Navigant Research Blog

US Wind Market Installs 8.2 GW in 2016

Jesse Broehl — February 22, 2017

The United States had a strong year for wind energy capacity installation, with 6,478 MW commissioned in 4Q 2016. This capped off a total of 8,203 MW total for the year, according to the 4Q 2016 market data recently released by the American Wind Energy Association.

In 2Q 2016, Navigant Research forecast that final 2016 capacity additions were likely to be 8,200 MW, representing its most accurate annual capacity forecast to date. Navigant Research forecasts that there will be 45 GW of total new wind installations between 2017 and 2023, assuming there are no changes to the existing Production Tax Credit (PTC) phaseout timeline.

Key Takeaways of 2016

Total cumulative wind energy capacity installed in the United States now stands at 82,183 MW, with more than 52,000 wind turbines operating in 40 states. Nineteen states commissioned a total of 47 projects during the fourth quarter. Texas led with 1,790 MW, followed by Oklahoma (1,192 MW), Kansas (615 MW), North Dakota (603 MW), and Iowa (551 MW).

Texas continues to lead the nation with 20,321 MW of installed capacity, the first state to pass 20,000 MW. This success is thanks to a combination of energy demand, strong wind resources, a relatively easy development environment, and Texas’s proactive and massive expansion of transmission capacity. In 2016, Oklahoma surpassed California to become the third-ranked state in the nation with over 6,600 MW of installed capacity, and Kansas surpassed Illinois as the fifth-ranked state with more than 4,400 MW.

The United States also commissioned its first offshore wind project during the fourth quarter, the 30 MW Block Island wind project off the coast of Rhode Island. Among other offshore developments was an auction conducted just before the end of the year and won by Norway’s oil giant Statoil with its offer to pay the US Department of the Interior $42.5 million to lease an area of ocean off Long Island, New York. The space could be used to support more than 1 GW of offshore wind, providing validation of offshore wind’s future in the United States.

Market Developments

There are now 10,432 MW under construction and 7,913 MW in advanced development in the US wind market, a combined total of 18,344 MW of wind capacity. The industry also qualified significant additional project capacity for the full value of the PTC at year-end through safe harbor and physical construction without finalizing project capacities. This means substantial wind project capacity has until the end of 2020 to be commissioned.

Out of the 8,203 MW installed in 2016, Vestas (43%) and GE Renewable Energy (42%) led in market share, followed by Siemens (10%), Gamesa (4%), and Nordex USA (1%). Goldwind, Vensys, and Vergnet each composed less than 1% share. This is the first time in history that Denmark-based Vestas surpassed US-based General Electric in a given installation year. One likely reason is Vestas’ major commitment to siting its supply chain in centrally located Colorado, providing potential cost reductions relative to General Electric (which assembles its nacelles in Pensacola, Florida, requiring further transport to the major centrally located state markets).

Project developers signed 816 MW of power purchase agreements (PPAs) during 4Q 2016, contributing to a total of 4,040 MW of PPAs signed during 2016. Utilities and rural electric cooperatives represent 56% of total project capacity contracted (2,266 MW) during 2016. For the year, non-utility purchasers had 39% of the remaining capacity contracted (1,574 MW). Of the 8,203 MW commissioned during 2016, 67% of that capacity has a PPA or Public Utility Regulatory Policies Act contract in place. The remaining capacity is under utility or direct ownership (12%), has a merchant hedge contract in place (12%), or is fully merchant (9%).

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