New US wind power capacity plummeted in Q4 2022, fell 56% annually

US wind energy developers installed less than half of the power generation capacity in 2022 than they did the prior year, according to an analysis of S&P Global Market Intelligence data.

Additions during the year totaled 6,707 MW, a 56% drop from the 14,524 MW installed in 2021. For the fourth quarter of 2022, developers connected 1,084 MW to US grids, roughly a fifth of the 5,251 MW installed in 2021.

The quarterly and yearly declines in wind energy installations parallel declines in solar resource installations in the US in 2022.

The lack of activity was largely the result of the declining production tax credit, which until the enactment of the Inflation Reduction Act (IRA) in August 2022 phased down to 60% of its original value for projects that began construction in 2021 and completely phased out for projects that began construction in 2022. The IRA restored the value of the production tax credit to 100% for projects brought online in 2022 and beyond, which should boost pipelines in the years ahead.

So far, developers have already identified a five-year project pipeline of 77,220 MW. The industry would have to install an average of 15,444 MW annually to meet the figure.

According to Market Intelligence data, roughly 10% of the future pipeline, or 8,071 MW, is under construction, and nearly 20%, or 15,193 MW, is in advanced development. Almost half, 36,663 MW, is in early development, and roughly 22% of the projects are considered in the announced stage.

Market Intelligence considers a project as under construction when building activity has begun; site preparation does not qualify. Projects in advanced development must meet two of five criteria: Financing is in place; power purchase agreements are signed; equipment is secured; required permits are approved; or a contractor has signed on to the project. A project is in early development after permitting begins. An announced project must have a listing in an interconnection queue with an accompanying public announcement or permitting action.

One new project was announced in the fourth quarter of 2022. NextEra Energy Inc. said it will add another 100 MW to its 200-MW Ponderosa Wind Farm in Beaver County, Okla.

The wind farm was part of a 2020 sale by NextEra Energy Resources LLC of parts of a 1,000-MW renewable energy portfolio to NextEra Energy Partners, a yieldco managed by NextEra Energy Inc.

NextEra Energy Partners owns a 40% share of the existing wind farm, while NextEra Energy Resources LLC has a 10% stake. Four other owners hold a 12.5% share each. Most of the output is secured under contract with a Midwest utility.

NextEra Energy also completed the largest wind farm of the fourth quarter of 2022, the 444-MW Clearwater Energy Resources wind farm in Rosebud County, Mont.

Puget Holdings LLC subsidiary Puget Sound Energy Inc. holds a 20-year power purchase agreement for 350 MW. The project could expand to up to 750 MW. More than 300 MW of additional capacity is scheduled to come online in December. Portland General Electric Co. has invested roughly $415 million in the Clearwater expansion and will own 208 MW, with NextEra owning the remainder.

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