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Coming off strong 2019, wind power industry 'well-equipped' to take on pandemic

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Coming off strong 2019, wind power industry 'well-equipped' to take on pandemic

The American Wind Energy Association on April 16 outlined findings from its annual market report for 2019, which marked the third-strongest year on record as wind power capacity in the U.S. surpassed 105 GW. That capped a decade in which installations in the U.S. tripled, 530 manufacturing facilities hired 26,000 workers and a new offshore industry emerged with the potential to bring at least 25 GW of carbon-free power to East Coast states.

Wind power has surpassed hydropower to become the nation's number-one supplier of renewable energy, constituting 7.2% of all generation in 2019, and "continues to be the top choice for new utility scale power," John Hensley, AWEA's vice president for research and analytics, told reporters.

At the same time, the COVID-19 pandemic has put at risk up to 25 GW worth of planned projects, AWEA said. And the renewable energy industry is shedding thousands of jobs. The industry is "well-equipped" to meet the challenges brought on by the pandemic, Hensley said, but renewable energy is not immune to the drastic toll it has taken on the global economy.

The industry relies on a global supply chain that has been disrupted by coronavirus shutdowns. China, which is slowly reopening, supplies U.S. manufacturers with generators and gearboxes. In many places "components are finished or they're sitting in ports, and once they get to ports there are delays in offloading the equipment and getting it on a truck," Hensley said.

Even if they have the necessary equipment, project developers are at times unable to speak in person with private landowners, imperiling siting for new projects. States announced 16 GW of new targets for offshore wind in 2019, the report said. But delays for offshore projects could be "potentially long-lasting" because many of them rely on marine surveys that are season-specific, Hensley added.

And banks that provide tax equity financing to wind projects are struggling.

"We're seeing large drops of earnings across many of these banks, which constrains their ability to provide tax-equity financing on these projects," he said. "We've heard of a number of middle sized players in the tax equity market that have either left the market entirely or at least put on hold investments for the time being before they get a fuller picture of what their economic position is."

AWEA officials have asked Congress for an extension of a safe harbor rule that allows projects that began construction in 2016 and 2017 to capture the production tax credit that has helped drive the industry's growth. AWEA is also lobbying for direct payments from the government to developers in lieu of tax credits.

Nevertheless, wind power was the top choice for new utility-scale power generation in 2019, capturing 39% of new additions, according to the report. The power sector's transition to carbon-free generation will continue, and many utilities have filed long-term resource plans that feature ambitious renewable energy additions.

"Many of these utilities have made concerted efforts to make the transition to a cleaner generation mix, and given the economics of where wind is at the moment, I would expect that to continue," Hensley said.