Roosevelt Institute | Cornell University

An Outlook of Wind Energy in the United States

By Justin ChengPublished November 6, 2014

On the surface, wind energy in the United States seems to be doing well. However, this assumption is not necessarily true as the American wind energy market still faces serious challenges.

By Justin Cheng, 11/6/14

Currently, wind power has the capacity to supply more than 61,327 MW of electricity in the United States. In the first quarter of 2014, it produced 176.8 terawatt-hours, which was 4.31% of total electricity generation. The wind industry's growth has been staggering, having experienced a thirty-fold increase from producing a total of 5593 MW in 2000. Through many green energy initiatives, wind power's future seems especially promising.

Despite these recent gains, wind power still hasn't reached its full potential in the American energy market. There are a number of obstacles that wind energy firms must deal with in order for wind power to thrive.

The greatest challenge that wind power faces is the uncertainty of future funding. Currently, many wind farms rely heavily on the wind energy Production Tax Credit (PTC) and the Investment Tax Credit (ITC) from the federal government to support their production. Federal and state incentives are essential for sustaining continual wind power growth. They have significantly lowered wind electricity production costs and have allowed wind producers to expand their operations and create hundreds of thousands of jobs. However, there is a serious lack of certainty surrounding these incentives that has hampered stable wind energy production.  Similarly, the ITC expired in 2012 and was only restored this year, creating policy uncertainty that has left producers unsure whether their businesses will still be viable by the end of the year. The inconsistency of ITC/PTC renewal has created an unnatural boom-bust cycle as the viability of the wind energy market depends so heavily on the outcome of the green energy debate in Washington. There must be a more serious and sustained commitment to wind power to strengthen the industry and to empower wind energy producers against heavily subsidized foreign firms. These incentives will provide the groundwork for wind power to be increasingly cost-competitive with other energy sources and eventually wean itself from government support.

Also, we need to make wind energy seem more attractive than environmentally harmful sources of energy. This is difficult given the surging popularity of fracking, the projected decline in the price of crude oil to $80 a barrel by 2015, and the stagnant recovery of the economy. As long as conventional fossil fuels are cheaper than green energy sources, there is no incentive to switch to wind energy. Policymakers can increase petroleum taxes, place tighter restrictions on oil and gas extraction, and reduce fossil fuel subsidies, but these options are politically unfeasible in the current climate. Rather, policymakers should encourage the adoption of wind power by highlighting its environmental benefits that have long-term, positive economic implications. Additionally, increasing investments in better national power grid efficiency and improving clean energy transmission infrastructure is promising.

Finally, there are issues with efficiently generating and wind power. Wind farms typically produce the most power during the daytime, when demand is relatively low and suffer from intermittent energy production when the wind stops blowing. Effective battery storage technology can overcome these problems, but current lithium and lead batteries cannot handle the magnitude of charges required to power the grid. More robust battery technology is being developed, but still requires extensive testing and funding commitments. Similarly, the current cobbled-together energy grid makes it difficult to transmit wind energy from rural plants to urban areas where it's most needed, typically from rural plants to urban centers. Wind energy transmission is currently ineffective as electricity usually loses its charge as it is forced to travel long distances and almost all plants are located very far away from energy consuming urban centers.

Despite the progress surrounding American wind energy in the United States, it still has a long way to go before it is truly cost-competitive with other energy options. Strong political will is essential to enacting policies that encourage the growth of wind power and a clean energy future.