installation far easier than the “monopiles” currently used to support offshore wind turbines.  With the cable technology, wind platforms might be used in water of up to 600 feet.  German wind equipment manufacturer VDMA Power Systems builds turbines using steel foundations almost 100 feet deep.  While deeper and more remote offshore farms are becoming more achievable, the cost to build and maintain them can be three times that for onshore farms.
A new $5 billion wind farm and electricity superhighway is on the drawing board called the Chokecherry and Sierra Madre Wind Energy Project, backed by billionaire Phillip Anschutz.  The 3,000-megawatt farm will be in rural Wyoming (the largest constructed in the U.S. to date) and connect to a 730-mile transmission line ending in Las Vegas, Nevada where it can connect to the grid supplying the West Coast.  The project is expected to be completed as early as 2025.
In 2021, a $2.8 billion wind farm project called Vineyard Wind received U.S. federal approval.  The 84-turbine project will lie 12 miles off the coast of Nantucket and have a capacity of up to 800 megawatts.  Completion is expected in 2023.

SPOTLIGHT:  NextEra Energy, Inc.
NextEra Energy, Inc. is one of the largest electric power companies in North America and a leader in the renewable energy industry.  The firm has approximately 55,700 megawatts (MW) of generating capacity, with electric generation capacity across 38 states in the U.S., four provinces in Canada and in Spain.  NextEra provides retail and wholesale electric services to more than 10 million customers.  It owns generation, transmission and distribution facilities to support its services.  The company also has investments in gas infrastructure assets.  NextEra’s business strategy emphasizes the development, acquisition and operation of renewable, nuclear and natural gas-fired generation facilities in response to long-term federal policy trends supportive of zero and low air emission sources of power.  Nearly 100% of the company’s generation comes from renewable, nuclear and natural gas-fired facilities.  The firm conducts its operations principally through two wholly owned subsidiaries: Florida Power & Light Company (FPL) and NextEra Energy Resources, LLC (NEER).  In addition, subsidiary NextEra Energy Capital Holdings, Inc. owns and provides funding for NEER and all NextEra subsidiaries other than FPL.  FPL is the largest electric utility in the state of Florida and one of the largest electric utilities in the U.S.  NEER is the world's largest operator of wind and solar projects.  Additionally, NextEra also operates the recently acquired Gulf Power Company.  In March 2021, the firm completed its acquisition of GridLiance Holdco, LP and GridLiance GP, LLC from Blackstone for approximately $660 million.

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