US: US wind turbine demand surge from increasing offtake from utilities, commercial & industrial power purchasers as key policies are set to expire

In a new Flash Note published yesterday by leading wind industry research firm MAKE, analysis is presented in support of a 3.7GW increase to MAKE’s US wind power outlook from 2015 to 2017. The upgrade underscores a 3% rise in the global wind power forecast from 2015 to 2017, issued in MAKE’s Q4/2015 Global Wind Power Market Outlook Update, also published today, 12 November.

Utilities are moving aggressively to lock in low power prices from PTC-eligible wind projects ahead of the Clean Power Plan.

At the same time, commercial and industrial (C&I) firms, such as Amazon, Procter and Gamble, and Hewlett Packard, are following Fortune 500 pioneers to secure direct long-term offtake agreements for wind power. Based on analysis of MAKE’s project pipeline data, demand in 2015 is approaching levels that match MAKE’s bull case assumptions from Q1, resulting in an upgrade of the base wind power outlook.

MAKE’s Flash Note includes analysis of recent climate change commitments from Fortune 500 corporations in the C&I segment. Firms with targets to increase their procurement of renewable energy and reduce greenhouse gas emissions will drive significant demand for new wind power capacity, as well as solar PV power, through 2020.

The state of federal politics in Washington DC has evolved substantially in terms of a PTC extension. A surprise exit of former Speaker of the House John Boehner leaves new Speaker Paul Ryan leading a divided House Republican caucus through difficult negotiations over federal budget appropriations.

MAKE expects substantial upside for wind power in the near term if Congress approves either a one-year or a two-year PTC extension. Each option is feasible but not included in the base outlook, and the Flash Note illustrates the impacts of each scenario.