Why is 2016 the Year of the Wind?

Guest Blog | May 5, 2016 | Energy Policy, Wind
2016 is the year of the Red Monkey, but what does this have to do with wind energy? Read on...

This blog is part of the Southern Wind Energy Association’s Windy Wednesday series leading up to the wind energy industry’s largest annual event, WINDPOWER 2016, being hosted in New Orleans May 23-26. Registration and details available here. You can read the other blogs in this series by clicking on #WindyWednesday.

According to the Chinese animal zodiac cycle, 2016 is the year of the Red Monkey. According to legend, the Monkey contains Metal (relation to gold) and Water (wisdom, danger)…Metal is related to Wind (change). Therefore events in 2016 will change very quickly.

The Year of the Red Monkey couldn’t be more fitting for the opportunity wind energy will play this year. 2016 is the year to act on wind power in a big way, but the clock is ticking. At the end of 2015, Congress passed a long-term extension of the federal Production Tax Credit (PTC). Starting next year, this key federal incentive will reduce in value by 20%, and over the next three year, phase out completely. That’s why utilities like MidAmerican, which serves power in the midwest, have asked the Iowa Utility Board to approve its request by mid-September to secure 2,000 megawatts of wind energy so that it can take full advantage of the extended PTC before the reduction begins. MidAmerican plans to receive 85% of its electricity from wind energy. 

Many utilities across the south also recognize the opportunity to secure wind power as a part of their portfolio. In fact, 3,000 megawatts of wind energy power purchase agreements are already in place with utilities in the south and many of these companies are planning to secure more renewables like wind energy.

Here is a preview of some of the upcoming request for proposals (RFPs) for renewable energy projects in our region:

If you’re keeping count, these utilities could seek around 3,000-5,000 MW of new renewable energy capacity – just in the south. Keep in mind that RFPs are not the only way utilities purchase renewable energy projects, but they often provide the best way to gather the lowest-cost options for utility ratepayers.

We applaud these utilities for taking action on wind power, but some of the timelines for selecting and securing these power purchase agreements are beyond 2016. Utilities in the south that remain on the sideline this year aren’t just missing out on a great opportunity for their ratepayers, they risk losing billions of dollars in wind energy savings as the PTC phase out begins in 2017.

It’s clear that 2016 is the Year of the Wind. These winds of change are blowing quickly, so the time is now for the south to get on board before it’s too late.

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