A Report on Wind Energy in the United States and Canada

Executive Summary

The wind energy market in the US and Canada is growing due to strong governmental and consumer support. Governmental support includes the incentive systems such as the Production Tax Credit (PTC) in the US and Wind Power Production Incentive in Canada. The PTC particularly affects the growth of wind energy market in the US as it plays a major role in capacity expansion decisions of turbine manufacturers. In addition, regulations such as Renewable Portfolio Standards and Advanced Energy Initiative in the US, and Feed in Tariff system in Canada aids in increasing wind power generation.

To increase consumers'contribution in wind power generation and consumption, the US government had introduced the Net Metering System. Moreover, consumer awareness regarding the environmental impact of conventional energy has also resulted in an increased demand for wind energy. In Eastern Colorado and upstate New York ranch owners and dairy farm owners are offering their land to wind power generating companies for installation of wind turbines, as wind turbines occupy minimum space and do not interfere with farming activities. This also generates extra revenues for the land owners.

One of the major reasons for development of wind energy is to decrease dependence on fossil fuel for power generation. Dependence on fossil fuel imports such as oil for power generation may distort stability in power generation. This has been emphasized by the US president through the Advanced Energy Initiative. Development of renewable energy sources such as wind energy can make the energy infrastructure more secure and reliable. Rising cost of fossil fuel based power and decreasing natural gas supply has increased the demand for wind energy. Wind energy offers a stable price structure when compared to the price of fossil fuel based power.

Wind power can be generated in both onshore and offshore locations. In the US, offshore wind farms are being developed in addition to onshore wind farms as flow of wind over the sea is greater when compared to land. Offshore wind farms act as supplementary to onshore wind farms. Currently, offshore wind farms are being installed in shallow waters that have a depth of 20 meters. Technological innovations can result in installation of offshore wind farms even in deep waters. This will result in complete utilization of offshore wind power potential. Offshore installation of wind farms can also help in eliminating visual distortion and noise pollution caused by onshore wind farms.

On the power supply side wind energy market in US and Canada is facing certain issues such as high cost of wind turbines due to inadequate supply. The power distribution system is totally centralized as per the requirements of the conventional energy supply, while the wind power generation system is decentralized in nature. This requires a revamp of the power distribution system. Wind power generation depends on the flow of wind in a particular region, hence the power supplied by a wind farm may fluctuate in a given period of time. This creates the need for a standby power generation system to ensure consistency in power supply.

The US has an impressive wind power generation potential of 10,777 terawatt hours, but only 0.25% of this potential is actually utilized. Hence, the US has plans to increase wind power generation installed capacity by 6000 megawatts between 2006 and 2009. Multinational green power generating companies such as the UK based British Petroleum and the Netherlands based Shell Renewables are planning to enter the market, while AES Corporation, an international power plant developing company had established its operations in the US during 2004. This will result in increasing wind power generation capacity. FPL Energy, LLC a major wind energy manufacturer at the global level is located in the US. Atlanta based GE Energy ranks among the top five wind turbine manufacturers at the global level. Canada does not feature any large scale integrated facility for wind turbine production.

In North America excluding Mexico, the US dominated in terms of wind power installed capacity for the period 2003 – 2005, while Canada had only a small share. However, Canada has a higher year-on-year growth when compared to the US. Globally, the US occupied the third position behind Germany and Spain in terms of installed capacity for wind power generation during 2005, while Canada occupied the 14th rank.

Keywords

Wind Energy Industry, Regulatory Environment, Renewable Portfolio Standards (RPS), Production Tax Credit, Greenhouse Gas Emission, Fossil Fuel Consumption, Wind Power Production Incentives (WPPI), Feed-in Tariff, Onshore and Offshore Wind Turbines, Net Metering Systems, Advanced Energy Initiative, Research and Development, American Wind Energy Association, Alternative Green Power Source, United States of America, Canada, North America, Green Power Energy

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