U.S. Wind Power Blows New Records. Again. And Again.by
Wind was responsible for 4.8 percent of America’s electricity used in January. That’s the highest January total ever, breaking the record from last January, which broke the record for the January before that, and so on. The chart below shows the latest data from the U.S. Energy Information Association.
America’s rising wind power feels unstoppable. That’s because in many areas of the country wind has reached an important tipping point: becoming cheaper than coal and natural gas. In fact, states getting the most electricity from wind include gas-rich Texas, Oklahoma and Colorado.
Onshore wind power has come of age, and not just in the U.S. This next chart shows the levelized cost of energy worldwide, using data from Bloomberg New Energy Finance (BNEF). Average onshore wind power now costs the same as gas worldwide, at about $84 per megawatt hour. That’s without subsidies.
In the U.S., competition between wind and gas is fierce. New techniques known as fracking (or hydraulic fracturing for the timid) have overhauled the U.S. energy economy and brought America some of the cheapest natural gas prices in the world. In order to compete, U.S. wind relied on a tax credit, which expired at the end of last year.
Don’t miss the BNEF Future of Energy Summit , April 7-9 in NYC.
Even without the subsidy, wind prices are getting cheaper as the technology improves. The cost of wind energy has declined by 43 percent over the last four years. There’s a backlog of projects that already qualified for the tax credit that will ensure a steady pace of turbine growth for the next few years, according to BNEF wind analyst Amy Grace.
The future of the wind tax credit is contentious and uncertain, but so is America’s cheap gas prices. As expensive coal plants are retired, utilities are switching to cheaper natural gas, driving up the price, says Grace. Also, the U.S. Energy Department is opening up domestic gas for exports for the first time. By 2020, U.S. shale gas may account for 20 percent of the global market, according to a Citigroup estimate.
If Americans have to buy gas anywhere near international market prices, wind wins. Gas may be booming, but you can expect many more wind records to come.
More from Tom Randall:
- The Future of Energy: Live Coverage of the BNEF 2014 Summit
- All Your M&Ms Will Be Green by 2040: The Mars Mission
- How to Keep Your Job When Your Boss Is a Robot
- Wind Power Is Boring; This Isn't
- Renewable Energy at $254 Billion? Let’s Make It a Clean Trillion
Follow @tsrandall on Twitter for more on the Future of Energy.