U.S. Renewable Energy Growth Accelerates

Renewable energy markets surged in the United States in the first half of this year despite uncertainty over federal tax credits and a sluggish national economy, according to mid-year figures.

Wind, solar, and geothermal energy are all on the rise. At least 17,000 megawatts (MW) of these three energy sources are now under construction. According to the Energy Information Administration, renewable energy will account for about one-third of new electricity generation added to the U.S. grid over the next three years.

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Wind energy is leading the way with 19,500 MW of installed capacity at mid-year, including more than 1,000 MW added in the last six months. The American Wind Energy Association (AWEA) second-quarter report [PDF] predicts that total additions for the year will come to 7,500 MW, boosting U.S. wind capacity by 45 percent. In Texas alone, more than 4,200 MW of wind capacity has been installed this year or is currently under construction. Iowa is in second place with 1,770 MW.

Geothermal energy is expanding as well, although at a slower rate. Nearly 3,000 MW is currently on-line and about 4,000 MW is under development, the U.S. Geothermal Energy Association said in its August report [PDF]. Nevada is the hotbed for U.S. geothermal, with as much as 1,900 MW in different phases of development. At a government auction last week, a record $28.2 million of leases was sold for geothermal energy exploration, which suggests that additional projects may soon begin.

While U.S. solar energy data for 2008 are not yet available, last year's Solar Energy Industries Association report [PDF] said demand for photovoltaic (PV) panels, concentrated solar plants, and solar water heaters continues to expand. An additional 150 MW of PV panels were installed last year, 45 percent more than in 2006. Less than 500 MW of concentrated solar power - utility-scale solar plants that use mirrors to produce heat for power generation - is operational, but another 4,000 MW is in the works.

The accelerated growth of renewable energy projects is a response to the powerful combination of high energy prices and growing state government support. In addition, fears that Congress will not renew the federal tax credits before they expire at the end of this year have led developers to rush to connect their projects to the grid by December 31. The tax credits are crucial for renewables industries to remain competitive with the fossil fuel industries that receive regular government support.

"The pipeline of investment for 2009 has been on hold for months, with escalating risks and costs for the industry," said Randall Swisher, executive director of AWEA, in a prepared statement. Both major political parties support extension of the tax credits, but debate over how to make up for the estimated $8.2 billion loss in tax revenues has resulted in a stalemate between the parties.

Swisher's organization said this year's surge in installed wind capacity will likely enable the United States to surpass Germany as the world leader in wind power by the end of the year. Germany has installed more than 22,000 MW of wind power, almost 24 percent of the world total.

In the meantime, China has laid claim to the world's fastest growing wind industry and is on track to surpass the U.S. in the next few years. China currently has 10,000 MW of wind capacity installed, and this is expected to double by 2010.

But the U.S. wind industry may soon experience a gale-force boost. Last month, Texas oilman T. Boone Pickens announced a plan to install hundred of thousands of megawatts of wind turbines in the wind corridor that runs from Texas to North Dakota. His plan would provide at least 20 percent of the country's power - enough to keep U.S. wind turbine factories in operation for decades to come.

The United States already leads the world in geothermal energy. It ranks fourth in solar energy, behind Germany, Japan, and Spain.