Consumer demand drives record year for wind energy purchases

Fortune 500 brands and a range of other non-utility entities, including cities and universities, are catalyzing America’s growing demand for renewable energy by purchasing a record amount of wind power in 2018 according to a new report released today by the American Wind Energy Association (AWEA). Consumer demand combined with policy stability and low, stable prices helped wind power capacity installations rise to the third strongest quarter in the industry’s history.

AWEA’s U.S. Wind Industry Fourth Quarter 2018 Market Report reveals that non-utility customers like AT&T, Walmart, ExxonMobil, and Shell Energy purchased a record 4,203 megawatts (MW) of wind power capacity in 2018 through long-term contracts, or Power Purchase Agreements (PPA). Contracted wind capacity from non-utility customers in 2018 surged 66 percent higher than the previous high-water mark in 2015. Data from the Business Renewables Center confirms that wind provides more energy to corporate brands than any other renewable source.

“A rapidly growing number of big brands and utilities clearly understand that for American consumers, it’s no longer enough for energy to be affordable and reliable, it must also be clean,” said Tom Kiernan, CEO of AWEA. “Businesses are responding to their customers by seeking out the lowest-cost clean energy they can find to power their products and operations reliably. Wind power’s record-setting 2018 proves you really can have it all.”

Polls find strong public support for more wind power among Americans on a non-partisan basis. For consumer-facing brands like Budweiser, wind power has become both a major energy source and selling point. In fact, Budweiser is putting wind power right at the center of their Super Bowl 2019 strategy with a commercial titled “Wind Never Felt Better,” featuring Clydesdales and a dalmatian alongside wind turbines – set to the soundtrack of Bob Dylan’s “Blowin’ in the Wind.” With the ad and a new label, Budweiser wants customers to know every bottle of their beer is now brewed with 100 percent wind energy supplied by Enel Green Power’s Thunder Ranch wind farm in Oklahoma. This also further showcases Anheuser-Busch’s ambitious 2025 Sustainability Goals, which guide the brewer’s industry-leading sustainability efforts in the U.S.

“As a leading brewer, Anheuser-Busch understands sustainability is not just related to our business, it is our business,” said Angie Slaughter, Vice President of Sustainability at Anheuser-Busch. “We are proud that Budweiser is the first major beer brand to be brewed with 100% renewable electricity from wind power; we hope our efforts inspire others in our pursuit for a more sustainable future.”

Wind power also continues to be a popular choice for major utilities who must balance ratepayer expectations for affordable, reliable and clean energy. Utilities signed contracts for 4,304 MW of wind power in 2018 that, when combined with non-utility purchases, reached the highest level on record for overall PPA activity with 8,507 MW in 2018.

Strong consumer demand and stable policy also helped the industry surge to its third strongest quarter on record for new wind power capacity additions. New wind farms totaling 5,944 MW were installed nationally in the fourth quarter of 2018, enough to power all the homes in Colorado or Massachusetts.

New wind farm installations in the fourth quarter were concentrated in the “American Wind Belt” from Texas on up through North Dakota. Notably, Iowa reclaimed second place for total installed wind capacity from Oklahoma, which had snagged the spot in 2017. Texas continues to hold a wide lead in first place. South Dakota joined the Gigawatt Club of states with more than 1,000 MW of installed wind capacity, making it the 19^th state to do so.

In total, the industry commissioned 7,588 MW of wind power capacity in 2018. There are now 96,488 MW of cumulative installed wind capacity in the United States, with more than 56,800 wind turbines operating across 41 states.

Low, stable prices are a large piece of wind power’s value to buyers. The cost of wind has fallen by 69 percent since 2009, falling 7 percent in 2018 alone, according to investment firm Lazard. Thanks to a robust U.S. supply chain, including over 500 factories, and advances in technology, wind power is now America’s most-cost competitive source of electricity on average. Because wind power uses no fuel to produce electricity, customers can lock in long-term contracts, often for 10-20 years, at a low price that hedges against fossil fuel price volatility.

“Wind power is on strong footing with trend lines–rising consumer demand, falling costs, improving technology–all pointing in the right direction,” added AWEA CEO Tom Kiernan. “Our industry is driven to deliver the most competitive product possible and we’re confidently moving forward to further cut costs and advocate for improvements that bring markets and power grid infrastructure into the 21^st Century.”

With a robust pipeline of new wind farms currently under construction or in advanced development, wind power’s strong 2018 is continuing this year. Projects totaling 2,125 MW started construction and a further 3,661 MW entered the advanced development phase in the quarter. There are now 35,095 MW of wind power capacity either under construction, 16,521 MW, or in advanced development, 18,574 MW, a 22 percent year-over-year increase in the development pipeline.

"Wind will continue to play an important part of supporting the execution of our growth strategy in the U.S., a country which has been and will continue to be in the coming years a key pillar for the growth of Enel Green Power globally,” said Georgios Papadimitriou, President and CEO of Enel Green Power North America. “Our growth is driven by customer demand, as increasingly more businesses recognize that wind power is a sustainable and competitive choice to meet their energy needs.”

As with land-based wind farms, momentum is accelerating for the U.S. offshore wind market. Major energy businesses like Equinor, Orsted and Shell are locked in fierce competition to be the first to harness American offshore wind at scale. Strong support from the Trump Administration and coastal states, including New York’s nation-leading 9 GW offshore wind target, has sparked investor confidence and sets the stage for a great offshore energy boom. In December 2018, winning bids for three Massachusetts lease areas generated a combined $405 million in federal revenue, smashing the previous record bid of $43 million for a New York lease area.