Analyst: Even With Wind Energy PTC Extended, Outlook For 2013 Is Lackluster
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| Even with the wind energy production tax credit (PTC) extended, only 3 GW to 4 GW of new wind power is likely to enter commercial operation by the end of 2013, compared to the approximately 12 GW that came online in 2012, analysts at research firm Industrial Info Resources predict. In fact, between 8 GW and 8.8 GW of new wind energy generation could reach the construction stage this year, with construction and operations extending into 2014, says Shane Mullins, the firm's vice president of product development for the power industry. "An extended PTC puts the onus on wind power developers to quickly revisit and reactivate the project pipeline, which has been on hold for a while as companies focused on completing projects by year-end 2012," Mullins says. "Projects that could not be completed by year-end 2012 were placed on hold. Now, those projects need to be revived and reviewed for viability." According to Mullins, there are many factors that will likely prevent a repeat of last year's record level of wind project development. For one, he says, many utilities are ahead of the curve on meeting their state renewable portfolio standards. In addition, many bankable projects that were being developed for a 2013 kickoff were moved into 2012 in order to take advantage of the PTC. Another challenge is that due to policy uncertainty, many developers and equipment manufacturers slashed staff and placed projects on hold. "Developers and manufacturers need time to gear up, so the new PTC extension will be largely felt in the second half of 2013 and will not repeat what happened in 2012, when new development dropped sharply in favor of finishing projects that could operate commercially by Dec. 31, 2012,” Mullins explains. |
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